Chapter Six Collective Bargaining MALAYSIAN INDUSTRIAL RELATIONS AND EMPLOYMENT LAW Author: Maimunah Aminuddin Chapter Six Collective Bargaining Malaysian Industrial Relations & Employment Law

Malaysian Industrial Relations & Employment Law Preview Deciding on terms & conditions of service Collective bargaining Collective bargaining procedure Collective agreements Terms & conditions of service in the public sector Malaysian Industrial Relations & Employment Law

Deciding terms & conditions of service Wages and other terms & conditions of service can be decided upon: Unilaterally, by the employer Bilaterally or jointly by the employer and the representatives of employees Bilaterally, but with controls established by the state Malaysian Industrial Relations & Employment Law

Deciding terms & conditions of service, cont. 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. Malaysian Industrial Relations & Employment Law

Collective bargaining The Industrial Relations Act requires trade unions to gain recognition from each employer with whom they wish to conduct collective bargaining. The procedure by which a union may claim recognition is laid down in the Act. Malaysian Industrial Relations & Employment Law

Malaysian Industrial Relations & Employment Law Recognition process Recognition may be granted voluntarily by the employer at the request of the union. If an employer refuses to grant recognition, or does not reply to an application for recognition by a union, the union may report to the DGIR. The DGIR will verify: whether the union is competent to represent the workers concerned and what % of workers are represented by the union. Malaysian Industrial Relations & Employment Law

Collective bargaining process Collective bargaining may be conducted: At industry level whereby employer’s union and national employees’ union negotiate At company level whereby employer negotiates with national employees’ union At company level whereby employer negotiates with in-house employees’ union Malaysian Industrial Relations & Employment Law

Collective bargaining procedure Either union or employer invites the other to commence bargaining. Invitation is accompanied by draft collective agreement. Once employer agrees to bargain, representatives of both parties meet, bargain and if agreement is reached, put agreement in writing. Malaysian Industrial Relations & Employment Law

Collective bargaining procedure, cont. Prior to commencement of negotiations, both parties will: decide who shall represent them collect information about the other party’s strengths and weaknesses collect economic data get a mandate from their principals decide on strategies and tactics Malaysian Industrial Relations & Employment Law

Collective bargaining procedure, cont. If employer refuses to negotiate, or if employer and trade union can not agree on the terms and conditions of employment to be included in the collective agreement, a trade dispute exists. Malaysian Industrial Relations & Employment Law

Collective bargaining procedure, cont. Either party can report a trade dispute to the Department of Industrial Relations for the purpose of conciliation. Conciliation meetings will be held. If agreement reached between employer & union, matter is resolved. If conciliation not successful, dispute will be referred to the Industrial Court for arbitration. Malaysian Industrial Relations & Employment Law

Collective bargaining procedure, cont. When a collective bargaining dispute is referred to the Industrial Court, a hearing will be held. The Court has the power to decide upon the terms and conditions to be included in the collective agreement where the parties are unable to reach an agreement. Malaysian Industrial Relations & Employment Law

Collective agreements (CA) Collective agreements must be deposited with the Industrial Court in order to be binding on the parties. Malaysian Industrial Relations & Employment Law

Collective agreements (CA), cont. The Industrial Relations Act specifies that: A CA must be valid for a minimum of 3 years A CA must specify the parties to the agreement A CA must include procedures for modification and termination Malaysian Industrial Relations & Employment Law

Collective agreements (CA), cont. Items commonly found in CAs Recognition of the rights of each party Scope of the agreement Union rights Wages, allowances, bonus and other financial payments Benefits Procedures relating to retrenchment, promotion, and grievances Malaysian Industrial Relations & Employment Law

Public sector terms & conditions of employment Unions in the public sector do not have the right to conduct collective bargaining with the employer. Wages and other terms and conditions are set unilaterally by the government (the employer). Malaysian Industrial Relations & Employment Law

Malaysian Industrial Relations & Employment Law Review Deciding on terms & conditions of service Collective bargaining Collective bargaining procedure Collective agreements Terms & conditions of service in the public sector Malaysian Industrial Relations & Employment Law