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1.1 INTRODUCTION
This lesson focuses on the concept of industrial relations and several relevant
aspects. It comprises four main parts. The first part describes the definition and
principles of industrial relations. The second part is about harmonious industrial
relations i.e. definition and principles. Part three consists of the types of decision
making in the industrial relations system. Part four outlines the roles and functions of
government in the industrial relations. This will help you to acquire an in-depth
understanding of this topic.





1.2 DEFINITION AND PRINCIPLES OF INDUSTRIAL
RELATIONS

Definition
Many definitions have been given to the term industrial relations. In the simplest
words it can be understood as the relationship between employees and their
employers within the work environment. The relationship also involves trade unions.
Therefore, the relationships are between employers and unionized as well as non-
unionized employees.



1.3 PRINCIPLES OF INDUSTRIAL RELATIONS
In Malaysia, the employersemployees relations (in the private sector) are governed
by the Industrial Relations Act (IRA) 1967. This Act establishes the principles on
which the relations are founded. The principles are the following:



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I. Trade Unionism
This principle states that workmen (and employers too) are entitled to basic
trade union rights such as the right to form unions, the right to join unions,
and the right to participate in the activities of unions.


II. Union Recognition
The principle explains that employee unions must be recognized by
employers as a legal or official representative before they represent
employees to bargain whether individually or collectively.


III. Collective Bargaining
This principle guides how employee unions may negotiate with employers
the terms and conditions of employment and work of workmen, and may
conclude with employers binding and enforceable written agreements
incorporating the terms and conditions agreed upon.


IV. Dispute Resolution
This is the principle that attempts to offer the effective resolution of conflicts
between disputing parties. Employers, workmen and their unions should, if
possible, be prevented through a grievance machinery or collective
bargaining, and if not, be settled through conciliation or arbitration, rather
than aggressive methods or industrial action (i.e. strikes, lockouts etc).



1.4 DEFINITIONS AND EFFECTS OF HARMONIOUS
RELATIONS

Harmonious industrial relations
Harmonious industrial relations refer to peaceful relationship between employers or
management and employees. Sometimes people use the term sound industrial
relations as harmonious industrial relations. The relation is considered harmonious


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when the number of disputes and industrial actions are minimal. The relationship is
also considered harmonious if both parties choose peaceful ways to settle the
conflict. In addition, successful dispute resolutions at the early stage also indicate the
availability of harmonious industrial relations.


Effects of harmonious industrial relations
The effects of harmonious industrial relations can be seen from three levels i.e.
national (country), industry and organisational (enterprise) level.

1. Effects On The Country
Harmonious industrial relations have effects on national productivity and
prosperity. It can ensure political stability, economic development and
social well-being among people in the country.


2. Effects On The Industry
Industries will also gain benefits from harmonious relationship. Good
industrial relations help in uninterrupted production by ensuring continuity
of production, continuous employment and full utilization of capacity. This
results in maximum production which in turn keeps income flow steady for
everyone involved in production. This also results in timely arrival of goods
at the market thus helping economy development as a whole.


3. Effects On The Organisation
The effects of harmonious industrial relations are obviously seen at the
organisational level i.e. employer and employees. By maintaining excellent
industrial relations the wastage of machines, materials and men can be
reduced. Mutual understanding and cooperation may avoid industrial
dispute that help organization to save cost. Peaceful industrial relations
makes employees feel appreciated, keeps employees moral high and
enables them to work with sincerity and enthusiasm. Sound industrial
relations reduce the numbers of industrial disputes and industrial actions.
Proper elimination of workers' dissatisfaction results in peaceful industrial
surroundings and increased production.


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1.5 TYPES OF DECISION MAKING IN THE INDUSTRIAL
RELATIONS SYSTEM

Governments, employers and employees are three players in industrial relations.
These groups may interact differently in making decisions related to work life. The
decisions can be made in any of these three ways:

I. Unilaterally
The decision is made by one party in disregard for other parties i.e. the
employers.

Decisions are made by the management on behalf of the
employer without any interference by employees or any other party. People
tend to associate this way of making decisions in the Malaysian public
sector industrial relations.


II. Bilaterally
The decision is made by two parties i.e. employers and employees. The
best example is collective bargaining practices.


III. Tripartite manner
The decision is made by three parties i.e. employers, employees and
government. Arbitration is a good example where decisions are made by
Industrial Court (government), employers and employees.



1.6 ROLES AND FUNCTIONS OF GOVERNMENT IN THE
INDUSTRIAL RELATIONS


I. Legislator
This is the role where the government legislates or enacts law through the
Parliament. Examples of legislations are the Trade Unions Act 1959 (TUA)
the Industrial Relations Act 1967 (IRA) and the Employment Act 1955 (EA).



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II. Administrator
The government performs this role through the Ministry of Human
Resources. The core activity is enforcing the above three legislations i.e.
translating written laws into actual action and taking corrective actions
when necessary.


III. Participant
This role is performed by the Minister of Human Resources in the Code of
Conduct for Industrial Harmony and the National Labor Advisory Council.
The Minister with the help of MTUC and CUEPACS formulates appropriate
industrial relations policies and promote peaceful industrial relations
policies.



IV. Employer
The federal government plays this role as the largest employer in the public
sector. People are hired to fill vacant positions available in this sector.
Salaries and benefits are provided to compensate them.


2.7 SUMMARY

The establishment of Malaysian industrial relations is based on certain principles.
The ultimate aim is to achieve peaceful relationship between employers and
employees in both sectors. In addition, government has specific roles pertinent to
ensure sound industrial relations.




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This is one of commonly ask questions for this lesson.
Explain the roles and functions of government in industrial relations. (10 marks)
1. Legislator make law
2. Administrator translate laws into actual actions and take corrective
actions
3. Participant take part in the discussion and endorsement of documents
4. Employer hire people, allocate tasks and, provide salaries and benefits





At this point you should be able:

To explain the effects of non harmonious industrial relations.

To explain the principles where private sector industrial relations are
founded.





PART A : DEFINITION

Define the following terms:
1. Legislator
2. Administrator
3. Participant
4. Government
5. Bilateral



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PART B : SHORT ANSWER

Answer the following questions:
1. Explain the impacts of harmonious industrial relations on organizations.
2. Describe the effects of non harmonious industrial relations in a country.


FEEDBACK TO ACTIVITY 1.1

Feedback to Question Sample

Explain the roles and functions of government in industrial relations. (10 marks)

I. Legislator
This is the role where the government legislates or enacts law through the
Parliament.

II. Administrator
The government enforces the labor laws through the Ministry of Human
Resources.

III. Participant
This role is performed by the Minister of Human Resources in the Code of
Conduct for Industrial Harmony and the National Labor Advisory Council.

IV. Employer
The federal government plays this role as the largest employer in the public
sector. Government hires people and provides compensation.
( 2.5 marks x 4 points with appropriate explanation = 10 marks )


FEEDBACK TO STUDY QUESTIONS

PART A : DEFINITION

1. Legislator lawmaker
2. Administrator enforcer
3. Participant member or partaker
4. Government a group of people who have the authority to govern the country
5. Bilateral the practice that involves two sides/parties


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PART B : SHORT ANSWER

1. Explain the impacts of harmonious industrial relations on organizations.

i. Can reduce wastage of machines, materials and men.

ii. Mutual understanding and cooperation may avoid industrial dispute that
help organization to save cost.

iii. Peaceful industrial relations makes employees feel appreciated, keeps
employees moral high and enables them to work with sincerity and
enthusiasm.

iv. Peaceful industrial relations reduce the numbers of industrial disputes and
industrial actions.
v. Proper elimination of workers' dissatisfaction results in peaceful industrial
surroundings and increased production.



2. Describe the effects of non harmonious industrial relations in a country.

Politics stable government administration.

Economy national productivity and prosperity, national development.

Social higher standard of living, safety and security of life are protected.

















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