CHAPTER 7

Trade Dispute
 Chapter Overview
1. Introduction
2. Concept of industrial dispute
3. Factors contributing to industrial dispute
4. Concept of industrial actions
5. Types of industrial actions
6. Methods to resolve industrial dispute
 Learning Objectives
This chapter discusses on matters pertaining to
industrial dispute and industrial actions. Upon
completing this chapter, students should be able to
understand:
1. The concept of industrial dispute and industrial
actions
2. The factors contributing to industrial dispute
3. The types of industrial actions taken either by
the employees or the employer
4. The methods to resolve industrial dispute
 INTRODUCTION
• In this chapter, we will first discuss certain forms
or expressions of labour-management conflict
described in Part IX of the IRA, 1967, such as
trade disputes, picketing, strikes, and lockouts.
• Then, we will discuss on ways of preventing or of
settling labour-management differences or
disputes, such as direct negotiation, conciliation,
arbitration, mediation, fact-findings.
 CONCEPT OF INDUSTRIAL DISPUTE
• Any disagreement between the employer and
workman or employee which is connected
with the employment or non-employment or
the terms of employment or the conditions of
work of such workman or employee leading to
industrial action.
 FACTORS CONTRIBUTING TO
INDUSTRIAL DISPUTE
a. The failure of all grievances procedure to
conclude satisfactory result.
b. A difference of opinion as to the appropriate
terms and conditions of service for workers.
c. A difference opinion as to the interpretation
of a CA or Industrial Court Award.
d. The non-implementation of an agreement or
award.
e. The refusal of any party to commence to
accord recognition.
f. Disciplinary actions taken by the employer,
which are considered as unfair to the
employees.
 CONCEPT OF INDUSTRIAL ACTIONS
• Industrial actions are one way of resolving
trade disputes but it must be carefully
regulates the use of this rather than radical
way.
 TYPES OF INDUSTRIAL ACTIONS
Industrial Actions by Employees
A. Picketing
• An early stage towards more serious action.
• Most common form of industrial action in
Malaysia.
• Normally endeavour to be nonviolent.
• Purpose: To publicize the worker’s dispute to the
other employees who are not directly involved
and to the public.
• Aims: To put pressure on the party targeted to
meet particular demands.
• How?: By harming the business through loss of
customers and negative publicity, or by
discouraging or preventing workers from entering
the site and thereby preventing the business from
operating normally.
• The action by workers involved in a trade
dispute at or near the workplace for the
purpose of obtaining or communicating
information or persuading or inducing any
workers to work or abstain from working.
• Is done by displaying of banners with
comment on employer and management,
passers-by HON and willingness to give
information to media to publicize.
• Is generally held outside working hours
• The strict substantive and procedural
requirements relating to strikes do not apply
to picketing.
 • Must not be conducted in such manner which
results in:
a) Intimidation;
b) Obstruction to the approach to the place of work
or the exit therefrom; or
c) A breach of the peace.
• Contravention of the above is an offence under
the IRA 1967, punishable by imprisonment of a
maximum one year imprisonment term and/or a
maximum fine of RM1,000 or both.
 Penalties For Illegal Picketing
a) Cease to be members of the union
b) Not eligible to rejoin the union
c) Employer have the right to dismiss workers
B. Strike
• Often simply called a strike, is a work
stoppage caused by the mass refusal of
employees to perform work.
• Usually takes place in response to employee
grievances.
• Is broadly defined under the Malaysian Industrial Laws
as:
• “ the cessation of work by a body of workers acting in
combination, or a concerted refusal or a refusal under
a common understanding of a number of workers to
continue to work or to accept employment, and
includes any act or omission by a body of workers
acting in combination or under a common
understanding, which is intended to or does result in
any limitation, restriction, reduction or cessation of
or dilatoriness in the performance or execution of the
whole or any part of the duties connected with their
employment.”
• A strike therefore includes somewhat lesser forms
of industrial action such as “work-to rule” or “go
slow.”
• Regulating strikes although not expressly provided
for under the Malaysian Industrial Laws, only
members of a registered trade union may legally
participate in a strike.
• Strikes conducted by workers who are not
members of a registered trade union are
therefore illegal.
The law also spell out certain substantive and procedural
requirements which must be fulfilled in order for a strike to be
legal:
I. Substantive Requirements
• Strikes only be carried out for the furtherance of a trade
dispute.
• Strikes carried out by workers to express support or
solidarity for fellow workers employed by a different
employer in respect of an unrelated trade dispute known as
“secondary” or “sympathy” strikes are illegal.
• Also prohibits workers from carrying out strikes for the
furtherance of causes not connected to their employment,
such as strikes for political reasons.
A Strike Will Be Illegal When It Is Carried Out:
• During the pendency of proceedings and seven
days following the conclusion of proceedings, of a
board of inquiry appointed by the minister of
human resources to investigate any existing or
apprehended trade dispute;
• Where a trade dispute has been referred to the
Industrial Court. Once the minister exercises his
discretion to refer the trade dispute to the
industrial court, the continuance of any strike will
be rendered illegal;
• In respect of any matters covered by managerial
prerogative, i.e., matters which relate to
promotion, transfer, allocation of work,
retrenchment and termination of employment;
and
• In furtherance of a dispute over recognition by an
employer of a trade union which is being
conciliated by the DGIR and where the minister
decides against making an order for the employer
to grant compulsory recognition to the trade
union.
II. Procedural Requirements
Trade Union Procedures
• To legally go on strike, a trade union of workers
must obtain the consent by secret ballot of at
least two thirds (2/3) of its members.
• The secret ballot must contain a resolution setting
out clearly the issues leading to the proposed
strike, and describing clearly the nature of the
acts to be done, or not to be done.
• The results of the strike ballot must then be filed
with the DGTU within 14 days of it being taken.
• The DGTU has the power to verify and investigate
the results and conduct of the secret ballot, and
may declare the secret ballot to be invalid if he is
satisfied that the trade union has not fulfilled all
legal requirements.
• Where the requirements are complied with, a
mandatory waiting period of (7) seven days
“cooling off” period is to be observed before
striking can actually commence.
Essential Services
• Essential services are industries such as banking,
electricity, water, fire, port and labour, prison,
fuel, health, telegraph, transport, petroleum and
gas (both in the public and private sectors).
• Under Sec 43 IRA, workers in any essential service
intending to strike must give notice of strike to
their employer of 42 days, besides following all
other procedures.
• Upon receiving such notice of strike, the
employer must immediately report the
particulars of the notice received to the DGIR.
• This requirement for notice would allow a
“cooling-off” period and permit appropriate
action to be taken, including the minister
referring the trade dispute to the industrial
court rendering.
 Types Of Strike
Wildcat Strike
• Is a strike action taken by workers without the
authorization of their trade union officials.
• Is sometimes termed unofficial industrial action.
• An unauthorized work stoppage while a labor contract
is still in effect, or while a union is negotiating for
benefits.
• Is technically an illegal action, and employees who
participate in a wildcat strike can be dismissed without
legal repercussions from the company, workers strike
without the benefit of union protection
 Reasons to organize a wildcat strike:
1. Workers may feel that the union is not doing
enough to protect them, so they strike on
their own to force their company to pay
attention to the issue;
2. When a serious safety issue is not addressed;
or
3. When workers want to protest a dismissal
which they believe to be unfair;
1. Workers may picket to highlight the cause and
force temporary workers out; or
2. Workers may simply choose not to come to
work.
• In some cases, a wildcat strike lasts only a day,
and is held more to make a point than to decide a
major issue.
• In other instances, a wildcat strike lasts until the
perceived problem has been addressed or
corrected.
Sympathy Strike
• When one union strikes in support for another
involved in a dispute, even though the first union
has no disagreement with the employer.
• Is started by workers in one industry and
supported by workers in a separate but related
industry or profession.
• To show solidarity, with the striking employees of
another firm or another department or unit of the
same firm.
• A collective action by workers to not perform their
jobs because of a dispute with management by a
separate group of workers.
• A strike by a body of workers, not because of
grievances against their own employer, but by way of
endorsing and aiding another group of workers who
are on strike or have been locked out.
• In Malaysia general strikes and sympathy strikes are
not permitted either.
• Are also called sympathy action, secondary strikes and
secondary action.
Political Strike
• A strike in which workers have a political
objective and frequently a protest against
some government policy.
General Strike
• Is a strike action by a critical mass of the labour
force in a city, region, or country.
• Can be for political goals, economic goals, or both,
it tends to gain its momentum from the
ideological or class sympathies of the participants.
• Also characterized by participation of workers in a
multitude of workplaces, and tends to involve
entire communities.
Industrial Actions by Employer
Lock-Out
• A work stoppage in which an employer
prevents employees from working.
• An employer's decision to bar unionized
employees entry to the workplace until such
time as they accept to work on the employer's
terms and conditions or based on a lapsed
collective bargaining agreement.
• Lock-out includes the closing of a place of
employment by an employer, the suspension
of work by an employer, or a refusal by an
employer to continue to employ employees,
for the purpose of compelling the employer’s
employees, or to aid another employer in
compelling the employees of that employer,
to accept terms or conditions of employment.
"An (employer's) act of locking out; refusal of an
employer to furnish work to employees, used as a
means of coercion.“
• Purpose: To put pressure on a union by reducing
the number of members who are able to work.
• I.e. if the anticipated strike severely hampers
work of non-striking workers, the employer may
declare a lock-out until the workers end the strike.
An employer may impose a lock-out is to avoid
slowdowns or intermittent work-stoppages.
• Particularly in the United States, a lock-out occurs
when union membership rejects the company's
final offer at negotiations and offers to return to
work under the same conditions of employment
as existed under the now-expired contract.
• In such a case, the lock-out is designed to
pressure the workers into accepting the terms of
the company's last offer.
 TRADE
DISPUTES SETTLEMENT
A. Direct Negotiation
• The parties (the employer & union) involved
voluntarily meet together to resolve the problems
without any intervention from the third party.
This is the ideal method for settling the dispute
because the solution arrived at by mutual
decision.
• E.g.: Thru CB & CA (must include a grievance
procedure-method can use to settle any dispute
arising out of the implementation of the
agreement)
• Advantages:
a. quick, cheap
b. improve understanding
c. Simple way
• Disadvantages:
a. May cause deadlock / jam
b. May be dominated by employer
B. Conciliation
• The parties involved meet, the arrangements
made by the officers of Department of Industrial
Relation.
• Conciliation is process of arriving at a settlement
of a trade dispute with the help of a third, neutral
party.
• Means bringing together 2 parties involved to
resolve their problems, the officers only advised
both parties and have no authority to insist them
to accept any recommendations.
• Can be voluntarily requested by either parties
of the disputing parties or DGIR may intervene
“in the public interest” requiring the parties to
attend a conciliation meeting.
• Carried out by the Industrial Relations Officer
who will meet jointly or separately.
Conciliation Process Looks Something As
Follows:
a. Parties concerned will try to reach an
agreement through negotiation.
b. If they fail, then the Industrial Relations
Department will try to conciliate. If matter still
cannot be settled, the department will report to
the Director General.
c. The Director General will make further effort
to help the parties to reach an agreement. If
that fails, the Director General will report the
matter to the Minister of Human Resources.
d. The Minister will also attempt to get the
parties to conciliate. If he fails, he may refer the
matter to the Industrial Court for arbitration.
e. An employer who is a party to the trade
dispute may represent himself or be
represented by his duly authorized employee,
or, where he is a member of a trade union of
employers be represented by an officer or
employee of such trade union of employers
(MAPA), or, by an official of an organisation of
employers registered in Malaysia (e.g. MEF);
f. A workman who is a party to the trade dispute
may represent himself or by his trade union or
by an official of an organisation such (MTUC) g.
In any conciliation proceedings, representation
by an advocate, adviser, and consultant is not
allowed.
Refer PART V IRA.
Advantages:
a. Practical
b. Able to maintain peaceful relationship
c. More acceptable, (80%-90% of disputes settled
through this.)
Disadvantages:
• It requires capable and qualified conciliators
(persuasiveness & ability to see the facts)
a. May cause delay
b. It requires highly tolerable person
C. Arbitration
• Parties involved are forced by the law to accept
decision made by third party.
• (Industrial Court). “Arbitration is a method of
settling dispute whereby the 2 parties involved
requested 3 party compelled by law to make
decision for them”.
• Third party is given authority to settle dispute by
examining the information given by both sides
and making judgment.
• Industrial Court as an agency –refer PART VII IRA
• The Industrial Court is a tribunal whose main functions
are to hear, decide and hand down awards relating to
trade disputes referred to it directly by employers and
trade union of workmen or by the Minister.
• An Industrial Court is headed by a President and a
panel of persons representing employers and
workmen respectively.
• Under the President, there are chairmen who sit in the
Industrial Courts in various states of the country.
• The President or Chairmen are legally qualified
persons with at least 7 years experience in the legal
profession before their appointments.
In any proceedings before the Court a party may:
a. where the party is a trade union, be represented
by an officer or employee of the trade union;
b. where the party is an employer, appear himself
personally or be represented by his duly authorized
employee, or by an officer or employee of a trade
union of employers of which he is a member;
c. in dismissal cases, where the party is workman,
appear himself personally; or where he is a member
of a trade union of workmen, be represented by an
officer or employee of the trade union;
d. in dismissal cases, where the party is a trade
union, or an employer, or a workman, be
represented with the permission of the President or
the Chairman, by an advocate, or, by any official of
an organisation of employers or of workmen; (e.g.
MEF or MTUC).
Arbitration is the only way to settle dispute that
cannot find solution by themselves or with the help
of Department of IR. A decision, order or award of
the Industrial Court is conclusive and final and
cannot be challenged, appealed against, reviewed,
quashed or called in question in any court.
Advantages
a. There is a guarantee for the settlement of dispute
because arbitrators are empowered to make
decision
b. Fairness of the decision
Disadvantages
a. Time taken may be long especially when
number of cases to be handled is more.
b. Harmonious relationship between employer
and employees cannot be maintained.
D. Mediation
• It is similar to arbitration whereby the third party is
called in by the parties to the dispute to help them
find a settlement, but the mediator is not from
government (the mediator is unbiased and neutral and
respected by both parties).
• Example of mediator is politician or local leader.
• It is rare method of settling the dispute as it is not
mentioned in labor law but occasionally used and
extremely rare because it is difficult for the parties to
find suitable mediator acceptable by both parties and
may need to pay for services.
E. Fact Finding
• The IRA 1967 also provides 2 types of machinery
which can be used to settle the trade dispute.
• The machinery’s agencies are Board of Inquiry and
Committee of Investigation. Both machinery are
appointed by MOHR- Refer PART VIII, IRA.
• Both machinery’s are only investigative body &
DOES NOT take steps to settle any dispute.
• Function: To look into the causes of trade
dispute and make recommendation either to
Minister (in the case of Committee of
Investigation) or to the House of Rep in
Parliament (in the case of Board of Inquiry).
• So far there were no cases have been handled
by this machinery because government
prefers settlement of trade dispute through
Industrial Court.