To lay down principles and guidelines to employers and workers on the
practice of industrial relations for achieving greater industrial
harmony.
COMMITMENT
The Malayan Council of Employers' Organisation as representatives of
employers generally and the Malaysian Trades Union Congress as
representatives of workers generally.
AFFIRMING their belief in the concept and
principles as enshrined in the RUKUNEGARA;
BEING CONSCIOUS of the responsibilities towards
those whom they represent as well as the society of which they are an
integral part;
RECOGNISING that industrial peace is essential for
a sound and stable economy, especially at a time of stagflation, and
that a sound and stable economy is of paramount importance for achieving
the objectives of the national development plans which are committed to
the task of creating a united, socially just, economically equitable and
progressive Malaysian nation;
HEREBY ENDORSE, with the collaboration and approval
of the Ministry of Labour and Manpower, this CODE OF CONDUCT FOR
INDUSTRIAL HARMONY and commend both employers and workers in Malaysia to
observe and comply with its Provisions, viz;
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
cooperation 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 these procedures;
to refrain from resorting to coercion,
intimidation, victimisation and to avoid go-slow, sit-down and
stay-in-strikes; and
to educate managements and workers of their
obligations to each other.
HEREBY FURTHER ENDORSE AND COMMEND the observance
and compliance by both employers and workers, of such industrial
relations practices as may be agreed, from time to time, between the
Malayan Council of Employers' Organisation as representatives of
employers generally and the Malaysian Trades Union Congress as
representatives of workers generally and accepted by the Ministry of
Labour and Manpower.
EMPLOYERS FURTHER AGREE not to support or encourage
any unfair labour practices such as:
interference with the affairs of a trade
union and the rights of workers to organise;
discrimination, restraint or coercion against
any worker because of legitimate trade union activities; and
abuse of authority in any form.
UNIONS FURTHER AGREE not to support or to encourage
unfair labour practices such as:
negligence of duty;
damage to property;
insubordination; and
interference with or disturbance to normal
work.
Dated at Kuala Lumpur, this 9th day af February,
1975.
(SGD)
------------------------
Tan Sri Senator Gan Teck Yeow
(SGD)
------------------------
Dr P. P. Narayanan
(SGD)
------------------------
Tan Sri Senator S. O. K. Ubaidulla
(SGD)
------------------------
Encik T. Narendran
(SGD)
------------------------
Encik J. F. Philips
(SGD)
------------------------
Encik S. J. H. Zaidi
(SGD)
------------------------
Encik W. Fernando
(SGD)
------------------------
Encik Yahaya b. Mohd. Ali
(SGD)
------------------------
Puan John Gurusamy
(SGD)
------------------------
Encik Zainal b. Rampak
Malayan Council of
Employers' Organisation
Malayan Trade Union Congress
(SGD)
------------------------
(DATUK LEE SAN CHOON, S.P.M.J., K.M.N)
Menteri Buruh dan Tenaga Rakyat,
Malaysia
AREAS FOR CO-OPERATION AND AGREED INDUSTRIAL RELATIONS
PRACTICES
(Under Clause 7 of the Code of Conduct for Industrial Harmony)
AREAS FOR CO-OPERATION AND AGREED
INDUSTRIAL RELATIONS PRACTICES
As employers and workers and trade unions representing them are
jointly and severally responsible for good industrial relations, the
first need is for both managements and trade unions to accept, at the
highest level, the same degree of responsibility for industrial
relations as for other functions within their respective organisations.
Good industrial relations need to be developed within the framework of
efficiency of the establishment or undertaking, and, as such, a major
objective of management must be to develop just and effective personnel
and industrial relations policies which engender the confidence of all
employees, subject to the purpose for which the establishment or
undertaking was established and its social obligation to the nation.
Equally, trade unions should ensure that the policies and practices
which they adopt are not only fair in relation to the function and
purpose for which they have been formed but also take into consideration
national interests.
Good industrial relations depend upon good
organisation of work. Management should therefore take all reasonable
steps to ensure that:
all management personnel understand their
responsibilities and what is required of them, and have the
training and authority necessary to discharge such duties and
responsibilities efficiently;
duties and responsibilities for each group of
employees are stated with clarity and simplicity in the
organisational structure;
individual employees or work-groups know what
their objectives are and are regularly kept informed of progress
made towards achieving them;
where possible, work is organised in such
manner so that the individual employee has the chance to achieve
a sense of job satisfaction.
Where a trade union has been recognised:
management should take the initiative in
seeking to establish, jointly with the trade union concerned,
effective procedures for negotiation, consultation and the
settlement of grievances and disputes;
management and the trade union should take
all reasonable steps to ensure that both management's and
union's personnel observe agreements reached and use agreed
procedures; and
management should not discourage employees
from joining the recognised union and from taking an active part
in its legitimate activities.
The Supervisor is management's first
"contact" man with the employees and special attention should
be given to his appointment and his needs on the job. The employer
should ensure that he:
is technically proficient and adequately
trained and possesses the personal qualities required to
exercise supervision;
has charge of a work-group of a size that he
can supervise effectively;
is an effective link in the interchange of
information and views between senior management and members of
his work-group;
is briefed about innovations and changes
before they occur so that he can explain management's policies
and intentions to his work-group.
At National or Industry Level:
Employers' association should, inter alia:
co-operate with the trade unions in
establishing effective procedures at industry or national level
for the negotiation of terms and conditions of employment and
for the settlement of disputes;
encourage the establishment of effective
procedures among member organisations for the settlement of
grievances and disputes at the level of the establishment or
undertaking;
take all reasonable steps to ensure that member
organisations observe agreements and agreed procedures;
collect, analyse and distribute information to
its members concerning industrial relations matters;
identify trends and new developments in
industrial relations and help its members to anticipate and keep
abreast of change; and
provide an efficient and realistic advisory
service to its members on all matters of industrial relations.
A trade union can promote the interests of its
members effectively only if it accepts, that, in common with management,
it has an interest in and a responsibility for the success of the
undertaking and for the national, economic and social well-being of the
country as a whole. This involves co-operation with employers in
promoting efficiency and good industrial relations.
To secure these aims, a trade union should:
co-operate with employers' association in
establishing effective procedures at industry level for the
negotiation of terms and conditions of employment and for the
settlement of disputes that arise;
co-operate with individual management in
establishing effective procedures for negotiation, consultation,
communication and the settlement of grievances and disputes;
take all reasonable steps to ensure that
their officials, and members observe agreements and use agreed
procedures; and
make full use of the established procedures
for the settlement of disputes.
To ensure that its organisation is effective, a
trade union should also:
have enough officials, full-time or
otherwise, to maintain regular contacts not only with union
members but also with managements of establishments or
undertakings where the union has been recognised;
maintain a communications system which
secures the interchange of information and views between
different levels in the union and ensures that members are
systematically and regularly kept informed, factually and
objectively, of the progress of negotiations for a collective
agreement;
encourage its members to attend union
meetings and to participate fully in union activities by holding
branch meetings at times and places convenient to the majority;
and, where there is a large enough membership, consider forming
the branch organisation on the establishment; and
establish effective procedures for the
settlement of disputes among members of the union.
The trade union should also ensure that all its
officials:
clearly know and understand the nature and
extent of their responsibilities and authority;
are adequately trained to look after members'
interests in a responsible and efficient way;
wherever possible and practicable regular
dialogue is held with officials of employers' association and
its members.
As the basic relationship between an employer and
the individual employee is defined in the individual contract of
employment, it should be expressed in clear and precise language. It is
the employee's responsibility to satisfy himself that he understands the
terms of his contract and to abide by them.
The employer and the trade union concerned, if
applicable, should ensure that procedures for dealing with questions
that arise on the individual contract of employment are clearly laid
down. But it is the responsibility of the employee himself to:
A sound employment policy is a prerequisite to good employer-employee
relations. It should also reflect Government's policy requirements as
are announced from time to time. Good planning and efficient use of
manpower are important both for the success of the establishment or
undertaking and for the security of those employed in it. The employer
should, therefore, inter alia,
keep fluctuations in manpower requirements to
a minimum by means of advance planning;
make changes, wherever necessary, with as
little disruption as is necessary; and
where practicable, maintain, in consultation
with the employees or their representatives or trade union, as
appropriate, a scheme for transferring employees from one job to
another within the establishment or undertaking so that
unavoidable changes in manpower requirements can be handled
smoothly.
Recruitment
Recruitment and selection policy can help good industrial relations
by ensuring that workers are engaged for jobs suited to their abilities.
The employer should, therefore:
define the qualifications and experience
needed for the vacant job;
ensure that selection is based on suitability
for the job;
consider filling the vacancy by transfer or
promotion before trying to recruit from outside;
explain the terms and conditions of
employment to applicants before they are engaged; and
ensure that those who carry out recruitment
and selection are competent to do so and that the recruitment
and selection methods are regularly checked to be effective.
Training
Adequately trained employees are essential for the success of the
undertaking. Training appropriate to his work also helps the individual
to develop his potential, to increase the satisfaction he finds in his
work and to improve his earning capacity.
Newly recruited employees should be given initial
instruction covering:
the organisation, its employment policy and
welfare and social facilities that are available; and
specific training in the job to supplement
previous training and experience.
Younger persons entering employment for the first
time should be given broader basic instructions covering a general
introduction to working life.
In appropriate cases, further training should he
provided when there is a significant change in the content of the job or
in the level of the job being performed.
Payment System
Although payment systems vary according to the nature and
organisation of the work, local conditions and other factors, the
following principles should be observed so as to ensure that the system
of payment is soundly based and thereby reduces the incidence of
disputes arising there from:
payment systems should be as simple as
possible;
differences in rates should be related to the
requirements of the job which should, wherever possible, be
assessed by agreed or well established methods;
piece-work rates, incentive bonuses, etc. should
be determined by agreed or well established methods; and
rates of payment should be jointly negotiated
where a recognised trade union exists.
Security of Employment
Insecurity of employment and fear of the consequences of redundancy
and retirement have a major influence on attitudes to work and good
industrial relations. Consistent with the efficiency and success of the
undertaking, the employer should provide greatest possible stability in
terms of job tenure. The employer should also, where practicable:
offer prospects for advancement and promotion
within the undertaking with opportunities for any necessary
training; and
provide retirement, retrenchment and sick pay
schemes to supplement statutory provisions.
Redundancy and Retrenchment
In circumstances where redundancy is likely an employer should, in
consultation with his employees' representatives or their trade union,
as appropriate, and in consultation with the Ministry of Labour and
Manpower, take positive steps to avert minimise reductions of workforce
by the adoption of appropriate measures such as:
limitation on recruitment;
restriction of overtime work;
restriction of work on weekly day of rest;
reduction in number of shifts or days worked
a week;
reduction in the number of hours of work; and
re-training and/ or transfer to other
department/work.
The ultimate responsibility for deciding on the
size of the workforce must rest with the employer, but, before any
decision on reduction is taken there should be consultation with the
workers or their trade union representatives on the reduction.
If retrenchment becomes necessary,
despite having taken appropriate measures, the employer should
take the following measures:
giving as early a warning, as practicable, to
the workers concerned;
introducing schemes for voluntary
retrenchment and retirement and for payment of redundancy and
retirement benefits;
retiring workers who are beyond their normal
retiring age;
assisting in co-operation with the Ministry
of Labour and Manpower, the workers to find work outside the
undertaking;
spreading termination of employment over a
longer period;
ensuring that no such announcement is made
before the workers and their representatives or trade union have
been informed.
The employer should select employees to be
retrenched in accordance with an objective criteria. Such
criteria, which should have been worked out in advance with the
employees' representatives or trade union, as appropriate, may
include:
need for the efficient operation of the
establishment or undertaking;
ability, experience, skill and occupational
qualifications of individual workers required by the
establishment or undertaking under (i);
consideration for length of service and status
(non-citizens, casual, temporary, permanent);
age;
family situation; and
such other criteria as may be formulated in the context of
national policies.
Employees who are retrenched should be given
priority of engagement/re-engagement, as far as is possible, by the
employer when he engages workers.
The appropriate measures and objective criteria
should comprise part of the establishments or undertaking's employment
policy.
Working Conditions
Good physical working conditions help to achieve good industrial
relations. The first need is for the employer to ensure that the
standards laid down by law are fully complied with. But this is not
enough by itself, for most work-places could be made safer, healthier
and more pleasant to work in if more care were taken about the working
environment-like improving the cleanliness, tidiness and general
appearance of the work-place; like reducing strain and monotony involved
in the work; like encouraging workers and their representatives to
co-operate in improving working conditions and providing for
consultation with workers or their representatives on these matters.
Workers or their trade union representatives should co-operate with
employers in making the best use of the arrangements for consultation in
this field.
Claims for recognition should, as far as possible, be settled
voluntarily between the parties. Where there is doubt whether the union
concerned is the proper union under the law to represent the employees
or about its representative position the services of the Ministry of
Labour and Manpower should be sought to resolve the matter without
delay.
Where a trade union has not secured recognition
from the employer for negotiating rights, the employer should
nevertheless be prepared to consider receiving representations from the
union on behalf of its members about grievances or other matters, which
can be settled on an individual basis.
Where Recognition has been
accorded
Where a trade union has secured recognition the employer and the
union should establish effective procedures for negotiation. To enhance
the smooth and efficient functioning of such procedures the employer
should make available to the union, where possible, reasonable
facilities to enable the union to keep in touch with its members and to
represent them effectively.
Senior management personnel should also maintain
regular contacts with officials of the trade union. Similarly, the
principal officials of the trade union should also keep in touch with
members of the senior management of the undertaking or establishment.
Contact should not be left until trouble occurs. Management should
ensure that there is a close rapport and a continuing dialogue with the
trade union and its officials.
Negotiating Procedures
Negotiation of collective agreement should be as simple as possible
and, with this in mind, the employer and the union should establish
agreed procedures which may be formal.
It is desirable that respective employers'
associations and trade unions negotiate certain matters at industry
level, including:
those conditions of employment which can be
effectively applied throughout the industry uniformly;
general guidelines for the negotiation of
matters which cannot be decided satisfactorily at industry
level; and
a procedure for settling disputes, either for
the industry as a whole or as a model for adoption at the level
of the undertaking or establishment.
Collective Agreements
Collective agreements deal with matters of procedures and matters of
substance, and may cover both in a single document or deal with them
separately. In either case there should be provision for regular review
for ensuring that the procedural provisions have not become out of date.
The procedural provisions should set out the
formal constitution of joint negotiating bodies and should also cover:
the matters to be negotiated and the level at
which bargaining should take place;
the arrangements for negotiating substantive
agreements on terms and conditions of employment, including the
period for which the agreements are to run and the arrangements
under which either party can terminate and re-negotiate an
agreement;
the procedures for settling collective
disputes and individual grievances;
the procedures regarding redundancy and
temporary lay-offs, discipline and dismissal.
The substantive provisions should cover:
wages and salaries, overtime rates, bonuses
where applicable, piece-work and other systems of calculating
earnings in relation to performance; and
hours of work; provisions for overtime work
and shift working; holiday entitlement and pay.
The agreements may also cover such matters as:
fringe benefits such as sick pay, pensions
and guaranteed pay schemes;
work study and other techniques for
determining levels of performance and productivity and job
grading such as method study, work measurement and job
evaluation;
the deduction by management of trade union
subscriptions etc. from employees' wages; and
the facilities for trade union activities in
the establishment.
Procedure for Resolving
Collective Dispute
A procedure for settling collective dispute should:
be in writing and agreed between the employer
and the trade union concerned;
define the appropriate levels for raising and
settling different types of issues; and
prescribe time limits within which issues
should normally be settled or else taken to the next stage of
the procedure.
The procedure should incorporate the following:
workers' representatives should raise the issue
in dispute with employer at the level directly concerned;
Failing settlement it should be referred to a
higher level within the establishment;
if still unresolved the issue should, where
appropriate, be referred to the employers' association and the
trade union concerned and dealt with in accordance with the
industry-wide dispute-procedure agreed between them; and
if still unresolved, it should be referred to
the Ministry of Labour and Manpower for conciliation/
arbitration.
Procedure for Resolving
Individual Grievance
Effective procedure should exist for a worker to seek redress for his
grievance. Such procedure shall be established in consultation with the
worker's representatives or trade union, as appropriate.
The aim of the procedure should be to settle the
grievance as near as possible to the point of origin and should,
therefore, operate as follows:
the employee should first discuss the
grievance with his immediate superior, accompanied if he so
wishes by his union representatives; and
if he fails to get satisfaction, he should
make use of the agreed appeals procedure.
The appeals procedure should:
be in writing;
be made known to each employee;
be as simple and rapid as possible, with
prescribed time limits for each stage:
set out a procedure for appeal at more than
one level wherever practicable;
require a recording of the outcome of each
stage of the procedure, for reference to the next stage and
where possible this should be in the form of an agreed statement
in writing; and
give the worker the right to be represented
by his representative trade union official.
Procedure for Disciplinary Action
An employer should ensure that a fair, effective and expeditious
procedure exists for dealing with disciplinary matters. Such procedure
may be established in consultation with the employees' representatives
or trade union as appropriate. The employer should define and make known
to each employee the rules of work and the disciplinary action which may
follow if they are broken. Penalties should be graduated according to
the seriousness of the offence. An employee should not, except in cases
of gross misconduct, be dismissed for a first offence.
The disciplinary procedure should be in writing
and be made known to each employee. The proceedings should be conducted
in accordance with the rules of natural justice and should:
provide for the employee to be informed, in
writing, of the misconduct;
specify who has the authority to take what
forms of disciplinary action;
provide for full and speedy consideration by
employer of all the relevant facts;
give the worker the opportunity to state his
case and the right to be represented by his workers'
representative or trade union official;
in the case of less serious offences,
provide, in the first instance, for a warning by the employee's
immediate superior;
in the case of more serious offences, provide
for a formal warning in writing, setting out the circumstances
and the disciplinary action to which an employee will be liable
if he commits a further offence and require a copy of this
record to be given to the employee and if he so wishes to his
employees' representative or trade union official; and
provide for a right of appeal against
disciplinary action to a higher level of management not
previously involved.
Good employer-employee relations are dependent upon efficiency.
Employees' efficiency may be enhanced if:
they are kept informed on matters which
concern them; and
their views are sought on existing practices and
on proposed changes, which would affect them.
The employer has an important role in this and, in
particular, he should:
ensure that management personnel regard it as
one of their principal duties to explain to those responsible to
them plans and intentions which will affect them
(It is of great importance that this chain of communication
should be effective down to each supervisor and through him to
each individual employee);
encourage management personnel to give
employees a sense of personal involvement by providing adequate
opportunities for them to discuss matters affecting their job
and work environment; andī
ensure that arrangements for consultation
with workers or their representatives are adequate and are fully
used.
Management should ensure that
each employee is given full information about his rights and
obligations. This should include information on:
his terms and conditions of employment;
agreements with trade unions which affect
him;
what is required of him in his job and to
whom he is directly responsible;
procedures for making suggestions or taking
up grievances and to whom he can go for help or advice on
personnel problems;
opportunities for promotion and ar training
which is necessary to achieve it; and
safety rules.
The employer should regularly provide employees
with as much information as possible o matters affecting them. This
should include information on:
the performance and prospects of tb
undertaking;
organisational and management change which
affect employees; and
organisational and management change which
affect employees; and
Methods of communication and consultation should
suit the particular circumstances within th undertaking. The most
important method is b word of mouth through regular personal contac
between managers and employees at all levels. This could be supplemented
by:
written information provided through notice
board, house journals, handbooks, etc;
training, particularly induction courses for
newly recruited employees;
regular consultation between managers and
other means established for the purpose; and
meetings arranged for special purposes.
Joint Consultation and Works
Committee
Consultation between employer and employees or their trade union
representatives at the floor level would be useful in all establishments
or undertakings, whatever their size.
The employer should take the initiative in setting
up and maintaining regular consultative arrangements best suited to the
circumstances of the establishment in co-operation with employees'
representatives and the trade union concerned.
As far as is practicable every establishment or
undertaking should have a recognised machinery for consultation through
the establishment of a works committee comprising employer's and
employees' representatives at floor-level. The employer's and the
employees' representatives or trade union should agree to:
a formal constitution which sets out the
Committee's aims and functions, its composition and that of
sub-committees, if any, arrangements for the election of
representatives and rules of procedure;
enable the committee to discuss the widest
possible range of subjects of concern to employees, paying
particular attention to matters closely associated with the work
situation;
ensure that all members of the committee have
enough information to enable them to participate effectively in
committee business, and that the committee is used as a medium
for a genuine exchange of views and not merely as a channel for
passing information on decisions already taken; and
make arrangements to keep all employees
informed about the committee's discussions.
Dated at Kuala Lumpur, this 9th day af February,
1975.
