Support for labour law and industrial relations reform in Malaysia

ILO’s Labour Law and Industrial Relations Reform Project supports the Ministry of Human Resources (Ministry) and social partners in two key areas: (i) Labour law reform; and (ii) Implementation and enforcement.

Labour law reform

Malaysia’s labour legislation that governs freedom of association (FOA), trade unions, collective bargaining and various other aspects of industrial relations dates back to the 1950s and 60s and still contains broad restrictions that
are not only contrary to Malaysia’s international obligations and international labour standards (ILS) but also impede greater economic development.

The Project is currently working with Ministry and social partners to introduce legislative and policy reforms in line with ILS. Key areas of reform include:

• lifting barriers to union registration, recognition, and collective bargaining;
• improving working conditions under the Employment Act;
• ensuring equal opportunities in the labour force; and
• curbing administrative discretion to intervene in trade disputes.

Implementation and enforcement

Labour laws that are fully implemented and enforced is a prerequisite of a strong industrial relations system. To achieve this goal, there are two important vehicles:

Labour inspection (LI)
While it is important to increase inspection resources in Malaysia, in particular the number of labour inspectors, there are other measures that can and should be taken simultaneously to ensure a strong labour inspectorate. To that end, the ILO has carried out a needs assessment of Malaysia’s LI system, and the Project is working with the Labour Departments and Department of Occupational Safety and Health (DOSH) to promote changes through a series of high impact, low cost measures.

Labour dispute resolution (LDR)
It is important that workpace disputes be prevented from escalating into major disruptive disputes and addressed at the earliest possible stage. This can be achieved through sound industrial relations and social dialogue, effective collective bargaining, conciliation, mediation and a strong Industrial Court. To this end, the project supports a series of capacity development activities and training for key actors in the LDR system. The project has also carried out a comprehensive review of the LDR system as a whole and is working with Ministry and social partners to address issues identified in the review.”