EPEE3111: INDUSTRIAL RELATIONS

TRADE UNION IN MALAYSIA

6/12/2013

Prepared by: Dr. Parwazalam Abdul Rauf

Main Actors in Industrial Relations Systems

WORKERS and their ORGANIZATIONS Rules and legislations

GOVERNMENT and their AGENCIES

EMPLOYERS and their ORGANIZATIONS

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UNDERSTANDING TRADE UNION

TRADE UNIONS is . . A voluntary association of wage earners organised for further or maintain their rights and interests through collective bargaining with the employer, especially for improving wages, hours and conditions of employment.
(Websters New Collegiate Dictionary, 1956:901)

 All union must be recognized and have resources available at the workplace to act as the representative of its members.

The trade union recognition is the process by which management formally accepts one or more trade unions as the representative(s) of all, or a group, of its employees for the purpose of jointly determining terms and conditions of employment on a collective basis.
In Malaysia, a Trade Union includes: An associations / trade union registered under the T.U Act, 1959.
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However, the following group of employees are not allowed to join a trade union: Managerial capacity Executive capacity Confidential capacity Security capacity.

RIGHTS OF WORKMEN AND EMPLOYERS:

Industrial Relations Act, 1967 (Part II, 4): No person shall interfere with, restrain or coerce a workman or an employer in the exercise of his rights to form and assist in the formation of and join a trade union and to participate in its lawful activities.

UNFAIR EMPLOYER LABOR PRACTICES (U.S.)

The Wagner Act deemed statutory wrongs (but not crimes) five unfair labor practices used by employers:
1. It is unfair for employers to interfere with, restrain, or coerce employees in exercising their legally sanctioned right of self-organization. 2. Companies are prohibited from discriminating in any way against employees for their legal union activities.
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3. It is an unfair practice for company representatives to dominate or interfere with either the formation or the administration of labor unions. Among other management actions found to be unfair under practices 1 and 2 are bribing employees, using company spy systems, moving a business to avoid unionization, and blacklisting union sympathizers.
4. Employers are forbidden to discharge or discriminate against employees simply because the latter file unfair practice charges against the company. 5. Finally, it is an unfair labor practice for employers to refuse to bargain collectively with their employees duly chosen representatives.
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UNFAIR UNION LABOR PRACTICES

The Taft-Hartly Act enumerated several labor practices that unions were prohibited from engaging in: 1. Unions were banned from restraining or coercing employees from exercising their guaranteed bargaining rights. For example, some specific union actions the courts have held illegal under this provision include stating to an antiunion employee that he or she will lose his or her job once the union gains recognition; issuing patently false statements during union organizing campaigns; and making threats of reprisal against employees subpoenaed to testify against the union at NLRB hearings.
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2. It is also unfair labor practice for a union to cause an employer to discriminate in any way against an employee in order to encourage or discourage his or her membership in a union. There is one exception to this. Where a closed or union shop prevails (and union membership is therefore a prerequisite to employment), the union may demand discharge for a worker who fails to pay his or her initiation fees and dues.
3. It is an unfair labor practice for a union to refuse to bargain in good faith with the employer about wages, hours, and other employment conditions.

4. It is an unfair labor practice for a union to engage in featherbedding.

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APPLICATION FOR REGISTRATION:

Every application for registration shall be made to DGTU in the prescribed form: Signed by at least 7 members of the union (any of whom may be officers thereof), Accompanied by such fees as may be prescribed, A printed copy of the rules of the trade union signed by the members with the following particulars:
The names, occupations, address of the members making application, The name and address of the trade union, The titles, names, addresses and occupations of the officers
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The DGTU may refuse to register if:

There is in existence a trade union representing workers in that particular establishment (it is not in the interest of the workers concerned). Likely to be used for unlawful purposes or for purposes contrary to or inconsistent with its objectives and rules. Not satisfied that the trade union has complied with the Act and of the regulations. The objectives, rules, and constitution of the trade union conflict with any of the provisions of the Act. The name which the trade union is to registered is:
Identical/nearly resembles to that of any other existing trade union. Undesirable, unless the trade union alters its name to one acceptable to the DGTU.
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WHY DO WORKERS ORGANIZE?

. . The urge to unionize often boils down to the belief that it is only through unity that the workers can get their fair share of the pie and also protect themselves from the arbitrary whims of management.

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Prepared by: Dr. Parwazalam Abdul Rauf

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WHY EMPLOYEES UNIONIZE ?

Studies on successful unionization activities identifies 4 categories of reasons why employees organize. Reasons include: 1. ECONOMIC NEEDS
Dissatisfaction with wages, benefits, and working conditions appear to provide the strongest reasons for joining a union. When employees believe that their economic need is greater than they can fill in individual negotiations, then chances for successful unionization are enhanced.
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2. SOCIAL AND STATUS CONCERNS

Employees whose needs for status and recognition may join unions as means for satisfying these needs. The union becomes a conduit for fraternization and sharing feelings about the job in a safe environment. It also provides the basis for developing off-work friendships based on shared interests. Further, union service can provide opportunities to use leadership talents.

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3. DISSATISFACTION WITH MANAGEMENT

Employees cited favoritism shown by managers as major reason for joining unions. Employees may seek unionization when they perceive that managerial practices regarding promotion, transfer, shift assignment, or other job-related policies are administered in an unfair or biased manner.

4. GROUP DIFFERENCES TOWARD UNIONIZATION

In certain cases, certain groups are more unionized than the others. (i.e. trend of unionization among certain races, minorities group, locality, industries, etc.)
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Specifically, Trade Unions are organized with the following main objectives: 1. To secure the complete organization: to promote the industrial, social and intellectual interests of its members. 2. To regulate the relationship between employees and their employers, member and member, and members and other workers. 3. To promote the material, social and educational welfare. 4. To provide legal assistance to members. 5. To provide victimization pay and dispute pay. 6. To promote legislation affecting the interest of 6/12/2013 Prepared by: 17 the members. Dr. Parwazalam Abdul Rauf

7. Conduct collective bargaining with the employees with the view to concluding collective agreement. 8. To represent the employees in trade disputes with employer. 9. To represent the employees in Industrial and Labour Court. 10. To undertake such other activities as to promote social, recreational and cultural activities among its members. 11. To promote or organize any legitimate industrial action: strikes, picket, etc. subject to provision of the Trade Union Act, 1959.
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Workforce in Malaysia
1998 = 8.881 million: 8.597 employed = 96.8% employed
2000 = 9.194 million: 8.920 employed = 97.0% employed 7.72 mil. = private sector 0.98 mil = public sector Plus 1.14 mil. = legal foreign workers (Estimated 1 mil. = work illegally)
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Trade Union Density in Malaysia

In 1998: 720,000 workers belong to Trade Unions. Private sector = 400,000 (55.5%) Public sector = 320,00 (44.5%)
Union density = 720,00/8.881 mil = 8.1%

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Unionism: - An International Comparison

Singapore = 15% Philippines = 25% Japan = 35% Hong Kong = 22% Sri Lanka = 35% India = 28% Korea = 19.7% New Zealand = 31%
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Australia = 55% Canada = 35% Great Britain = 51% USA = 28% Sweden 82% Denmark = 65% Norway = 61%

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Number of Employees Union, 1965 to 1998

1965 = 286 1990 = 468 1970 = 237 1992 = 479 1975 = 252 1994 = 501 1980 = 369 1996 = 516 1985 = 369 1998 = 533

Distribution of Trade Union by Sector

Sector Private sector Civil service Statutory bodies
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1993 276 = 56% 132 = 26% 088 = 18%

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1998 314 = 59% 133 = 25% 086 = 16%

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The Density of Union Membership by Sectors, 1998

Sector Agriculture Mining No. of workers 1,401,000 42,000 Union members 55,000 1,000 % Unionized 3.9% 6.4%

Manufacturing
Construction Public sector

2,279,000
808,000 3,190,000

145,000
4,000 195,000

5.9%
0.5% 6.1%

Private sector
All sectors
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877,000
8,597,000

320,000
720,000

36.5%
8.2%
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Prepared by: Dr. Parwazalam Abdul Rauf

The largest unions by membership 1995, 1998

Name of Union National Union of the Teaching Profession 1998 76,311 1995 28,546

National Union of Plantation Workers

National Union of Bank Employees Electrical Industry Workers Union Amalgamated NU of Local Authority Employee Malay Teachers Union, Pen. Malaysia Telekom Bhd. Employees Union National Union of College Trained Teachers Metal Industry Employees Union Non metallic Mineral Prod. Mfg. Employees Union Transport Workers Union
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39,420
27,622 27,015 19,322 16,935 15,847 12,307 11,474 10,976 10,469

100,052
12,922 18,025 14,217 15,531 8,537

10,447
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New Trend: - Union-free Environment

1. Employers who adhere to certain union-free strategies and tactics can remain or become union free organization.

2. Some managers believe that the presence of a union is evidence of managements failure to treat employees fairly.
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Many factors significantly reduce the chances of unionizing, notably:

1. A conviction by employees that the boss is not taking advantage of them.

2. Employees who have pride in their work. 3. Good performance records kept by the company. Employees feel more secure on their jobs when they know their efforts are recognized and appreciated.
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4. No claims of high-handed treatment. Employees respect firm but fair discipline. 5. No claim of favoritism thats not earned through work performance.

6. Supervisors who have good relationships with subordinates.

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Some Evidence from Research Findings:

Certain similar characteristics help organizations remain union free: 1. Competitive pay and strong benefits. 2. A team environment. 3. Open communication. 4. A pleasant work environment. 5. The avoidance of layoffs.
Organization should also establish its strategy long before a union organizing attempts begin.
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Organization must borrow some of unions philosophy:

1. Management must be able and willing to offer workers equal and better conditions than workers could expect with a union.

2. Weakness in any critical area may be an open invitation to a union. 3. All aspects of an organizations operation are involved in maintaining its union-free status.
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Factors Involved in Maintaining a UnionFree Status Organization

Effective first-line supervisors Effective compensation programs Effective employee & labor relation
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Union-free policy Effective communication

Remaining Union-free

Trust and openness

Dr. Parwazalam Abdul Rauf

A healthy and safe work environment Prepared by:

Government influence
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