Industrial relation practices in the private and public sector in Malaysia

Depok, November 22, 2011.

Lecture        : Associate Professor Dr Balakrishnan Parasuraman

For the introduction, Mr Balakrishnan told us if we must know what we do in the organization. The important thing in industrial relationship is about make a good top-down communication. For winning the competition in the globalization era, we must different and make a good team.

Actually industrial organization have the same theories, but different in practices in many countries. HR Managers especially must be understand about theories in industrial relationship because it can guide them to solve the problem. Industrial relationship become an important issues today because it manage about people that sometimes have different interest with organization.

Employers have believe if wage is a cost – unitarism (Taylor, 1965), but employee’s believe is wage is a design life – pluralism (Allan, 1969). So we need colaborative bargaining in industrial relationship today.  HR Managers must maintain the harmony in the organization. They must make the union understand the condition of organization. If the union can’t understand, so the organization can close the plant in the certain area. But who will be not suffer? The employee not the union.

In Malaysia, Kerajaan is a government. Kerajaan make the act and the state make the rule. Government represented by Ministry of Human Resource. 14 state have each department of labour and have branch office of department labor; The Department of Trade Union Affairs, and The Department of industrial relations.

About trade union divide by 3 categories. (1) National union that have different law in Penincular Malaysia, Sabah, and Sarawak. (2) In House Union in the corporation level. In Malaysia, national union can’t interrupt the house union, but can give recommendation to house union. House union have low bargaining position. (3) Public Sector Union, such as civil service, statutory bodies, and local.

Only 7% of the total workforce in Malaysia cover by a collective agreement. 93 % not covered in Malaysia. So there is National consultative wage consul that has the role to protect 93% of worker that not protect because minimum wage for employee in private sector only to help worker to establish. Every three year will revise CA in Malaysia, but in Indonesia it will revise every two years.

Limitation of industrial relationship in private sector is the management preogative. Domestic inquiry needed to fighting that limitation. In public sector no CA/CB. Only lower management in public sector can follow union. But upper management can’t follow union. For the closing in  this meeting, Mr Balakrishnan said if today’s problem is not about wage, but about security (k3).

Thank you sir for the inspiring meeting in our Industrial Relationship’s Class.

Best Regards, Alia Noor Anoviar.