CHAPTER 1: INDUSTRIAL RELATION

WHAT IS INDUSTRIAL RELATIONS m/s 2

 Industrial relations is the relationship between an employer and his employees, especially
where the employees are members of a trade union
 Industrial relations is also known as employee, labour or employment relations

INTRODUCTION

 The purpose of the industrial relations is to unite the group of employees and employers as
one big, happy family
 One of the important principles behind the industrial relations is the collective bargaining
between the employee’s union and the employer to achieve a collective agreement
 In Malaysia, the industrial relations is governed by the Industrial Relation Act 1967, which
serves the purpose to regulate the relations between employers and the workers/
employees, as well as preventing trade disputes that can burst out of control

THE FOCUS OF INDUSTRIAL RELATIONS m/s 3

1. Relationship between employers, employees and trade union

o Once workers unionise, which means that they become members of a trade union,
they have a collective relationship with their employer
o The union will represent the workers and speak on their behalf to the employer
when necessary
o In this situation, to encourage industrial harmony, it is necessary for both parties to
understand each other’s rights and obligations under the laws
2. Framework provided by the employment laws
o The employment laws lay down provisions which affect not only unionised workers
but all employees
o Some of the employment laws clarify the rights of trade unions and employers
whose workers are unionised and others set down minimum welfare provisions
which apply to all workers, whether unionised or not
3. Disciplinary procedures and termination of the employment contract

IMPORTANT OF INDUSTRIAL RELATION

 Uninterrupted production
 Reduction in industrial disputes
 High morale
 Mental revolution
 Reduced wastage

WHO NEEDS TO STUDY INDUSTRIAL RELATIONS? m/s 5

a. Workers
b. Trade union leaders
c. Managers
d. Lawyers
e. Officers and executives in human resource and industrial relations departments
TRIPARTITE INDUSTRIAL RELATIONS SYSTEMS: 3 PARTIES, ALL INTER-RELATED

1. Employers
2. Employees & their trade unions
3. The government

KEY PLAYERS IN MALAYSIAN INDUSTRIAL RELATIONS

 National Labour Advisory Council (NLAC)

 Ministry of Human Resources
 Malaysian Trades Union Congress (MTUC)
 Malaysian Employers Federation (MEF)
 International Labour Organisation (ILO)

ROLE OF THE GOVERNMENT IN IR m/s 17

 To protect welfare of workers – their safety, health and rights

 To promote good employer-employee relationships through a stable and peaceful IR system
 To assist the unemployed find employment – equip the unemployed with basic industrial
skills and to improve the skill level of the workforce
 To conduct national level human resource planning – assist to maximising the country’s
manpower resources through manpower planning

MINISTRY OF HUMAN RESOURCES m/s 17 -19

Departments which play a key role in IR:

 Department of Labour
The Department of Labour is headed by a Director-General who is assisted by a Deputy
Director-General. Directors of Labour supervises the state-level labour offices and sub-
offices. The department enforces the Employment Act 1955, the National Wages
Consultative Council Act 2011. The Children and Young Persons (Employment) Act 1966, the
Employment (Restriction) Act 1968, the Employees’ Minimum Standards of Housing,
Accommodations and Amenities Act 1990 (amended in 2019) and the Minimum Retirement
Age Act 2012. Through the Labour Court, the department inquires into disputes between
workers and employers over payment or non-payment of wages, allowances, retrenchment
and other benefits due to employees under their individual contracts of employment or as
required by the employment laws.
 Department of Industrial Relations
Like the Labour Department, the Industrial Relations Department is headed by a Director-
General. Reporting to him are a Deputy Director-General, the Director of Labour for Sabah
and the Director of Labour for Sarawak. The two Directors report to the Department of
Industrial Relations because their respective states they are responsible for both functions of
labour and industrial relations matters. Peninsular Malaysia is divided into five regions, each
with a Director of Industrial Relations and a number of Industrial Relations officers. The
department administers the Industrial Relations Act 1967 and is noted for its attempts to
help settle disputes between employers and employees through conciliation.
  Department of Trade Union Affairs
This department, headed by a Director-General, is responsible for enforcing the Trade Unions
Act 1959. This gives it a central role in the growth of the trade union movement. It has the
authority to register newly formed unions, de-register unions found breaking the law, check
a union’s annual accounts and generally to investigate anu specific complaints made against
a particular union, for example, in relation to the use of union funds and the election of
union officials.
 Department of Occupational Safety and Health
The Department of Occupational Safety and Health (DOSH) is responsible for enforcing the
Occupational Safety and Health Act (OSHA) 1994 and the Factories and Machinery Act 1967.
The Department also inspects workplaces and investigates major accidents.

OTHER KEY AGENCIES m/s 20

 The Employees Social Security Organisation (SOCSO)

This statutory body, reporting to the Ministry of Human Resources, implements the
Employees’ Social Security Act 1969, which provides benefits to workers and their
dependents in the event of work-related accidents. It administers an insurance scheme with
compulsory membership for all workers. It has also been made responsible for providing
payment to workers who have been retrenched and offering related re-training benefits.
 The Employees Provident Fund (EPF)
Like SOCSO, the Employees Provident Fund is an organisation to which all employees and
employers must make monthly contributions. This money is then made available to
employees when they reach 55 years of age. The purpose of the Employees Provident Fund
Act 1991 is to ensure that workers are not destitute once they retire from work.
 The Industrial Court
It is a specialised tribunal established under the Industrial Relations Act 1967 to arbitrate
disputes between employers and employees. While it is an independent body governed by
the rules of the judiciary, it plays a crucial role in the Malaysian industrial relations system.
 CHAPTER TWO THE HISTORY AND CURRENT STATE OF TRADE UNION MOVEMENT IN
MALAYSIA

Trade Union

 A union is an organization that represents employees interests to management on

issues such as wage negotiation, disciplinary rules and working conditions.
 It is an organization which consists wholly or mainly of workers of one or more
descriptions.

Historical Background

 First emerged in 1920s with the development of estates and mines.

 1920s onwards PKM, deliberately set out to develop the labor movement and
encouraged unskilled worker to unionize.
 The aggressive activity of the unions led employers to exert pressure on the colonial
government to introduce laws which would curb and restrict the unions.
 First law relating to trade union were implemented in 1940.
 In 1946, two steps in response to increased union activities:
o Trade Union Adviser Department was set up with the appointment of a Registrar
of Trade Union.
o Trade Union enactment was passed:
 All trade union had to be registered.
 Federation of trade unions could only be formed by unions in the same
industry.
 Union officials had to have been employed for a minimum of 3 years in
the industry which they represented.
 Intended to limit PKM involvement within the trade unions, restrict their size and power,
and to control the union movement.
 Only 1950s, the union movement was revived.

Elements of ‘Trade Union-ness’

1. There is an organization- not just group of individuals.

2. The organizations exists to represents its members to employers, the press, the
government and the public.
3. Its primary interests are in the terms and conditions of employment of its members.
4. The organization is not controlled by the employers.
5. The organization is prepared to bargain collectively on behalf of its members with the
employers.

Reasons for joining a trade union m/s 123

Employees join trade unions:

 To improve their economic situation

Workers join unions to improve their terms and conditions of service such as their pay
and benefits. Alone, the individual worker has limited bargaining power compared with
the employer. In modern society, people need paying jobs in order to survive. There are
times when they have to take whatever they can get, albeit unwillingly. If employee is not
 satisfied with the terms offered by the employer, he is powerless in the bargaining
process. It is only when workers join together and form trade unions that they acquire
strength. Workers who associate themselves with the legitimate activities of a trade
union are given protection under the law. This gives them the power to effectively
bargain with the employer for better terms and conditions.

 To ensure their rights at work are protected

Workers join trade unions so that they can increase the amount in their pay packets.
However, they also expect unions to protect them against discrimination by their
employer. Workers hope that their unions can cut across racial barriers, ensure fair
treatment for all, and minimise and eliminate unfair practices and favoritism. Workers
expect the union to protect them from exploitation and to protect them from unfair
treatment at work.

 For social reasons

Trade Union Objectives

 To promote the industrials, social and intellectual interests of its member.

 To obtain and maintain for its members just and proper rates of remuneration, security of
employment and reasonable hours and conditions of work.
 To promote the material, social and educational welfare of its members.
 To promote legislation affecting the interests of the members in particulars of trade
unionists in general.

Implication of Definition

The legal definition of “Trade Union” in the Trade Unions:

1. A trade union need not be called a union.

2. Membership of a union is limited to workers working in Peninsular Malaysia, or Sabah or
Sarawak.
3. Unions of a general nature are not permitted.
4. Employers and employees both have the right to form and join unions but must be
separated from each other.
5. Must conform to all legislative requirements of a trade union.

Membership of a Trade Union

Right To Form and Join Union:

 IRA section 5
o Workers in Malaysia have the right to form and join trade unions (freedom of
association).
 The workers also have the right not to join a trade.

 Industrial Relations Act (Section 5) states that:

o No employer shall prevent a worker from joining a union by putting a condition in
his contract of employment.
 o No employer shall refuse to employ a worker on the grounds he is a trade union
member of officer.
o No employer shall discriminate against a worker (for example in terms of
promotion) on the grounds he is a trade union member or officer.
o No worker shall be threatened with dismissal or dismissal if he proposes to join a
trade union or if he participates in union activities.

 Who Can Join A Union?

o A person who is above the age of 16 is eligible to apply to join which is relevant
to his trade, occupation or industry.
o Under the age of 18 are restricted in their union activities – not entitled to vote
on:
 Strikes and lock-outs and all related matters
 The imposition of levy
 Dissolution of the trade union or of the federation with which it is
connected
 Amendment of the rules of the trade union

 Under the age of 21 are not eligible to be elected as officers of the union unless:
o Bona fide workers
o Over the age of 18

 Public sector – can only join unions which represent workers in the same occupation,
department, ministry, body or authority.
 Police, Prison Service, Armed Forces and those in confidential or security work- not
allowed to join unions at all.
 Professional and ,managerial group in the public sector- not allowed to join unions
unless they are exempted by the Chief Secretary to the government.

Employers’ Attitudes to Unions

a. Conflict or open hostility

In Malaysia today, there are some employers who are prepared to use a number of tactics, some
of which may be illegal, to prevent their workers from joining unions. They consider unions to be
a “third party” intervening in the worker-employer relationship. These employers may believe so
strongly in their stand against unionisation that they will openly inform the workers that they
would rather close down the business than allow union interference in running their business

b. Controlled hostility
The employer recognises that employees have the right to form and join unions. However,
discreet attempts are made to discourage workers from joining and being active in a union. Such
 action, if proven, would amount to interfering with the legitimate rights of workers and is an
offence under the Industrial Relations Act

c. Accommodation
This attitudes is one of realism. The employer is prepared to compromise with the union,
tolerate it and be as reasonable as possible. This is a fairly typical attitude of most large
companies today

d. Cooperation
The management works closely with the union to promote the welfare of the organisation. Joint
effort is seen as essential for the survival of the enterprise

Creating a Non-union Environment

There are some positive steps to reduce or eliminate the workers from joining unions:

 Pay higher wages

 Give better benefits
 Involve employees in all levels of decision making and effectively implement an open-
door policy
 Offer training, development and a measure of security of tenure
 Develop a climate of trust and loyalty in the organization.
CHAPTER 3 THE EMPLOYMENT RELATIONSHIP

The Employment Contract Page24

 Contract of Service
o Is an agreement between an employer and an employee
o Any agreement, whether oral or in writing and whether express or implied,
whereby one person agrees to employ another as an employee and that other
agrees to serve his employer as an employee and includes an apprenticeship
contract

 Contract for service and Contractor for labor

o An independent contractor, such as a self-employed person or vendor, is
engaged for a fee to carry out an assignment or project
o contractor for labour means a person who contracts with a principal, contractor
or sub-contractor to supply the labour required for the execution of the whole or
any part of any work which a contractor or sub-contractor has contracted to carry
out for a principal or contractor, as the case may be;

Contract for labor Sec 33 EA

 Obligation of Wages under shared service organization (SSO)

o Section 33 Liability of principals and contractors for wages
 The principal employer has obligation to pay wages toward the employee
when the employer unfulfilled their obligation for more than the wages
due to him for any three (3) consecutive months
 i.e: UiTM is a principal employer toward cleaner contractor, therefore
UiTM have an obligation to pay the wages at least for 3 months if their
immediate employer fail to comply

The Employment Relationship

 The right of employers and employees and their respective unions is guaranteed by the
IRA 1967.
 IRA 1967 Section 4:
o The right to form and assist in the formation of a union
o The right to be a member of a trade union
o The right to participate in any lawful activities organized by a union

 The IRA 1967 also provided the responsibilities of employers and employees
o General Responsibilities
 Both the employers and employees must strictly adhere to the stipulated
laws and procedures and to carry out their duties as spelled out in these
laws and procedures

o Specific Responsibilities
 IRA Section 44 (1) provided specific prohibitions
 Prohibitions to employers
 Prohibitions to employees
Prohibitions to Employers

 IRA 1967 Section 5:

o No employer may do any of the following:
 Impose any condition in contract of employment seeking to restrain the
right of a person to join a trade union or to continue his membership
 Refuse to employ any person on the ground that he is or is not a member
or an officer of a trade union
 Discriminate against any person in regards to employment, promotion,
any condition of employment or working conditions on the grounds that he
is or is not a member or an officer of a trade union

 Dismiss or threaten to dismiss a workman injure, or threaten to injure him in his

employment or alter or threaten to alter his position to his prejudice for any of the
following reasons:
o That he is or proposes to become a member or an officer of a trade union
o That he seeks to persuade any other person to become a member or an officer
of a trade union
o That he participates in the promotion, formation or activities of a trade union

 Induce a person to refrain from becoming or ceasing to be a member or an officer of a

trade union by offering, conferring or procuring any advantage for any person

 IRA 1967 Section 7:

o A worker or trade union of workmen or its agent is prohibited from carrying out
the following activities:
 Persuading at the employer’s place of business, during working hours,
another worker to join or to refrain from joining a trade union except with
the consent of the employer
 Intimidating any person to refrain from becoming or to continue to be or
to cease to be a member or officer of a trade union
 Inducing any person to refrain from becoming or to cease to be a
member or officer of a trade union by conferring or offering to confer on
any person any advantage
CHAPTER 4 REGISTRATION FOR TRADE UNION

Registration for Trade Union

1. Every trade union is required to apply for registration from the DGTU within 1 month
from the date of its establishment.
 This period may be extended at the discretion of the DGTU but it must not
exceed 6 months (TUA 1959, Section 8).

2. The application for registration must be signed by at least 7 members, which is also the
minimum number needed to form a union.

3. Application must be accompanied by the required fees and a printed copy of the rules or
constitution of the union.

4. The 7 members must signed the prescribe forms that require details on:
 Name the trade union and address of its head quarters.
 Name, addresses and occupations of those members making the application.
 Names, ages, addresses and occupations of union’s officers.
 A printed copy of the rules or constitution of the trade union.
 Other information ad required by the DGTU:
o Copy of the minutes of the inaugural meeting.

5. Failure to apply for registration in due time or if the registration is refused, withdrawn or
cancelled:
i. The trade union is considered to be an unlawful association.
ii. Members are forbidden to participate, promote, organize or finance any strike or
lock out.
iii. The trade union has to be dissolved and all of is funds disposed in accordance
with the rules (TUA 1959, Section 19).

 The DGTU will REFUSE registration in the following circumstances:

i. If any of the union’s objectives are unlawful
ii. If any part of the union’s constitution conflicts with the TUA.
iii. If the name of the union is undesirable or identical to another already
existing, or if the name is deceiving.
o If he is satisfied that there is in existence a union representing workmen
in that particular trade, occupation or industry.
iv. If the union is likely to be used for unlawful purposes.

Power Of DGTU Towards Registered Union

 DGTU is also empowered to withdraw and cancel or deregister a union’s registration

on the following grounds:
1) On the union’s own request.
2) The certificate of registration was obtained through fraud.
3) The objects or rule of the trade union is contrary to the law.
4) If the constitution of the union or of its executive is contrary to the law.
5) If the union was used, is being used or will be used for purposes contrary to
the law or to the rules and regulations of the union itself.
 6) If the union has broken the provision under TUA or any rules and regulations
as provided under TUA or any rules and regulations of union or formulate any
rules and regulations that is contrary to that provision and continuously being
enforced.
7) If the union funds is used illegally or for purposes which is contrary to the
law or to the rules and regulations of the union.
8) If the union is no more in existence.
9) If there is more than one union registered in the particular trade, DGTU can
cancel the certificate of registration of union with lesser members (TUA 1959,
Section 15).

Union Funds

 Unions funds can only be used for paying of:

 Expenses related to salaries for employees of the union.
 Expenses related to the upkeep of an office.
(ex: Buy computer, stationery)
 Expenses related to the settlement of a trade dispute.
 Compensation to members for losses arising out of trade disputes.( ex:
strike allowance)
 Allowance to members and their families on account of death, old age,
sickness, accident or unemployment
 Expenses related to the publishing of a newsletter
 Expenses related to the organization of social, sports, educational and
charitable activities for members.

 Unions are required to submit annual, audited accounts to DGTU for checking – failure
would lead to de-registered (TUA 1959, Section 15).

Union Executives

 Led and managed by executives elected by the members at biennial or triennial

conferences.
 Confined to Malaysian citizen who had been employed for at least 1 year in the related
trade.
 May not be chosen from:
 Those who are office bearers or employees of a political party,
 Have been convicted of any criminal offences, or
 Have been adjudged bankrupt.

Union Employees

 Most of bigger trade unions employ full-time staff to run the daily business of the union.
 Confined to Malaysian citizen reside in either Peninsular Malaysia, Sabah or Sarawak.
 May not be chosen from:
 Those who are office bearers or employees of a political party,
 Have been convicted of any criminal offences, or
 Those who are officer or employees in other trade unions.

Types Of Unions
  Unions in Malaysia may be categorized as follows:
i. Public sector unions.
ii. Private sector unions.
o National unions.
o In-house unions.
iii. Employers unions.

Public Sector Unions

 Consists of the civil service, statutory bodies and local authorities.

 Can form and become members of a union either in the same ministry department or
occupation.
 Discussion regarding wages and other compensations is done at the national level
through Congress of the Unions of Employees in the Public and Civil Services
(CUEPACS).
 Not involved in CB.
 Examples: National Union of the Teaching Profession (NUTP), Malayan Technical
Services Union

Private Sector Employees’ Unions

 Either National or In-house union.

 Consists of workers that fall within the same or similar occupation, trade or industry.
 Have the right to bargain on matters pertaining to wages, allowances, compensations
and others.
 Have the right to take industrial actions such as picket, strikes and other actions as
provided by the law.

 National Unions:
o Attempt cover all workers in the same industry, trade or occupation.
o Sophisticated structure with regional branches and committees.
o Geographically limited.
o Ex: National Union Of Journalist (NUJ),
National Union of Banking Employees (NUBE)

 In- House Unions:

o Formed in an organization for the benefit of workers who work in that particular
organization.
 Members are all employed by the same employer.
o Workers from other organization are not allowed to become members.
Ex: Malaysian Airlines Employees Union, UMW Employees Union,
Alam flora Employees Union, Proton Employees Union

o Disadvantages of in-house:
 Weak as membership is limited.
In-house unions are generally weak because membership is limited and
confined to workers in one particular company
 Exploitation by employers.
 The leadership of such unions must be chosen from the small number of
members which may give rise to the possibility of the employer trying to
exploit such leaders
 Financial strength.
The union’s financial strength will not be enable it to carry out its normal
trade union activities
 Victimization among union leaders.
Fear of victimization among union leaders, particularly in relation to
promotions, termination of employment, transfers and assignment of
duties which are management prerogatives
 Capability of promoting social benefits.
In-house unions with small membership will be unable to provide
scholarships and other social benefits for their members
Structure of Unions

 Most of the national trade union have works committee in each company where they
have members.
 Committee of union elected by the members responsible for liaising with the
management on behalf of the members and gather information on member’s problems
and grievances to be passed up the union hierarchy.
 Geographical region will form a branch and will elect a branch committee to run the
branch if the union is large enough.
 At national level, executive council (the officials of the union) elected by the members
at a national delegates conference.
o Decide on policy matters and ensure the efficient running of union’s business.
 The size of the executive council will depend on the structure and the constitution of the
union.
o If it has branches, representative of these branches will sit on Executive Council.
o i.e: NUBE & Transport Workers Union (Refer text book)

 *Refer Figure 5.3 Structure of national unions

Affiliation to Other Bodies

 Trade unions in Malaysia are permitted to affiliate to other bodies, both within and
outside the country.
 However, affiliation to foreign bodies requires permission by DGTU.
 Many unions join MTUC to get support and advice.
 There are also unions who affiliate with oversea organizations.
o *Refer textbook for the example

Employers Unions

 Consists of a united group of employers formed to achieve various objectives of which

one of the objectives is to establish a mutual policy in bargaining with the worker’s union.
 *Refer examples in textbook
 Ex: Malayan Agricultural Producers’ Association (MAPA), Association Of
Insurance Employers (AIE).
 Strengthens bargaining power:
o Promote and protect the interests of members.
o To negotiate and deal with trade unions of employees.
o To represent members in any trade disputes.
CHAPTER 5 RECOGNITION OF TRADE UNION

Recognition of Trade Union

 Recognition by the individual employer is important where the union is accepted as the
rightful representative of his workers and has the right to speak on their behalf.
 Recognition is the starting point for collective bargaining.
 No recognition means the union cannot commence collective bargaining as well as to
enhance harmonious industrial relations.
 A trade union can be represent either a white collar workers or a blue collar worker.
 It cannot be representing both at one time (IRA Section 9).
 A written application must be made in prescribed form as required under IRA Section
9(2) to the employer claiming recognition.
 The employer must reply within 21 days after receiving the claims.
 The employer can either decide:
o To accord recognition.
o To refuse recognition with reasons given.
 (Union has 14 days to report to DGIR for further action and if not, the
recognition application has been withdrawn)
o To request DGTU to verify whether the union is the correct union for his industry
and whether the workers are member of the union.

 If employers fail to respond within 21 days, trade union can submit a written report to
DGIR.

Recognition of Trade Union

Recognition of Trade Union

Recognition of Trade Union

 Minister of Human Resources has the power to decide whether or not the union should
be recognized.
o Based upon recommendations of DGIR and DGTU
 Find out the percentages of the workers concerned belong to the union.
 If more than 50% of the eligible workers in the organization belong to the
union, the Minister will order recognition.

 DTU uses 2 methods:

o Membership check
 Company to furnish a name list of eligible employees.
 Union to provide a list of paid-up members in the company.
 Checked one against the other.

o Secret ballot
 DTU visit the place of work, assemble the workers together and distribute
ballot papers.
  Prohibitions during recognition:
o Workmen are prohibited from declaring pickets and strikes pending the
recognition application.
o Pickets and strikes are forbidden not only during the proceedings for recognition
but also after a decision was made by the minister relating to recognition.
o Employers also are forbidden from declaring lock-outs and terminating the
services of the workmen during specified period except termination under
disciplinary reasons (IRA Section 10(1)(2)).

 Implications of recognition:
o Once recognition is accorded to a trade union, no other trade union representing
the same workers or class of workers can apply for recognition within a 3 years
period from the day recognition was accorded.
o However, the limitation is waived if the union accorded with recognition cease to
exist within the stipulated period.
o If the application for recognition is rejected, the particular union can only reapply
for recognition after 6 months from the date of rejection.

2 Type of Recognition

1. General Recognition:
o Where the union represents majority of the workmen, the trade union is entitled
to make representation, in addition to the above general question of terms and
conditions of service on behalf of all workmen, whether or not they are members
of the trade union

2. Limited Recognition
o Where the union represent a minority of the workmen, it entitled to make
representation on individuals grievances and to negotiate on behalf of its
members only.

De-Recognition?
 Union which has been granted recognition by an employer cannot have the that
recognition taken away.
 There is no0 legal provision for de-recognition as there is for de-registration.
 If a worker wants to join another union they can request recognition for this union after
three years elapsed from the granting of recognition to the first union.
o (inter-union battles, between national union and in-house union.)
 DGTU has the power under TUA Sec. 15 to cancel the registration of the union which
does not have majority support or to issue an order requiring the union to remove from
its membership list who are not anymore belongs to the uinion.
CHAPTER 6 COLLECTIVE BARGAINING

Deciding terms & conditions of service

 Wages and other terms & conditions of service can be decided upon:
o Unilaterally, by the employer
o Bilaterally or jointly by the employer and the representatives of employees
o Bilaterally, but with controls established by the state

 When workers belong to a trade union, they gain the right to decide upon terms &
conditions of service jointly with the employer through the process of collective
bargaining.
 The outcome of collective bargaining is a collective agreement.

Collective Bargaining
 IRA defines Collective Bargaining (CB) as negotiating with a view to the conclusion of a
Collective Agreement (CA).
 The rights of the workmen to bargain collectively with the employer on terms of
employment and conditions of work as well as to collectively withhold labor to back up
the process of CB.

Pre-Conditions
 For effective bargaining:
1. Workers must have the right to form collective associations:
 Workers must have the right to form the join trade unions.
 The right to form and join is indicated in the IRA 1967 (Section 5).
 Trade union activity is legal within the limitation set by the law.
 CB could not take place without this right.

2. Unions must have bargaining strength:

 Recognized by the employer.
 Has adequate financial strength.
 Members are united.

Recognition of Trade Union

 Recognition by the individual employer is important where the union is accepted as the
rightful representative of his workers and has the right to speak on their behalf.
 Recognition is the starting point for collective bargaining.
 No recognition means the union cannot commence collective bargaining as well as to
enhance harmonious industrial relations.

Advantages of Recognition
 1) The union can represent individual members who have grievance/complaint.
2) The union can negotiate for better terms and conditions on behalf of all workers in the
workplace.

Managerial Prerogatives
 However, there are issues the employer refuses to bargain which include:
o The promotion by an employer of any workmen from a lower grade or category
to a higher grade or category.
o The transfer by an employer of a workmen within the organization.
o The employment by an employer of any person that he may appoint in the event
of a vacancy.
o The termination by an employer of the services of a workmen by reason of
redundancy.
o The dismissal and reinstatement of a workmen by an employer.
o The assignment or allocation by an employer of duties or specific tasks to a
workman.

Bargaining Levels
 Collective bargaining may be conducted:
o At industry level whereby employer’s union and national employees’ union
negotiate
o At company level whereby employer negotiates with national employees’ union
o At company level whereby employer negotiates with in-house employees’ union

Collective Bargaining Procedure

1. Step 1
 Trade union submits in writing a proposed collective agreement to an employer
and invites the latter to begin negotiations
2. Step 2
The employer must reply to the invitation within 14 days
3. Step 3
If the employer agrees to begin negotiations, the first bargaining session must
start within 30 days of the agreement or employer may refuse to negotiate, in
which case a trade dispute is deemed to exist and the union may inform the
Director General of Industrial Relations and request conciliation
4. Step 4
If it is agrees to begin negotiations, the agreement will be put in writing and
signed by both parties, after which it must be deposited with the Industrial Court
within one month of it being signed. The Industrial Court taking cognizance
where the function is to check through the agreement to ensure that it complies
with the law
5. Step 5
Once the collective agreement has been given cognizance, it becomes a binding
document enforceable by the Industrial Court

Continue Collective Bargaining Procedure

Collective Bargaining is Continuous Procedure

Bargaining Team
 Membership of bargaining team will vary depending on the situation.
o Will be responsible for all preparation prior to negotiations and during
negotiations.
 What are the characteristics of effective negotiator?

Preparation for CB
 Prior to commencement of negotiations, both parties will:
o decide who shall represent them
o collect information about the other party’s strengths and weaknesses
o collect economic data
o get a mandate from their principals
o decide on strategies and tactics

Collection of Information 192

i. Know the opposition
o Financial strength.
o Total membership.
o Power structure and personality of union leaders.
 o Any internal problems.

ii. Economic condition

o The union demands will depend on the financial capacity and profitability of the
company.
o Need to analyze recently signed agreements in comparable companies and
industries.
o Collect information on the Consumer Price Index (CPI).

Objectives, Strategies and Tactics

 Objectives, strategies and tactics of Negotiations/Unions.
 Objectives, strategies and tactics of Employers.
CHAPTER 7 COLLECTIVE AGREEMENT

Collective Agreement

 An agreement between trade union of employees and the employer/employer union

 According to IRA (1967):
o “collective Agreement” means an agreement in writing
o Concluded between a trade union of workmen on one hand and a trade union of
employers/employer on the one hand during Collective Bargaining process
o Relating to the terms and condition of employment and work of workmen or
o Concerning relations between such parties

Take cognisance by Industrial Court

 For the IC recognize a CA as a binding and valid document, it must fulfil certain conditions
(take cognisance):
a. It must name the parties to the agreement
b. It must specify duration of the agreement, which cannot be less than 3 years
c. It must include a procedure for modification and termination of the agreement
d. It must specify the procedure to be used to settle any dispute over the
interpretation and implementation of the agreement
e. It must not include items of managerial prerogatives

 The may require the signatories(Employees trade union and employer) to amend the
agreement if it does not comply with the requirements of law
 Once accepted, it becomes an award and binding on both parties
 The Industrial Court may require the signatories (Employees trade union and employer) to
amend the agreement if it does not comply with the requirements of the law
 Once the Collective Agreement have been accepted by the Industrial Court, it becomes an
award and binding on both parties

Items in Collective Agreement 202

 Items to be considered:
o A clause which states that any current agreement will remain in force until a new
agreement is signed
o Signed supplementary memoranda with a covering letter stating that they are meant
to be read together with the CA
o Simple and unambiguous wording
o Language used must be understandable – which official version to be used

 Items to be included:
o Recognition
 Name of employer accept the CA which usually appear in the beginning of
CA
  Its purpose is to identify the union that is recognised as the bargaining
representative and to describe the scope of the agreement
o Union security – include check-off clause
o Compensation and benefits
 Employers and union are encouraging to link wages with productivity

o Existing benefits
 Include the clause in the agreement which states: “All other existing benefits
and practices not herein covered in this agreement shall continue to be
inforce”
o Procedures
 Internal advertising for job posting
 Disciplinary and dismissal
 Processing grievance (complaint)
 Consultation on workforce issues
 Claims of sexsual harassment
CHAPTER 8&9 TRADE DISPUTES AND INDUSTRIAL ACTION

Grievance
 Grievance is an individual employee’s complaint.
 Any factor involving wages, working hours or conditions of employment that is used as a
complaint against the employer.
 The best way to handle grievance is to create a conducive work environment that will
not promote dissatisfaction among employees.
 Grievance will lead to dispute only when union is willing to represent the worker.

Grievance Procedure
(Ex: National Union of Petroleum and Chemical Industry Workers)

1. Step 1
o If the employee fails to obtain satisfaction from immediate supervisor/ officer, he
may approach his manager, and if he so desires, a union branch official
o If the employee still fails to obtain satisfactory resolution within 5 working days,
he may refer his grievance in writing, either directly or through union, to the
Personnel Manager.
2. Step 2
o If the matter is still not settled within a further 7 working days, the union’s
branch shall make representation in writing to the General Manager or his
appointed deputy. The GM or his deputy will then arrange a meeting within 10
working days after received the letter.
3. Step 3
o If the matter still not resolved after this meeting or any further meeting which
both parties may agree to hold, the Union may make a formal representation to
the company in writing through General Secretary within 10 working days of the
date of final meeting at this level.
o Upon receipt of the Union’s letter, the company will offer to make arrangement
for a meeting between the company and the union which will be attended by
senior officials of the Company and the union and the meeting should be held
within 10 working days after received the letter.
4. Step 4
o If matter still remains unresolved after this meeting or any further meeting which
both parties agree should be held, both parties agree to refer the dispute for
settlement under the provisions of the IRA.

Trade Disputes
 According to IRA 1967, trade disputes is defines as:

“Any dispute between an employer and his worker which is connected with the employment or
non-employment or the terms of employment or the condition of work of any such
worker”
  For a trade dispute to exist, the workers must be members of a trade union.
 Trade disputes may concern:
o A grievance of an individual worker, or
o A group of workers who are not satisfied with their terms and conditions of
service
 For a trade dispute to exist, the employee or employer concerned must be represented
by their union.
 Dispute regarding to employee’s reinstatement, the employee do not have to be
represented by a trade union.

 Trade disputes are also known as industrial disputes. Could be caused by:
1) An individual who has grievance and is represented by his union and who has
exhausted the grievance procedure without getting a satisfactory results.
2) A difference of opinion between a union and an employer as to the appropriate
terms and conditions of service for the workers.
3) A difference of opinion as to the interpretation of a CA or IC award.
4) The non-implementation of an agreement or award.

 When a trade dispute exists, a trade union may take industrial action to force an
employer to give in to its demands.
 Industrial action by a union of employees may be in the form of:
o Boycott
o Sabotage
o Work-to-rule
o Taking sick leave or emergency leaves at the same time
o A picket, and/or
o Strike

 However, the only form of industrial action recognized by the law is:
o Strike
o Picket
o Lockout (for employer)

Picket
 Picket can be conducted by one or more workmen at or near the place where the
workmen work and where a trade dispute involving such workmen exists. (IRA 1967,
Sec. 40)
 Members of a registered trade union have the right to picket at or near their workplace
when a trade dispute occurs.
 Picketing is commonly the first attempt at industrial action taken by workers.
 Often held at lunch time and before/ after working hours.
 Used to communicate issues to the public and to embarrass the employer.
  Picketing are common, but rarely give impact to the economy – as it take place usually
outside working hours & does not directly affect the output of the workers.
 Picketing is not permitted – once a trade dispute has been referred to the Industrial
Court for arbitration.

 Condition on holding a picket:

o A picket must not obstruct the entrance or exit to the workplace
o A picket must be peaceful
o Not intimidate anyone
o Only workers directly involved in the dispute can participate

 No police permit is required for a picket neither they can be dispersed by the police –
picket is a legal activity
 A workman found guilty of non- compliance is liable to:
o Fine of not exceeding RM1000.00
o Imprisonment of not exceeding a year
o Or both (IRA 1967, Sec. 40 (3))

Strikes
 Section 2 of IRA defined strikes as the cessation of work by a body of workmen acting in
combination, or a concerned refusal or a refusal under a common understanding of a
number of workmen to continue work or to accept employment, and includes any act or
omission by a body of workmen acting in combination or under a common
understanding, which is intended to or does result in any limitation, restriction,
reduction or cessation of or dilatoriness in the performance or execution of the whole or
any part of the duties connected with their employment
 In brief, strike is any stopping of work by a group of workers including any attempt to
limit or slow down production on purpose.
 Members of a registered trade union have the right to strike in the event of a trade
dispute.
 For a strike to be legal, it must comply with the requirements laid down in the Industrial
Relations Act and the Trade Unions Act.
 Strikes not only need the workers to stop working, it can also take place when a
reduction of output occur such as:
o Slow down
o Work slow
o Work-to-rule
 Only members of a registered trade union have the right to strike
 A trade dispute must exist in order for workers to have the right to strike
 Sympathy strike, political or general strike & wildcat strike – illegal
o Sympathy strike – a group of workers who are not involved in a trade dispute go
on strike to show support
 o Political or general strike – strike aimed at the government
o Wildcat strike – strike called without taking any ballot or follow strike procedure

Strikes Procedures
 Prior to strike action, the workers need to followed these conditions:
1) The employees must be members of a registered trade union.
2) The employees must have a trade dispute with their employer.
3) The employees who have a trade dispute must take a secret ballot before they go
on strike. The strike is only permissible if two-thirds (2/3) of the union members
concerned vote for the strike action.
4) The result of the secret ballot must be sent to the director General of trade
Unions (DGTU) within 14 days of taking ballot.

o The employees must wait for at least 7 days after sending the result to
the DGTU before commencing the strike (cooling off period).
o The secret ballot is only valid for 90 days.
5) If the dispute is referred to the IC for arbitration (after the breakdown of
conciliation talks), the strike action must be cancelled.

 The ‘cooling off’ period is intended to allow:

o DGTU time to check the validity of the ballot
o Union members to rethink about their decision
o The employer for second thoughts
o The Minister of Human Resources to interview and refer the dispute to the IC.

 Role of DGTU in strike:

o TUA Section 40 (6):
• DGTU can instruct the trade union not to carry on with the proposed strike/
lockout if he satisfied that the proposed strike/ lockout if launched would
contravene the trade union ordinance or any other written law.
o TUA Section 40 (8):
• DGTU may inspect the secret ballot and retain it for certain period as he
deem necessary.
o TUA Section 40 (9):
• DGTU can declare the secret ballot invalid if he found that the trade union
has contravened any related provisions of TUA.

 In practice, nearly all disputes not settled at conciliation are immediately referred to the
Industrial Court.
 Thus, while it is possible in theory for employees to go on strike legally, it is very rare for
this to happen because of the procedures laid down in the law.
  Failure to follow the required procedures is a serious offence for which individuals as
well as any trade union involved could be prosecuted.

Strikes in Essential Services

Strike is prohibited in any of the following circumstances:

 If no secret ballot from the total numbers of members was done. The result has to show
a 2/3 consent to the strike.
 If it is conducted within the 7 days of cooling-off period after submitting the results to
the DGTU.
 If it does not follow the requirements set in the TUA.
 If it is conducted during and 7 days after the proceeding of a BOI appointed by the
Minister.
 If the dispute has been referred to the Industrial Court.
 If the trade dispute is concerning matters of Managerial Prerogatives.
 If the matters of dispute are covered in the CA.
 If YDP Agong has refused permission for a trade dispute in the public sector to be
referred to the IC for arbitration.

If the strike is due:

 To political purposes.
 To sympathy with other employees.
 Wildcat strike or lightning strike
  THE STRIKE IS UNLAWFUL

Lockout
 Section 2 of the Industrial Relations Act defines a lockout as the closing of a place of
employment, the suspension of work, or the refusal by an employer to continue to
employ any number of workers employed by him, in furtherance of a trade dispute,
done with a view to compel those workers to accept terms or conditions of work or
affecting employment
 Lockout is similar to strike except that it is an industrial action taken by the employer
against the employees.
 Employer closes the place of employment or suspend the employees’ work or refuse to
continue to employ the employees employed.
 Lockout can only take place in furtherance of a trade dispute with the intention to make
the employees accept the terms or conditions of employment.
 Lockout is the employer’s weapon to force employees to accept terms and conditions of
employment.
 Lockout can be declared either by an individual employer or by a trade union of
employers.
 The procedures and restrictions that need to be followed by the employer are actually
similar to those found in strikes.

Penalties for Illegal Strikes

 Workers involved may be dismissed
Employers have the right to dismiss workers who participate in an illegal strike, and they
commonly make use of this right
 Workers may be removed from union membership roll by order of DGTU
Members of a union who participate in any illegal strike action can be struck off as
members of the union and they are not eligible to rejoin the union or any other union
without the express permission of the Director-General of Trade Unions
 Workers involved may be penalized under Internal Security Act (ISA)
Illegal strikes risked being penalized under the ISA which allowed imprisonment for an
indefinite period without benefit of trial if a person was believed to be a security risk
 Union leaders may be fined and/or imprisoned
If a trade union is found to be involved in illegal strike activity, the executives can be
fined, imprisoned, or both
 Union may be dissolved

Settlement of Trade Disputes

 There are 4 methods for settling disputes:
i. Direct Negotiation
 The ideal method for settling disputes where two parties involved
(employer and union) are willing to come together for discussion until a
satisfactory compromise is reached.
  Solution arrived through mutual decision by both parties without
involvement by 3rd party.
 For example, a collective agreement must include a grievance procedure,
where a method the parties can use to settle any dispute arising out of
the implementation of the agreement
 No conciliation can be imposed until the parties have failed in their
attempt in direct negotiation.

ii. Conciliation
 Conciliation is the process of arriving at a settlement of a trade dispute
with the help of a 3rd, neutral party
 In trade disputes, conciliation is carried out by officers of the Department
of IR.
 Conciliation can be voluntarily requested by either of the dispute parties
or Director-General of Industrial Relations which known as compulsory
conciliation.
 The conciliator will meet the parties either separately or jointly and help
the parties arrive at a compromise which is acceptable to both sides.
 Conciliator has no authority to insist the parties to accept any
recommendation and only can advise.

iii. Mediation
 Mediation is a relatively rare method of settling a trade disputes and it is
not mentioned in the employment law but occasionally used.
 Mediation is similar to conciliation but mediator is not usually from the
government, but considered unbiased, impartial, respected and trusted
by both parties.
 A politician or other local leader may intervene in a dispute at the request
of the parties and he or she may be able to bring about a settlement
 For the parties to engage a professional mediator who has knowledge of
industrial relations and has sufficient skill to be able to bring the parties
to meet face-to-face and explore creative solutions to their dispute
 Both parties need to pay for the services of a mediator whereas
conciliation is provided free by the Department of Industrial Relations.

iv. Arbitration
 When the disputing employer and union cannot find a solution by
themselves with help of Department of Industrial Relations, arbitration
may be the only way to settle the dispute.
 In arbitration, an impartial third party is given the authority to settle the
disputes by examining the information given by both sides and making
judgement which is Industrial Court where it is only has the power to
arbitrate labour disputes.
CHAPTER 10 INDUSTRIAL COURT

INTRODUCTION

 The Industrial Court Ordinance of 1948 provided that a tribunal could hear disputes at the
request of the parties involved.
 In 1965 the Industrial Arbitration Tribunal was set up to deal with disputes in essential
services.
 The present IC was established by the IRA 1967 as a successor to the Industrial Arbitration
Tribunal and the Arbitration Court.
 IC is highly specialized and deals only with trade disputes.
 Does not have powers to hear any other types of cases.
 The IC’s powers – clearly laid out in the IRA.

PURPOSE & OBJECTIVE OF IC

 To provide a peaceful & unbiased means of settling disputes between employers &
employees.
 To carry the function of arbitration.
 Not only play major role in resolving conflicts, but also effectively prevents conflict from
escalating.
 Once a dispute has been referred to IC for arbitration, industrial action becomes illegal (IRA
Section 44).
 Major role – settling employment-related disputes.

STRUCTURE OF IC

 Head
o Headed by a President (appointed by the Agong)
o Must have at least 7 years of experience as a lawyer before his appointment (IRA)
o Or he must be a member of judicial service
 Cases in which a TU is involved are heard by:
o The President or one of the chairman
o 2 member panel – representing employers & employees respectively
 Panel’s members
o Appointed by the court President after consultation with relevant organizations
(MTUC & MEF)
o This bodies submit lists of persons considered suitable to sit on the panels
o The President empowered to choose from the lists
o In the case of complaint of unfair dismissal, the President or Chairman can sit alone
without a panel

COURT PROCEEDING

 IC has the power to call witnesses & documents when necessary.

 The usual manner:
 i. Before hearing – the parties to a dispute are required to submit a written summary
of their argument (pleadings).
ii. During hearing
1. Each party is given the opportunity to orally present its version of the events
leading to the dispute.
2. Introduce witnesses & documents to prove its case.
3. Each party is permitted to cross-examine witnesses from the other side.
iii. After hearing – the Court adjourns to make decision, which will be written up (the
decision is known as an award of the Court).
 Occasionally, hearing will held ex parte:
o If one of the parties does not turn up in court & the court is satisfied that the party
concerned was well aware of the hearing date, the case will be heard even though
that party is not present.

AWARDS OF IC

 Awards – decisions of the Court.

 The awards are binding on the parties involved.
 When making an award- the Court does not have to agree with the demands of either party
but is empowered to make its own decisions.
 Awards are not only binding but are also final – cannot be challenged or appealed.
 According to Section 56 IRA 1967, any party who does not comply with terms of an award is
guilty of an offence, and if convicted can be fined or jailed.
 However, at the discretion of the Court, question of law can be referred to the High Court.

JURISDICTION OF THE COURT

1. Claims for reinstatement.

o An employee who has been dismissed can lodge a claim for reinstatement with the
DGIR within 60 days of his dismissal (Sec 20 IRA 1967)
2. Court’s power in claims of dismissal without just cause or excuse.
3. The court and claims relating to retrenchment.
o The court’s role is to ensure that any retrenchment exercise is carried out as fairly as
possible.
o Retrenchment is a management prerogative and not bargain able issue but however
it can cause a trade dispute between a union and an employer, or it can lead to a
complaint by an employee under Sec 20, IRA 1967.
4. Code of conduct for industrial harmony.
o In brief the code requires first that retrenchment as the last resort and recent years,
many organizations have introduced Voluntary Separation Schemes (VSS).
5. Trade disputes.
o Court arbitrates on trade disputes where:
 An individual worker has a grievance and is represented by his union; or
 A union, representing the workers in a particular company, has a dispute
with an employer over terms and condition of service.
6. Scope of a CA.
 o On occasion, parties involved in CA unable to agree as to coverage or scope of the
agreement. As example employer wish to exclude temporary and casual employees.
7. Bonus.
o Bonuses can be either contractual or non-contractual. It based on Flexi-wage system
or on annual basis.
8. Salary increases.
9. Managerial prerogatives.
10. Reduction of existing benefits.
11. Interpretation of CA or awards.
12. Complaints of non-compliance.
CHAPTER 11 THE LAWS AND PRACTICE RELATING TO TERMINATION OF EMPLOYMENT

Principle of Natural Justice

 The principles of natural justice concern procedural fairness and ensure a fair decision
imposed on persons or bodies acting in a judicial capacity.
 In the event of a hearing taking place or a decision being reached which breaches the
principles of natural justice, the person charged may seek a review of the hearing
and/or decision in the courts.

 There are common law rules are referred to in relation to natural justice or procedural
fairness:
i. Rule of hearing Both sides
a. Employees has right to know of what he is accused
 Must be presented with a written charge sheet which lay out the
nature of the misconduct which the employee has allegedly
committed, the date, time, and place when the misconduct
occurred.
 Ex: Gross misconduct such as fraud or fighting at workplace.
b. The employee should not be condemned unheard
 Need to give chance to him/her to tell their version
 If the accused worker is a union member, he has right to be
presented by union.
c. Employees must be given time to reply to accusations
 Reasonable amount of time should be given 48 hours to 7 days
 Give time to think or to prepare what he want to talk about
his/her version of story.
 In the case of fraud, more time will give to prepare all the
documents and witness.

ii. Rule of against bias

a. This second rule states that the requirement that the deciding authority
must be unbiased when according the hearing or making the decision.
b. An Inquiry officer should be appointed to preside over the hearing and to
act as chairman of the panel of inquiry and assisted by 2 other
employees.
c. The 3 panel should be employees of higher rank than the accused
employee and do not know the accused employee personally and any
info about the case.
d. Investigators and decision-makers must act without bias in all procedures
connected with the making of a decision.
e. A decision-maker must be impartial and must make a decision based on a
balanced and considered assessment of the information and evidence
before him or her without favoring one party over another.
Disciplinary Action
 Employers have the right to take disciplinary action against employees whereby lead to
dismissal of employee or imposition of some other punishment.
 Employers should take disciplinary action in either two (2) situation:
i. Workers disobey rules set by employer/ behavior is unacceptable i.e. commit
misconduct.
ii. Worker’s job performance fails to meet reasonable standards.
 Disciplinary action for unsatisfactory performance
i. No DI is necessary. Employee must be warned, and given time to improve.
Employer should provide assistance so that employee can improve.

General Guidelines on taking Disciplinary Action

1. It should be given in private
No worker likes to be embarrassed in front of his colleagues. Therefore, any disciplinary
action, especially an oral warning, should be given in private. Of course, recognition for
good work and praise are given in public
2. It should be expected
The employees must know the rules of the organization and the penalties for breaking
the rules. Every workers should be given a copy of the rules and be offered an oral
explanation of them to ensure he understands. The employee should be asked to sign a
statement saying that he has read and understood those rules and that he agrees to
abide by them. This statement should be filled in the employee’s personal file. By so
doing, the employee cannot, at a later date, complain that he was not told the rules of
the company.
3. Action should be consistent
Consistency means that the same act of misconduct committed by two different workers
should lead to the same penalty. Thus, there should be no question of supervisors’
favourites being permitted to break the rules but others being punished. Moreover,
different supervisors must give the same penalties to their subordinates when rules are
broken. It is likely to destroy morale when one supervisors usually ignores acts of
misconduct while another is very strict on taking action. To ensure consistent,
disciplinary action within the organization, supervisors should periodically undergo
training together to give them a common frame of references
4. It should be immediate
Disciplinary action should be taken immediately or as soon as possible after the
misconduct is discovered. Hasty action, however, is not advisable such as the
management must take adequate time to find out the facts of the case and should never
rely on hearsay. Proof of misconduct is necessary which mere allegations are insufficient
5. It should be progressive
Progressive discipline seeks primarily to correct the employee’s behavior rather than
punish him. Therefore, it requires that increasingly severe penalties be imposed on
workers who repeat an act of misconduct. It is necessary for organizations to have a
clear policy on the time period after which an employee’s record will be considered
clear. It is surely unfair that if an act of misconduct is repeated some five or more years
 after the first offence, and the offence is of a minor nature, that a severe penalty be
imposed

Disciplinary Action For Misconduct

 IC defined misconduct as follows:
“Improper behaviour, intentional wrong doing or deliberate violation of a rule or
standard of behaviour…”
 Misconduct may occur at the work place during working hours.
 Employees behaviour that is not directly related to his work may also considered as
misconduct..i.e; (tarnishes the image of employer/ no longer able to trust or have
confidence in him or her).

Example of Misconduct

 If employees commits in minor misconduct, suitable punishment will be warning or

suspension without pay for one or two days.
 For major misconduct, appropriate punishment may be an immediate dismissal.

Taking Action against Acts of Minor Misconduct

1. Oral Warning
i. Ask him whether he has any explanation for his behaviour,
ii. Remind him that the behaviour is not acceptable, and
iii. Warn him not to repeat the misconduct, or any other type of misconduct.

2. Written Warnings
i. If an employee repeats an act of misconduct for which he has been given an oral
warning, a written warning must be issued.
ii. A written warning can be in the form of a standard letter to the employee.
iii. The warning letter should be signed by the employee’s immediate superior, with
a copy to the HR officer so that a copy can be placed in the employee’s personal
file.
Progressive Disciplinary Procedures

Procedures Prior To Dismiss Due To Major Misconduct

Investigating Allegation of Misconduct

 What is the PURPOSE of an investigation?

1) To determine whether there is sufficient evidence that misconduct has been
committed, i.e. whether there is a prima facie case
2) To collect evidence that may be presented at the Industrial Court
3) To determine the modus operandi (M.O.) so as to prevent further similar
incidents
 WHO should investigate?
o One or more neutral persons with knowledge of investigation techniques. HR/IR,
Security, Audit, etc.
o The investigators must be trustworthy.

 Investigator or team of investigators must gather all available evidence so that a case
may be brought against the worker concerned.
 The investigator will look for answers to questions such as the following:
 What rules, express or implied, were broken?
 When did the alleged misconduct occur?
 Where did the alleged misconduct occur?
 Who witnessed the misconduct? What did they see or hear?
 Do any other parties have relevant information about the misconduct?
 Other than witness, are there any other types of evidence available to prove the
guilt of the accused workers? Are there any relevant documents or object?
 How was the misconduct carried out?

 Investigation Report
o To recommend whether enough evidence has been collected to suggest that the
organization has a sufficiently strong case to take action against the employee
o It also helpful to identify any weakness in the management system which
allowed the employee to commit the misconduct.
o If the investigator decides a prima facie case (enough evidence to proceed
disciplinary action) the employer can organize a domestic inquiry to hear the
evidence against the employee.

 Characteristics of well-conducted investigation

Suspension
 Many organization may decide to suspend from work the employees who had allegedly
committed misconduct (max 2 weeks with ½ pay).
 Suspension may be necessary in any the following circumstances:
o When the worker’s presence might threaten the work situation
o When there is a perceived need for a cooling off period, i.e. when physical
violence has taken place
o When it is necessary to remove the employee from the opportunity to continue
his misconduct, i.e. when criminal breach of trust (CBT) or embezzlement (theft)
of company funds is suspected
o When it is suspected that the employee may have the opportunity to tamper
with documentary evidence or threaten witnesses
 Employee within scope of EA 1955
o Employer has right to suspend the employee prior into his misconduct
 Employee is not within scope EA 1955
o Employer has no right to suspend an employee without pay or on half-pay unless
the employment contract expressly includes a clause on this matter.

Investigating Allegation of Sexual Harassment

  Procedures for dealing with sexual harassment are basically the same as for any other
type of misconduct.
 However, certain modification may be necessary from normal disciplinary procedures
due to their nature of case.
 Complaint of sexual harassment should never be ignored.
 Employer is advisable to appoint a special committee of investigators to deal with any
complaint of sexual harassment that had been trained in counselling and interviewing
techniques which consist of both males and females.

Outlines of in-house mechanism to combat sexual harassment

 Employers are encouraged to establish an in-house mechanism to prevent, handle and

eradicate sexual harassment in the workplace. The mechanism should include at least
the following elements:
i. a policy statement prohibiting sexual harassment in the organization;
ii. a clear definition of sexual harassment;
iii. a complaint / grievance procedure; disciplinary rules and penalties against the
harasser and against those who make false accusation;
iv. protective and remedial measures for the victim; and
v. promotional and educational programmes.

Code of Practice on Preventing and Eradicating Sexual Harassment in the Workplace

 Malaysia has no particular law prohibiting sexual harassment at the workplace but
MOHR has distributed a Code of Practice on Preventing and Eradicating Sexual
Harassment in the Workplace
 The purpose of the Code of Practice is to provide practical guidance to employers,
employees, trade unions and others relevant parties on the protection of the dignity of
employees.
 The aim is to ensure that sexual harassment does not occur and, if it does occur, to
ensure that adequate procedures are available to deal with the problem and prevent its
recurrence.
 Definition of sexual harassment– refer to page 265

Conduct Fair DI
  A useful Domestic inquiry must properly organized according to principle of natural
justice.
 A fairly conducted DI will fulfill the following requirements:
o Ensures that all evidence against the employee is examined carefully &
thoroughly by a group of independent persons.
o There is less possibility of an innocent employee being dismissed – employee
can’t claimed unheard.
o Employer can be confident that he has treated his employees justly and fairly.

Hold Domestic Inquiry

A. DI follows the format of a criminal court trial but is simplified.

o Panel of Inquiry chairman is responsible for smooth conducting of the DI.
Chairman must ensure employee is treated fairly and justly.
o Employer must prove the guilt of the employee to the satisfaction of the Panel of
Inquiry.
o Employer opens the DI by introducing witnesses and evidence. Examination and
cross-examination of witnesses takes place.
o Employee offers evidence in his defense, if any. Examination and cross-
examination of witnesses takes place.
o After final closing submissions, Panel of Inquiry make a decision, put it in writing
with justifications and submit to the employer.
o Stages in conducting a domestic inquiry – refer to page 262

Stages in conducting a domestic inquiry/domestic inquiry process

1. Stage 1
Members of the panel of inquiry introduce themselves and identify those present. A
short briefing is given to the parties concerned by the panel on the procedures and rules
to be applied during the inquiry
2. Stage 2
The panel members read out the charge(s) to the accused employee and ask him
whether he pleads guilty or not to the charge(s)
3. Stage 3
The prosecuting officer calls his first witness. Information is elicited through a question
and answer format. When the prosecuting officer has no more questions to ask of the
witness, the accused employee is permitted to cross-examine him or her, also through
the asking of questions
4. Stage 4
The prosecuting officer calls his next witness, if any. The process is the same as for the
first witness. The prosecuting officer continues to call his witnesses, one at a time, until
he has no more witnesses or evidence to offer
5. Stage 5
 The accused employee calls his first witness, if any. As above, information is given in a
question and answer format. The prosecuting officer is permitted to cross-examine any
witnesses brought by the accused employee. The accused continues to call further
witnesses, one at a time until he has no more witnesses or evidence to offer
6. Stage 6
Both parties are invited by the panel of inquiry to sum up their evidence. After these
submissions, the domestic inquiry comes to an end
7. Stage 7
Members of the panel of inquiry discuss their findings and prepare a report to be
submitted to the employer. They will decide whether they find the accused employee
guilty or not and the justification for their finding

Dismissal for Unsatisfactory Performance

 No DI necessary
 Employee must be warned, and given time to improve. Employer should provide
assistance so that employee can improve.
 Procedure prior to dismissing an employee for poor performance – refer page 267

The Right of Probationers

 Probationers are employees and, therefore like all other employees they must treated
fairly.
 Employee who are on probationary period and turns out to be unsuitable for the job
during his trial period, his services can easily be terminated.
 Notice period prior to termination that must be given by either party to the other is brief,
sometimes 24 hours is all that is required.
 IC has made a number of rulings which are helpful to guide employers how to treat
probationers:
1) They should not be dismissed during his probationary period, except for
misconduct or redundancy.
2) They should be given suitable training, coaching and guidance
3) They should be monitored and appraised by immediate superior. Written
evidence of appraisal should been conducted.
4) If their performance is not satisfactory, they should be given one or more
warnings preferably in writing.
5) Probationers may be terminated at the end of probationary period if the do not
improve and reach a satisfactory performance standard. If no prior warning
given, employer need to extent the period by issue the letter explain why they
cannot confirmed in their appointment.
6) Employee will be considered still a probationer if they do not received a letter of
confirmation at the end of a probationary period.
 7) Probationers may assume their service are been confirmed by the employer once
they received certain benefits and privileges during their probationary period
that only been given to the employee once they are confirmed.

Section 20, IRA, 1967

 Under Section 20, when an employee working in private sector has been dismissed, he
has the right to challenge his employer’s action.
 Similar requirement with EA, complaint must be filed within 60 days of the dismissal at
the nearest office of IR Dept.
 Once an employee files a complaint by filling out the required form, conciliation
meeting will be held by IR Dept.
 The conciliation meeting will be presented by Conciliator, representatives of employer
and the employee who has been dismissed.
 Settlement:
o Employer reinstate employee or
o Employer negotiates a compensation package acceptable to employee. (pay
termination benefit, wages in lieu of notice of termination & wages in lieu of any
unused annual leave)

 Causes of lodge complaint under Sec. 20 are can be in varies reasons:

 Misconduct / poor performance
 Retrenched
 Resigned from his job ( employee must prove they are been forced to do so)
 Purpose for conciliation is to explore possibility of settling the dispute.
 When the disputes not settled, DGIR will inform Minister Human Resource which had
authority under the IRA 1967 to decide whether or not to refer the dispute to the IC for
arbitration.

Claims of Wrongful Dismissal at the High Court

 Public Sector employees are not within the scope of Employment Act and neither have
any right under Sec 20 IRA 1967.
 If they are dismissed, they may file claim at the High Court on the grounds the has
wrongfully dismissed.

Procedures to Claim Unfair

Dismissal
Remedies of unfair termination

 Reinstatement
o IC has authority to order the employer to reinstate the employee involved if
practical to do so.
o If the relationship between employer and employee has become very strained,
or if the employee has found himself a job elsewhere, or if the position has no
longer exists, then the Court may feel reinstatement is not the best remedy, in
which case, compensation in lieu of reinstatement will be awarded.