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    DEPARTMENT OF INDUSTRIAL RELATIONS

    Industrial Relations/HRM 659/2010

    1

    1.0 INTRODUCTION

    Industrial relations have its roots in the industrial revolution which created the modern

    employment relationship by spawning free labor markets and large-scale industrial organizations

    with thousands of wage workers.

    As society wrestled with these massive economic and social

    changes, labor problems arose. Low wages, long working hours, monotonous and dangerous

    work, and abusive supervisory practices led to high employee turnover, violent strikes, and the

    threat of social instability.

    Industrial relation is a strange terms because the subject matter of this area has nothing to

    do with the relationship between one industries to another; it is about the relationship between

    employees and their employers. Industrial relation stresses the importance of three major areas.

    Firstly, is the relationship between employers and trade unions. Secondly, is the framework

    provided by the employment laws. Lastly is disciplinary procedure and termination of the

    employment contract.

    The Industrial Relations Act 1967 regulates the relations between employers and

    workmen and their trade unions, and provides for the prevention or the settlement of differences

    or disputes arising between them. This Act enshrines the principles underlying Malaysian

    industrial relations, namely trade Unionism the principle that workmen, Union Recognition,

    Collective Bargaining and Dispute Resolution

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    2.0 DEFINITION OF INDUSTRIAL RELATIONS

    Industrial relations are a multidisciplinary field that studies the employment relationship.

    Industrial relations are increasingly being called employment relations because of the importance

    of non-industrial employment relationships. Many outsiders also equate industrial relations to

    labor relations and believe that industrial relations only studies unionized employment situations,

    but this is an oversimplification.

    Industrial relation is also known as employee, labor, or employment relations. The right

    and obligation of employer and employee differ depending upon where the worker belongs to a

    trade union or not. Where none of the workers in a particular workplace have joined a trade

    union or not, the relationship between the employees and the employers is generally an

    individual demand, compared to the collectivist relationship which exists once workers join a

    trade union.

    Industrial relations (also called labor relations) looks at the relationship between

    management and workers, particularly groups of workers represented by a union. Industrial

    relations scholars have described three major theoretical perspectives or frameworks. The three

    views which are:

    1. Unitarist perspectiveIn Unitarianism, the organization is perceived as an integrated and harmonious whole

    with the ideal of "one happy family", where management and other members of the

    staff all share a common purpose, emphasizing mutual cooperation. Furthermore,

    unitarism has a paternalistic approach where it demands loyalty of all employees,

    being predominantly managerial in its emphasis and application.

    Consequently, trade unions are deemed as unnecessary since the loyalty between

    employees and organizations are considered mutually exclusive, where there can't be

    two sides of industry. Conflict is perceived as disruptive and the pathological result of

    agitators, interpersonal friction and communication breakdown.

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    2. Pluralist perspective

    In pluralism the organization is perceived as being made up of powerful and divergent

    sub-groups, each with its own legitimate loyalties and with their own set of objectives

    and leaders. In particular, the two predominant sub-groups in the pluralistic

    perspective are the management and trade unions.

    Consequently, the role of management would lean less towards enforcing and

    controlling and more toward persuasion and co-ordination. Trade unions are deemed

    as legitimate representatives of employees, conflict is dealt by collective bargaining

    and is viewed not necessarily as a bad thing and, if managed, could in fact be

    channeled towards evolution and positive change.

    3. Radical perspective

    This view of industrial relations looks at the nature of the capitalist society, where

    there is a fundamental division of interest between capital and labor, and sees

    workplace relations against this history. This perspective sees inequalities of power

    and economic wealth as having their roots in the nature of the capitalist economic

    system.

    Conflict is therefore seen as inevitable and trade unions are a natural response of

    workers to their exploitation by capital. Whilst there may be periods of acquiescence,

    the Marxist view would be that institutions of joint regulation would enhance rather

    than limit management's position as they presume the continuation of capitalism rather

    than challenge it.

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    3.0 DEPARTMENT OF INDUSTRIAL RELATIONS (DIR)

    3.1 PROFILE

    The Department of Industrial Relations Malaysia was established on the 21'st December

    1972. Prior to that it was a division of the Department of Labour and Industrial Relations. The

    Department of Industrial Relations has since remained as one of the many organizations under

    the Ministry of Human Resources.

    The Department is under the charge of the Director General of Industrial Relations,

    Malaysia who is responsible to the Minister of Human Resources through the Secretary General

    of the Ministry for all the functions and duties of the Department.

    At the headquarters in Putrajaya, the Director General is assisted a Deputy Director

    General and by six Directors of the various Divisions, namely Management Services, Planning

    and Policy Research, Trade Dispute, Industrial Harmony, Reinstatement and Legal.

    The Department has 13 branches located at the various state capitals (except for the state

    of Perlis) and each is headed by a State Director of Industrial Relations. In addition, two sub-

    offices in the districts of the state of Johore are headed by Assistant Directors. The Department is

    manned by about 115 officers and 107 supporting staff.

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    4.0 HISTORY OF INDUSTRIAL RELATIONS SYSTEM

    Prior to 1965, the voluntary system of industrial relations patterned along the British

    system was in practice. Under such system, the concept of self-government and autonomy within

    industry was the key to industrial harmony. The Industrial Courts Ordinance provided for the

    promotion of peaceful and voluntary settlement of trade disputes through conciliation by a third

    party or through the voluntary reference of a dispute to the Industrial Court for arbitration.

    While the Trade Disputes Ordinance provided the Government with supervisory powers to

    maintain vigilance over trade disputes and certain matters arising from such disputes so as to

    ensure and safeguard the interests of the public generally.

    In September 1965, the Essential (Trade Disputes in Essential Services) Regulations,

    1965 were promulgated. It was designed to ensure that trade disputes in certain scheduled

    services would not lead to disruption of such services. These Regulations vested in the Minister

    of Labour certain powers to intervene of his own volition in such disputes and if necessary, to

    refer them to the Industrial Arbitration Tribunal for settlement.

    Subsequent to the promulgation of the Essential (Trade Disputes in Essential Services)

    Regulations,1965 the Government conducted a review of the then existing law and practice in

    the field of industrial relations which resulted in the substitution of the previous laws by the

    Industrial Relations Act, 1967. This Act came into force on 7th August 1967 and is applicable

    throughout Malaysia. The Act retains most of the principles and practices as set out in the

    repealed legislation and continues to promote the voluntary system up to the point where

    Government intervention is necessary so that the ever present public and national interest are not

    prejudiced while the parties promote their own respective interests.

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    65.0 ORGANISATION CHART

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    6.0 VISION, MISSION, OBJECTIVE AND QUALITY POLICY

    VISION

    A harmonious, industrialized society where all disputes are resolved amicably.

    MISSION

    To create, promote and maintain harmonious industrial relations conducive for national

    development and to enhance the quality of life as a whole.

    OBJECTIVE

    To ensure the existence of a positive and harmonious relationship between employers and

    employees and between their respective trade unions aimed at creating a peaceful and cordial

    industrial relations climate in the country.

    QUALITY POLICY

    The Industrial Relations Department is committed to provide an efficient and excellent service in

    line with the stipulated quality standards in its efforts to maintain industrial harmony and

    enhance productivity vital to economic growth.

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    7.0 FUNCTIONS OF DEPARTMENT OF INDUSTRIAL RELATIONS

    1) To monitor development and trends in industrial relations in the country to assist relevant

    authorities in the formulation of the national industrial relations policies, in particular and

    national policies on labour, in general, from time to time.

    2) To coordinate relations between employers and employees organizations to foster and

    maintain tripartite relations and cooperation between the government, employers and

    employee in the area of the industrial relations.

    3) To encourage and assist in the conduct of collective bargaining and joint consultation at

    workplaces to motivate practices on the concept of self-government in industry and concept

    of self-government in industry and concept of joint consultation.

    4) To provide advisory services to employers and employees and their respective organization to

    inculcate good and healthy industrial relations practices.

    5) To provide conciliatory services to prevent and resolve trade disputes and industrial action.

    6) To conciliate in disputes arising out of dismissal from service and representation by

    employees for reinstatement into their employment.

    7) To deal with claims for recognition by trade unions.

    8) To assist workers in resolving problem pertaining to exploitation and unfair treatment by

    their employers.

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    8.0 SERVICES UNDER DEPARTMENT OF INDUSTRIAL RELATIONS

    1) Process Claims for Recognition of Trade UnionsA trade union of workman has to be recognized by the employer before it can negotiate

    for a collective agreement (collective bargaining). To obtain recognition, the trade union is to

    serve a claim for recognition upon the employer in a prescribed form (Form A - Industrial

    Relations Regulations, 1980). The employer is required to respond within 21 days, in any of the

    following manner:

    1. Accord recognition; or

    2. Decline granting recognition and inform the union the grounds for it.

    If the employer refuses to grant voluntary recognition as in (2) above, the union can lodge

    a complaint to the Director-General of Industrial Relations within 14 days from the date of

    notification or the expiry of 21 days. The duty of the department is to process the claim in

    accordance with the laws upon a complaint received from the union. This process includes

    requesting the Director-General of Trade union to ascertain the eligibility of the union to

    represent the workers concerned. The Department of Industrial Relations will conduct a

    membership check by way of secret ballot if the trade union is eligible to represent the workers

    concerned. The Minister of Human Resources will order recognition be granted when the trade

    union concerned is eligible and has a majority.

    Any parties may raise a dispute at any time whether it is before or after recognition has

    been accorded, as to whether any workman or workmen are employed in a managerial,

    executive, confidential or security capacity may be referred to the Director General.

    2) Facilitate collective bargaining

    A union which has been granted recognition can represent the employees in negotiating

    their terms and conditions of employment and salary. An invitation to collective bargaining shall

    be in writing stating the proposals for collective agreement. If the deadlocks arise then the

    department will provide conciliation services to help resolve the dispute.

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    103) Resolve trade disputes

    A Trade Dispute is defined as any dispute between an employer and his workmen which

    is connected with the employment or non-employment or the terms of employment or the

    conditions of work of any such workmen. [Section 2: Industrial Relations Act, 1967]. Under the

    Industrial Relations Act, 1967 the process of resolving trade disputes are as follows:

    y Bilateral negotiation between employer and employees.

    y Conciliation by the Industrial Relations Department.

    y Adjudication by the Industrial Court.

    The Malaysian industrial relations system emphasizes the concept of self-government in

    industry where both parties are encouraged to resolve their disputes by direct negotiation. In the

    event of a deadlock either party may report the dispute to the department upon which

    conciliation proceedings may be initiated. In fact, conciliation has been the most effective

    method of resolving disputes. The process of conciliation involves a series of meetings

    conducted either jointly or separately. Where the matter is not resolved through conciliation the

    dispute is then referred to the Honorable Minister of Human Resources who will exercise his

    discretionary powers to refer the dispute to the Industrial Court or otherwise. When a reference ismade to Industrial Court, the court will adjudicate the dispute.

    4) Process Representations for Reinstatement

    Under Section 20 of the Industrial Relations Act, 1967, a workman who considers his

    dismissal as without just cause or excuse may file a claim for reinstatement within 60 days of his

    dismissal. Upon receiving the representation by the workman, the department will invite both the

    employer and workman for a conciliation meeting. Where the claimant fails to attend any of the

    conferences without any reasonable excuses, the representation is deemed withdrawn.

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    The Conciliation Officer's role will be to explain the practices and principles of law that

    are applicable including judgment of the courts, both the Industrial Court and civil courts, so that

    the parties are aware of their rights and liabilities. With this explanation it is expected that they

    would be able to resolve their differences and come to an amicable settlement.

    If the conciliation efforts fail, the case will then be referred to the Honorable Minister of

    Human Resources who will exercise his discretionary powers to refer the matter to the Industrial

    Court or otherwise. When a reference is made to Industrial Court, the court will adjudicate the

    matter.

    5) Provide advisory services

    The department plays an active role in advising employer, employee and their respective

    unions in maintaining a good, positive and harmonious relationship between them. Parties are

    not only advised on how to form joint machinery on dispute solving, but also on the procedures

    and accepted norms of good industrial practices to be followed so as to come to a fair and quick

    conclusion to their dispute whether in good or crucial time.

    6) Promote Code of Conduct for Industrial HarmonyThe Code of Conduct exhorts management and unions to recognize the human relations

    aspect of industrial relations. It stresses that it is only with an abundance of goodwill, combined

    with constant consultation and communication between the parties involved, that we can hope to

    contain the destructive expression of industrial conflict and encourage a more equitable and

    efficient system for the benefit of those involved and the community at large.

    The Code has been agreed after numerous meetings between representatives of the

    Malaysian Trade Union Congress and the Malayan Council of Employer's Organizations held

    under the auspices of the then Ministry of Labour and Manpower. The agreed Code, endorsed

    voluntarily by both employers' and employees' organizations commend both employer and

    employees to observe and comply with its provisions:

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    y to refrain from taking unilateral action with regard to any industrial dispute;

    y to resolve all differences, grievances and disputes strictly in accordance with the

    grievance procedures of collective agreements, or, where there are no agreements, by

    negotiation, conciliation and arbitration;

    y to ensure that at all times all matters in dispute are dealt with by the proper machinery

    established for that purpose;

    y to promote constructive and positive co-operation at all levels in industry and to abide

    faithfully by the spirit of agreements mutually entered into;

    y to establish, where none exists, a procedure which will ensure a complete and speedy

    investigation of grievances leading to a joint settlement;

    y to comply with the various steps in the procedure for disposal of grievances and to avoid

    any arbitrary action which ignores there procedures;.

    y to refrain from resorting to coercion, intimidation, victimization and to avoid go-slow, sit

    down and stay-in-strikes.

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    9.0 ANALYSIS ABOUT THE KEY INDICATOR OF INDUSTRIAL DEPARTMENT

    According to the above table, it refers about the key indicator of cases under the

    industrial relations. First is a claim for recognition which is the balance from the previous

    years (2008) is 134 and the cases received until September 2009 is 53 and only 59 cases

    resolved and the unresolved case is 128.

    Second is trade disputes which is the balanced from 2008 is 101 and the cases received

    by the Department of the Industrial Relations until September2009 is 253 and only 252 have

    been resolved.

    The third subject is claims for reinstatement. At 2008 the cases balanced is 1288 and the

    cases received is 3902 and only 3453 have been resolved whereby the balanced of the

    unresolved case is 1737.

    For the pickets and strikes, there are no balances from the previous years because all the

    cases are resolved. The cases received until September 2009 is 11 cases for picket and 4

    cases for strikes. For both cases is have been resolved.

    The Department of Industrial Relations received cases for judicial reviews is 2 from the

    previous year. They received 30 cases at 2009. Only 18 have been resolved and the balance

    case is 14. Last but not least, the miscellaneous complaints cases. The cases received is 33

    and at the 2009 only 86 cases received. The resolved cases is 18 and the balanced is 34.

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    10.0ANALYSIS OF TRADE DISPUTE BY CAUSES

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    The above tables explain about the trade disputes by cases. The first causes is refusal to

    enter into collective bargaining which the highest numbers of cases is in 2007 which are 60

    cases and the lowest number of cases is in 2003 which is 26. While the highest numbers of

    workers involved is in 2003 which is 4774. In 2006 shows the lowest the workers involved

    which is 1348.

    Next causes are deadlock in collective bargaining. Mentioned that in 2003 is the highest

    numbers of cases which is 153 and the lowest is 85 in 2007. Workers involved in deadlock in

    collective bargaining shows the highest numbers. And the lowest is 4254 in 2006.

    In addition the other causes of trade disputes are disputes over term and condition of

    contractual terms in collective agreement and other service contacts. The causes show the

    highest numbers of cases is in 2003 which is 83 while the lowest number of cases is 55 in

    2007. The highest workers involved in this cause whish are 10202 in 2003 and the lowest

    workers involved are in 2007 which is 3469.

    Besides, another cause of trade disputes is retrenchment and layoff. In 2007 shows the

    highest numbers of cases which is 11 and the least number of cases is 4 in 2003. The highest

    worker involved in these cases is 595 in 2005 and153 in 2006 is the lowest workers involved.

    Furthermore, promotion, allocation of duties, transfer and other management prerogatives

    is one of the causes of trade disputes. The largest number of cases is 45 in 2005. While the

    lowest is 23 in 2004 as well as the workers involved in these cases shows the leading

    numbers of workers is in 2007 which is 2147 and 729 is least number of workers involved.

    Another cause of trade disputes is demotion, suspension, warning letter and other

    disciplinary action against workers. The highest numbers of cases and workers involved is in

    2003 which is 38 cases and 1281 workers. The lowest numbers of cases and workers

    involved is in 2007 which are12 cases and 92 workers.

    Moreover, non-compliance of labor standard and statutory provisions relating to

    amenities and facilities and other non-monetary benefits shows the highest numbers of cases

    is in 2004 which is 14 and it shares the same years of highest workers involved 1239. The

    lowest number of cases of this cause is 8 cases in 2005 and similar to workers involved

    which is 133 in the same year.

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    Then, the cause of trade disputes is infringements of workers rights/unfair labor

    practices. The highest numbers of cases and workers involved is in 2003 which are 20 cases

    and 1669 workers while the lowest number of cases is 7 in 2004. The lowest workers

    involved are in 2007 which is 257.

    Finally, the others causes mentioned that the highest number of cases are 41 in 2005 and

    the lowest number of cases is 16 in 2007. While the highest workers involved of this causes

    is in 2005 which is 3526. The least workers involved are in 2003 which is 918 workers.

    As a conclusion, the highest total number of cases including all of these causes of trade

    disputes is in 2005 which is 381and the highest workers involved including all of these

    causes of trade disputes are in 2005 which is 59008.

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    11.0 THE ANALYSIS OF TRADE DISPUTES DEALT AND METHOD OF

    SETTLEMENT

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    From the schedule above it shows the trade dispute deals by the department of industrial

    relation from 2003 until 2007. The number of the trade dispute that unresolved are higher is 2004

    which is 597 and the lowers unresolved cases that have been bought from the previous years is in

    2007 157.

    The highest numbers that have been reported to the department in industrial relations is in

    2005 which is 381 cases and the lowest case 2007 which is 302 cases.

    The trade disputes that have been dealt are decreasing from 2003 until 2007 that is

    because from year to year the grievance has been resolve before the trade dispute occurs. For

    example the working condition, wages, hours of work and more.

    The cases that completely resolves are highest in 2006 which is 676 that is because the

    issue that has been stated by the employees maybe the employer can settle the dispute. The

    lowest that complete resolves is in 2007 which is 340 that is because of the effect in the

    economic downturn, for example, if the employee request in term of the wages and salary the

    organization cannot fulfill their demand.

    In this schedule it shows three method of settlement of trade dispute which is through

    conciliation, referred to industrial court and not refer to industrial court. Through conciliation is

    the highest method of settlement between the three methods. As we know, conciliations is the

    best practices in the trade dispute settlement and there is only a few cases that are not refer to

    industrial court because almost of the cases are settle outside the court which is refer to

    conciliation state.

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    12.0 CONCLUSION

    In a nutshell, the industrial relation is about relationship between one industries to

    another; it is about the relationship between employees and their employers. In Industrial

    relations there are major theoretical perspectives or frameworks which are unitarist perspective,

    pluralistic perspective and radical perspective. In addition, in this report mention the background

    of the Department of Industrial Relations from its history, mission, vision, the function of DIR,

    and the service under the Department of Industrial Relations consist of process claims for

    recognition of trade unions, facilitate collective bargaining, resolve trade dispute, process

    representations for reinstatement, provide advisory services and promote code of conduct for

    industrial harmony.

    Good industrial relations will only exist if there is workplace co-operation. In this

    situation, managers and workers in an organization come together to talk and listen to each other

    in order to find mutually acceptable ways of dealing with common problems and issues and it

    will create cordial employee relations.

    Furthermore, in this assignment consist of synopsis of Industrial Relation Act 1967, it is

    consist of Part I until Part X and however, Industrial harmony cannot be dealt with without the

    interplay of two other important legislations and they are the Employment Act, 1955 and Trade

    Unions Act, 1959. Together with the Industrial Relations Act, 1967, they form the basis of the

    Industrial Relations system in Malaysia. In Industrial harmony, it include background of

    industrial relation, role of employees and employers union which are strengthening a fair and

    equitable industrial relations management practices so as to enhance the confidence of

    employees, streamlining such management system to make it more effective, efficient and

    capable of maintaining conducive state of relations at the workplace and others.

    Finally, in this assignment, consist of some of analysis which is analysis about the key

    indicator of industrial department, analysis of trade dispute by causes and others.

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    2013.0 REFERENCES

    1. http://jpp.mohr.gov.my/

    2. http://jpp.mohr.gov.my/images/stories/jppm/Keharmonian_Di_Tempat_Pekerjaan.pdf

    3. http://jpp.mohr.gov.my/images/stories/jppm/PLWS.pdf

    4. http://en.wikipedia.org/wiki/Industrial_relations


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