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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



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 perspective

In 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.


î.?  ra ist 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.? Radica 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

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.




The Department of Industrial Relations Malaysia was established on the î1'st December
197î. 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.



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.







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


To create, promote and maintain harmonious industrial relations conducive for national
development and to enhance the quality of life as a whole.


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.


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.



 ? 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.

î) 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.



1)? rocess C aims for Recognition of Trade Unions

A 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 î1 days, in any of the
following manner:

1.? Accord recognition; or

î.? Decline granting recognition and inform the union the grounds for it.

If the employer refuses to grant voluntary recognition as in (î) 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 î1 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.

î)? Faci itate co ective 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.


†)? Reso ve trade disptes

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 î: Industrial Relations Act, 1967]. Under the
Industrial Relations Act, 1967 the process of resolving trade disputes are as follows:

£? Bilateral negotiation between employer and employees.

£? Conciliation by the Industrial Relations Department.
£? 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 is
made to Industrial Court, the court will adjudicate the dispute.

´)? rocess Representations for Reinstatement

Under Section î0 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.


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

5)? rovide 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.

©)? romote Code of Condct for Indstria Harmony

The 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:


£? to refrain from taking unilateral action with regard to any industrial dispute;
£? 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;
£? to ensure that at all times all matters in dispute are dealt with by the proper machinery
established for that purpose;
£? to promote constructive and positive co-operation at all levels in industry and to abide
faithfully by the spirit of agreements mutually entered into;
£? to establish, where none exists, a procedure which will ensure a complete and speedy
investigation of grievances leading to a joint settlement;
£? to comply with the various steps in the procedure for disposal of grievances and to avoid
any arbitrary action which ignores there procedures;.
£? to refrain from resorting to coercion, intimidation, victimization and to avoid go-slow, sit
down and stay-in-strikes.




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 (î008) is 134 and the cases received until September î009 is 53 and only 59 cases
resolved and the unresolved case is 1î8.
Second is trade disputes which is the balanced from î008 is 101 and the cases received
by the Department of the Industrial Relations until September î009 is î53 and only î5î have
been resolved.
The third subject is claims for reinstatement. At î008 the cases balanced is 1î88 and the
cases received is 390î 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 î009 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 î from the
previous year. They received 30 cases at î009. 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 î009 only 86 cases received. The resolved cases is 18 and the balanced is 34.





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 î007 which are 60
cases and the lowest number of cases is in î003 which is î6. While the highest numbers of
workers involved is in î003 which is 4774. In î006 shows the lowest the workers involved
which is 1348.
Next causes are deadlock in collective bargaining. Mentioned that in î003 is the highest
numbers of cases which is 153 and the lowest is 85 in î007. Workers involved in deadlock in
collective bargaining shows the highest numbers. And the lowest is 4î54 in î006.
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 î003 which is 83 while the lowest number of cases is 55 in
î007. The highest workers involved in this cause whish are 10î0î in î003 and the lowest
workers involved are in î007 which is 3469.
Besides, another cause of trade disputes is retrenchment and layoff. In î007 shows the
highest numbers of cases which is 11 and the least number of cases is 4 in î003. The highest
worker involved in these cases is 595 in î005 and153 in î006 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 î005. While the
lowest is î3 in î004 as well as the workers involved in these cases shows the leading
numbers of workers is in î007 which is î147 and 7î9 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
î003 which is 38 cases and 1î81 workers. The lowest numbers of cases and workers
involved is in î007 which are1î cases and 9î 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 î004 which is 14 and it shares the same years of highest workers involved 1î39. The
lowest number of cases of this cause is 8 cases in î005 and similar to workers involved
which is 133 in the same year.


Then, the cause of trade disputes is infringements of worker¶s rights/unfair labor

practices. The highest numbers of cases and workers involved is in î003 which are î0 cases
and 1669 workers while the lowest number of cases is 7 in î004. The lowest workers
involved are in î007 which is î57.
Finally, the others causes mentioned that the highest number of cases are 41 in î005 and
the lowest number of cases is 16 in î007. While the highest workers involved of this causes
is in î005 which is 35î6. The least workers involved are in î003 which is 918 workers.
As a conclusion, the highest total number of cases including all of these causes of trade
disputes is in î005 which is 381and the highest workers involved including all of these
causes of trade disputes are in î005 which is 59008.





? From the schedule above it shows the trade dispute deals by the department of industrial
relation from î003 until î007. The number of the trade dispute that unresolved are higher is î004
which is 597 and the lowers unresolved cases that have been bought from the previous years is in
î007 157.

The highest numbers that have been reported to the department in industrial relations is in
î005 which is 381 cases and the lowest case î007 which is 30î cases.

The trade disputes that have been dealt are decreasing from î003 until î007 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 î006 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 î007 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.

? ?



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 employer¶s 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.