EFFECTIVE COLLECTIVE
BARGAINING &
NEGOTIATION SKILLS
DR.BALAKRISHNAN MUNIAPAN
Email: bala.hrm@gmail.com

INTRODUCTION & ICE BREAKER

INTRODUCTION & ICE BREAKER
Your Name
Your Organization
Your current understanding of
collective bargaining & negotiation &
What do you hope to achieve from
this 2 days seminar?

DR. BALAKRISHNAN MUNIAPAN
 Born and received early education in Sg Petani, Kedah.
 Holds BEcons (UKM), MSc (HRM) (Portsmouth, UK)
CIWT,(ACAP, AUST), DBA (Philippines).
 Brings over 18 years of experience from various fields such
as, manufacturing management, corporate training,
consultancy and education.
 Presented papers at seminars & international conferences in
several countries in Asia, Australia, Africa & Europe.
 Currently based in Kuching, Sarawak with an Australian
branch campus university involved in teaching & research in
HRM. Facilitates international DBA/MBA programs in OB &
HRM.

PROGRAM OBJECTIVES
 Understand the framework of industrial
relations & collective bargaining in Malaysia;
 Plan strategies & tactics for collective
bargaining & negotiation;
 Handle stressful negotiation at the bargaining
table with a positive mindset; &
 Develop the skills of an effective negotiator.

PROGRAM METHODOLOGY
 Short lectures, group discussions, presentations,
role play and case studies approach will be used to
enhance your learning experience.
 You are encouraged to discuss, contribute & share
from your own knowledge & experience on issues
related to collective bargaining, negotiation &
industrial relations.
 This is in accordance with research on adult
learning which shows that a deeper level of learning
occurs when there is active participation on the part
of the participants

GROUND RULES FOR LEARNING
Active listening (not just hearing)
Appreciate others viewpoint (diversity)
Off your mobile or in silent mode
Have fun as you LEARN

INDUSTRIAL RELATIONS
 What is Industrial Relations?
 What is Employee Relations ?

INDUSTRIAL RELATIONS
 Industrial relations (IR) is be defined as the study
of relations between employers, employees and
their trade union.
 Industrial relations is also known as employee or
labor relations.
 However, IR as a separate function in an
organization only exist when the employees are
unionized. Normally employee relations (ER) is the
term used when workers are not members of a
union.

FOCUS OF INDUSTRIAL
RELATIONS
 laws & rules which impact on the work
environment.
 terms & conditions of work.
 the process which the rules & terms are
made.
 rights of employers & employees.

MALAYSIAN INDUSTRIAL
RELATIONS SYSTEM
 Malaysian & almost all IR system are tripartite,
i.e., they are made up of three parties.
 The parties or the participants in an IR systems
are the employers, employees and the
government.
 Rules and regulations on compensation, workers'
right, discipline and the duties and performance of
employees can be made in any of 3 ways –
unilaterally, bilaterally or in a tripartite way.

MINISTRY OF HUMAN
RESOURCES
The seven departments in MHR are:-
 Department of Labor, Peninsular Malaysia
 Department of Labor, Sabah
 Department of Labor, Sarawak
 Department of Industrial Relations
 Department of Trade Unions
 Department of Occupational Safety & Health
 Department of Manpower

MINISTRY OF HUMAN
RESOURCES
Organization which are independent but
reports to the MHR are:-
 Social Security Organization.
 Employees Provident Fund.
 Human Resource Development Fund.
 Industrial Court.

INDUSTRIAL CONFLICT
 Conflict in terms of
divergence interests
between managers &
workers can be seen in
terms of the employers
wish to maximize profits
and employees want higher
wages & better terms &
conditions of service.
 Higher wages can only be
paid at the expense of
lowering profits. Thus,
wants of employees &
employees leads to
conflict.

PRACTICAL ACTIVITY

GOOD INDUSTRIAL
RELATIONS
 Good IR will lead both
parties to work for a
common goal -
increasing growth and
success of the
organization so that its
future is guaranteed &
both profits & wages
can be assured.

GOOD INDUSTRIAL
RELATIONS
 Outcomes of good IR:
 communication
 understanding & trust
 co-operation
 mutual commitment to shared objectives
 Good IR arise from managers who
believe that ‘people are the company’s
most important asset’.

PSYCHOLOGICAL CONTRACT
• Psychological contract is an unwritten agreement
that sets out what the employers expects from the
employees & what the employees expects from their
employers.
• It consists of mutual expectations & satisfaction of
needs.
• It covers a range of issues, rights & underlying
assumptions about fairness and equity.

EMPLOYEES EXPECTATIONS
• Safe & hygienic working conditions
• Job security
• Challenging work
• Fair policies & participation
• Creativity/opportunities
• Consideration/understanding
• Feedback

EMPLOYERS EXPECTATIONS
• Obedience & commitment
• Motivation & loyalty
• Not to abuse goodwill
• To uphold image of the
organization
• To accept the beliefs of the
organization

PSYCHOLOGICAL CONTRACT
 When either the employers or the
employees expectations are not met
friction, difficulties & unharmonious
relationship will occur.

PSYCHOLOGICAL CONTRACT
The extent of matches between employers &
employees expectations will influence the
organization productivity, its profitability, job
satisfaction, loyalty, etc.
Understanding and matching the
psychological contract is essential in creating
and maintaining a harmonious IR in any
organization.

PSYCHOLOGICAL CONTRACT
How do you think your organization
has meet your employee’s
expectations?
As leaders what can you do to
increase the level of job satisfactions
of your employees?

COLLECTIVE BARGAINING
 IRA 1967 defines collective bargaining as
negotiating with a view to conclusion of a
collective agreement.
 Collective agreement is an agreement in
writing concluded between an employer or a
trade union of employers on one hand, and a
trade union of workmen on the other relating to
the terms and conditions of employment and
work of workmen or concerning relations
between such parties.

COLLECTIVE BARGAINING
 For effective collective bargaining, the union
1. Must be recognized by the employer
2. Must have financial strength
3. Members must have solidarity
 Registration gives the union the legal right to
exist but recognition means employer accepts
the union as the rightful representative of his
workers.

MANAGEMENT PREROGATIVES
Section 13(3) of IRA 1967 states no trade
union of workmen may include for
proposal for collective agreement the
following matters:-
• The promotion by an employer of any
workman from a lower grade or category
to a higher grade or category;

MANAGEMENT PREROGATIVES
• The transfer by an employer of a workman
within the organization of employer’s
profession, business, trade or work,
provide that such transfer does not entail
a change to the detriment of a workman in
regard to his terms of employment;

MANAGEMENT PREROGATIVES
• Employment by an employer of any person
that he may appoint in the event of a
vacancy arising in his establishment;
• The termination by an employer of services
of a workman by reason of redundancy or
by reason of reorganization of an
employer’s profession, business, trade or
work or the criteria for such termination;

MANAGEMENT PREROGATIVES
• The dismissal and reinstatement of a
workman by an employer
• The assignment or allocation by an
employer of duties or specific tasks to a
workman that are consistent or compatible
with terms of his employment

CASE STUDY
Kassim has a MBA in HRM is offered the position of Manager – Industrial
Relations at a local manufacturing company. He does well during the
probationary period & is confirmed in his position. Soon after, the
National Union representing companies in his industry, are recognized
to represent the employees. Kassim has never worked with Unions
before and has a hard time negotiating the first CA with the mandate
given by the management. He does little to build rapport with the
Union, who start picketing outside the Company’s premises. Kassim
calls in the Police (who are his good friends), who arrest the Union
leaders for causing public disturbance . The Union had overlooked his
relationship with the local Police & did not seek a permit for picketing.
After 2 days, the Union leaders are released…now they refuse to
proceed with negotiations over the CA & are working to rule.
Production & quality suffers & employee morale falls. The MD calls for
termination of Kassim.

COLLECTIVE BARGAINING
PROCESS – 3 PHASES
1. PREPARATION FOR NEGOTIATION
 Monitoring the environment and collecting
information
 Analyzing market practice & industry norms
 Analyzing the union proposals
 Determining management’s position
 Selecting the bargaining team
 Securing top management approval

COLLECTIVE BARGAINING
PROCESS – 3 PHASES
2. FACE-TO-FACE BARGAINING
 Negotiating with the union
 Bargaining strategies
 Signing of the collective agreement

COLLECTIVE BARGAINING
PROCESS – 3 PHASES
3. ADMINISTRATIVE OF COLLECTIVE
AGREEMENT
 Briefing of all management staff
 Adjusting compensation & policies
 Ensuring compliance from management & union

PREPARATION FOR
NEGOTIATION
 Monitoring the environment & collecting
information.
 Know the employment laws
 Know the court awards
 Study the current collective agreement
 Collective agreements of other organizations
 Documentation of experiences in administration of
the agreement

PREPARATION FOR
NEGOTIATION
 Analyzing market practices & industry
norms
 Understand the economic indicators
 Learn the practices in other organizations in the
industry & surrounding geographical area
(includes salary & benefits survey)

PREPARATION FOR
NEGOTIATION
 Analyzing the
union proposals
 Compare it with
existing CA
 Various clauses
should be analyzed
in detail

PREPARATION FOR
NEGOTIATION
 Determining Management Position
 Evaluate the union demands & determine what are
the realistic clauses
 Work out the costing of each demands of the union
 Where increments are concerned, IC Award 117/82
– CPI may be used as a guide to what is reasonable

PREPARATION FOR
NEGOTIATION
 Selecting the bargaining team
 Should CEO be in the bargaining team? Why & why
not?
 Management team = 3-4 negotiator with a chief
negotiator
 What are the criteria for selection?

PREPARATION FOR
NEGOTIATION
 Securing top management approval
 Once the management negotiating team has been
appointed, they should meet out the goals &
strategy for the team
 Top management should approve the overall
bargaining goals or give a mandate to the
bargaining team, so that they have a guide to
what they can & cannot offer

FACE-TO-FACE BARGAINING
 Negotiating with the union
 What are the do’s & don’ts of bargaining?
 How to avoid deadlock?
 Signing of CA – 10 copies to Industrial Court for
cognizance within 1 month of the agreement

ADMINISTRATIVE OF COLLECTIVE
AGREEMENT
 Briefing of all management staff
 Responsibility of the management to ensure all
management staff are familiar with the new
collective agreement
 This done through meetings and training sessions

ADMINISTRATIVE OF
COLLECTIVE AGREEMENT
 Adjusting compensation policies
 What is the role of HR?
 Ensuring compliance from management &
union
 What is the role of HR?

NEGOTIATION SKILLS
 Negotiation occurs when conflict exists
between groups and both parties are
prepared to seek a resolution through
bargaining.
 Negotiation helps to develop mutually
beneficial solutions in situation of conflict.

NEGOTIATION SKILLS
 Do you consider yourself a negotiator?
 What is your strength & weaknesses as a
negotiator?
 Find out the your partner’s negotiation
strengths & weaknesses

NEGOTIATION – SELF
ASSESSMENT
Increase Your Self-Awareness:
 Assess Your Self-Esteem
 Assess Your Locus of Control
 Assess Your Negotiation Skills

FUNDAMENTALS OF NEGOTIATION
8 Pillars of Negotiation Wisdom
1. Be conscious of the difference 5. Be an active listener
between positions and 6. Be conscious of the
interests importance of the
2. Be creative relationship
3. Be fair 7. Be aware of the
BATNAs
4. Be prepared to commit
8. Enhancing negotiations
skills
The Convergence of Corporate & Human
Issues

NEGOTIATION MYTHBUSTERS
 You don’t have to be in businessman to be a good negotiator.
 Negotiating is NOT the same as fighting.
 Negotiating effectively is not a privilege of certain people.
 You don’t have to have the upper hand to negotiate effectively.
 Negotiating is not a time-wasting activity.
 Negotiating is not always the sum of clearly defined procedures or
parameters. It is the sum and substance of human give and take.

NEGOTIATION & CONFLICT
Ways of Handling Conflict
Competition Compromise
Collaboration
Accommodation
Avoidance
What is your conflict handling style?

Conflict Handling Style #1
THE TURTLE
 Key Characteristic: DENIAL
 Key Response: AVOID
 Key Aim: TO WEATHER THE STORM
 Favorite Statement: What conflict?

Conflict Handling Style #1
THE TURTLE
 Refuses to even consider the fact that a conflict
exists and would prefer that others do the same.
Because of this, he refuses to dialogue and
gather information to fix it.
 Key Strategies: Flee, avoid, deny, ignore,
withdraw, delay, hope & pray.
 Leadership Qualities: Passive & timid, tends to
spiritualize everything.

Conflict Handling Style #2
THE SHARK
 Key Characteristic: COMPETITION
 Key Response: FORCE
 Key Aim: TO WIN AT ALL COST
 Favorite Statement: It’s my way or no
way.

Conflict Handling Style #2
THE SHARK
 He is impatient with dialogue and information
gathering and would rather everyone just submits.
 Key Strategies: Compete, coerce, control, fight,
outwit, outdo.
 Leadership Qualities: Authoritarian, seeks to
maintain the status quo, feels threatened by any act
of defiance and so will quash it all the time.

Conflict Handling Style #3 THE
TEDDY BEAR
 Key Characteristic: GIVE IN
 Key Response: ACCOMODATE
 Key Aim: TO KEEP THE PEACE
 Favorite Statement: Whatever you say.

Conflict Handling Style #3
THE TEDDY BEAR
 Interested in other’s approval and would rather
others insist on their way.
 Key Strategies: Agree, give in, appease, flatter
 Leadership Qualities: Ineffective in any group
discussion because he doesn’t have a solid opinion,
could be easily swayed either way

Conflict Handling Style #4 THE
FOX
 Key Characteristic: TOLERATE
 Key Response: COMPROMISE
 Key Aim: GIVE EACH ONE A MEASURE OF
VICTORY
 Favorite Statement: Meet me half way.

Conflict Handling Style #4
THE FOX
 Tolerates the exchange of ideas but finds this
uncomfortable so he would rather bargain quickly.
 Key Strategies: Reduce the expectations and Split
the difference
 Leadership Qualities: Good negotiator, cautious
but open, urges everyone to speak out but not too
much

Conflict Handling Style #5
THE OWL
 Key Characteristic: COOPERATION
 Key Response: DIALOGUE
 Key Aim: COLLABORATION BETWEEN ALL
PARTIES
 Favorite Statement: My preference is…But
what is yours?

Conflict Handling Style #5
THE OWL
 Focuses heavily on information gathering and
always prefers collaboration over compromise.
 Key Strategies: Gather information, dialogue openly,
explore alternatives
 Leadership Qualities: Focuses on the process, open
to change & growth

High Concern for Personal Goals
SHARK: OWL:
Win-Lose Win-Win
Values goal over Values both goal
relationships & relationship
FOX: High
Low
Concern
Win some-Lose some Concern
For Values both but is For
Relationships willing to sacrifice Relationships
certain aspects of either under
certain circumstances
TURTLE: TEDDY BEAR:
Lose-Lose Lose-Win
Low concern for either Values relationships
goal or relationship Over goal
Low Concern for Personal Goals

WHICH “ANIMAL” ARE YOU ?
Turtle Shark
Teddy Bear
Fox
Owl

WHICH “ANIMAL” DO YOU HAVE IN
YOUR NEGOTIATING TEAM?
Turtle Shark
Teddy Bear
Fox
Owl

COMPLEX NEGOTIATION
ISSUES
 In your groups communicate on a
complicated negotiation issues
experienced
 Share your experience and the lessons
learnt
 Present your group discussions to others

CONFIDENCE
“Confidence, like art, never
comes from having all the
answers; it comes from
being open to all the
questions”
-- Earl Gray Stevens

TEAM ROLES &
RESPONSIBILITIES
 Lead Negotiator
 Main Speaker
 Only Member permitted to make
 Signals
 Movement
 Recorder
 Records Key Arguments
 Records Final Agreement
 Analyst
 Monitors overall team strategy
 Monitors other teams strategy
 Identifies areas of Common Ground
 Monitors Movement

TEAM CONTROL
 Discipline  Decide and Agree the
strategy early on
 Self
 Team  Always keep to the agreed
strategy
 Never interrupt the
Lead Negotiator  Negotiate through the
Leader
 Respect Silence -
NEVER Interrupt  Support one another
openly
 Portray a United Front

PERSONAL CONTROL
 Always Be
 Polite - It never reduces your argument
 Firm - Removes Perceptions of Weakness
 Calm - Facilitates Persuasion and
Compromise
 Don’t ever take things personally
 Be aware of yourself and use your
Emotional Intelligence

EMOTIONAL INTELLIGENCE
 Definition
 The capacity for recognizing our own feelings and those of
others, for motivating ourselves, and for managing emotions
well in ourselves and in our relationships
 Uses in during negotiation
 Effective and sustainable relationships
 Should not be regarded as a ‘soft’ element of negotiation but
as a critical negotiation skill
 Maximize input from personnel by treating them well
 Change of focus: Technical Skills to People Skills
 Development of relationships

ARISTOTLE CHALLENGE
“Anyone can be angry—
that is easy. But to be
angry with the right
person, to the right
degree, at the right
time, for the right
purpose, and in the
right way — that is not
easy.”

EMOTIONAL INTELLIGENCE
Self Others
Aware- Understanding Understanding
ness Yourself Others
Actions Managing Managing
Yourself Others

PERSUASION
 Persuasion is the art of finding the best
available means influence the behavior or
attitude of another person or group
 It may elicit a negative reaction from some
people who would view it as being ‘pushy’
 May end up in a win-lose situation where you
win and they lose

PERSUASION IS LIKE MAKING
A CANDLE
 Melt
 Mold
 Harden &
Ignite!

MELTING RESISTANCE
To Melt Resistance
•Be honest
•Find common ground
•Use humor carefully
•Appreciate what they are already doing
•Give realistic pros and cons
•Ask them to make your case
Try to melt resistance before meetings

HANDLING OBJECTIONS
 To handle objections raised during the
persuasion process:
 Listen to what the objection is
 Focus on the issue NOT individuals
 Think and evaluate the situation
 Act by either:
 incorporating some of the contribution
from the other person
 Presenting a rationale for why you
disagree

OBJECTIONS HANDLING
PROCESS
Listen to and
Understand what the objection is
Transition
Handle and Overcome
the Objection

PERSUASIVE BEHAVIOUR
 It is important that your behavior supports the
argument that you are putting across:
 Use a strong and enthusiastic voice
 Speak fluently and without hesitation
 Use open questions
 Use silences
 Have eye contact at least 50% of the time
 Hold eye contact for at least 5 seconds at a time

PERSONAL CONTROL
 Always Be
 Polite - It never reduces your argument
 Firm - Removes Perceptions of Weakness
 Calm - Facilitates Persuasion and
Compromise
 Don’t ever take things personally!

DEVELOPING STATIMA TO
PERSERVE
 Don’t talk too much
 Be firm
 Stake out issues that are Non-negotiable
 Don’t care too much
 Keep things moving
 Play to your advantage
 Stay Focused

ROLE PLAY – DEVELOPING
STAMINA
 Each one to determine a product or service to
sell. Obtain or sketch the product, or
describe the product or service, or
demonstrate.
 Form into teams of 2 persons –Seller &
Prospect.
 Seller will attempt to sell the product or
service; Prospect will reject the offer. Both
will use as many of the different styles learnt.

PREPARING A STRONG
BATNA
 Determining your BATNA (Best Alternative To a
Negotiated Agreement)
 Develop a list of actions you might take if no agreement is
reached
 Improve the promising ideas and convert them into practical
options
 Select the one option that seems best
 Factors to be considered
 Which alternative is most affordable and feasible?
 Which has the most impact in the shortest time?
 What are the social costs (if any)?
 Consider alternatives available to the other side

NEGOTIATING OUT-SIDE THE
BOX
 Break away from tradition
 Think “Outside the Box”
 Exercises

REASONS WHY SOME
NEGOTIATION FAILS?
Negotiations can be lost by:
Monopolization of the conversation
Lack of knowledge
Over-stated conditions
Lack of confidence
Poor emotional intelligence

NEGOTIATION SUCCESS
QUALITIES
The following are qualities that lead to
successful negotiations
– Competitiveness
– Knowledge
– Self drive & determination
– Self reliance
– Persistence
– Energy / stamina
– Positive attitude

WHAT MAKES A GOOD
NEGOTIATOR?
Good Negotiators are individuals who develop
themselves to be sensitive and allows:
– Understanding of other people
– Understanding of the organization
– Ability to manage, lead and influence
– Ability to use the most valuable resource that your
organization has –its people
– Generation of above average results in the long term

WORKSHOP – LET’S NEGOTIATE

TRADE DISPUTE
 When employers and employees or their trade
unions are unable to resolve their differences, an
industrial dispute or trade dispute may said to
exist.
 Section 2 of the Industrial Relations Act, 1967
defines a ‘trade dispute’ as follows:
“any dispute between an employer and his workmen
which is connected with the employment or non-
employment of the terms employment or conditions
of work of any such workmen”

DISPUTE RESOLUTION
 The Industrial Relations Act 1967 recognizes a number of
ways, which can be used to resolve an industrial dispute
peacefully namely direct negotiation, conciliation and
arbitration and it also identifies the techniques or agencies
involved such as grievance procedures, Department of
Industrial Relations and the Industrial Court.
 The preamble to the Act states:
“An Act to provide for regulation of the relations between
employers and workmen and heir trade unions and the
prevention and settlement of any differences or disputes
arising from their relationship and generally to deal with trade
dispute and matters arising there from”

DISPUTE RESOLUTION
 The Act also makes the resolution of trade disputes
as simple as possible. Section 30(5) of the Act
specifies,
“The Court shall act according to equity, good conscience and
substantial merits of the case without regard to
technicalities ad legal form”.
 Dato’ Gopal Sri Ram, JCA in Harris Solid State case,
stated as follows:
“Section 30(5) of the Act imposes the duty upon the Industrial
Court to have regard to the substantive merits of the case
rather than technicalities. It also requires the Industrial
Court to decide a case in accordance with equity and good
conscience. Parliament has imposed these solemn duties
upon the Industrial Court in order to give effect to the
policy of democratically elected government to dispense
social justice to the nation’s workforce”.

DISPUTE RESOLUTION
 The Act also gives wide powers to the Court to
settle a trade dispute. Section 30(6) states:
“In making its award, the Court shall not be restricted to the
specific relief claimed by the parties or to the demands
made by the parties in the course of the dispute or in the
reference to it under section 20(3) but may include in the
award any matter or thing which it thinks necessary or
expedient for the purpose of settling the trade dispute or
the reference to it under section 20(3)”

DIRECT NEGOTIATION
 Direct negotiation is the ideal method for settling a dispute is
where both employer and employee come together for
discussion until a satisfactory compromise is reached.
Voluntary negotiations are encouraged in the Industrial
Relations Act.
“Both sides must always leave their channels of communication open;
this is one of the basic requirement of a good industrial relations
that parties must adhere to” (Industrial Court Award – No.328 of
1986)
“We sense a lack of communication between the company and the union
but we do not know who is to blame for this. Like in marriage
management and employees can only be productive and look after
each other’s welfare if they have a good taking relationship”
(Industrial Court Award – No 10 of 1988)

CONCILIATION
 If however, direct negotiation between the parties reaches a
deadlock, any party to the trade dispute may report it to the
Director General of Industrial Relations (DGIR) for
conciliation.
 Alternatively, even if both parties do not report the dispute
the DGIR may in public interest take the role of conciliator.
 It must be remembered that at the conciliation stage, the
DGIR is a not empowered with any legal force and parties
concerned are not legally bound to abide by his decisions.
 On average, 70 –80% of trade disputes are settled annually
through conciliation.

CONCILIATION
“Should they (employer & employee) encounter any industrial
problem, they should seek the guidance and advice of the
Industrial Relations Division of the Ministry of Labour and
Manpower (known known as Ministry of Human Resources)
to overcome them, for in any business undertaking,
industrial peace is vital to progress and development” –
Industrial Court Award – No.4 of 1982
“The statutory function of the Director General of Industrial
Relations is to conciliate between the parties and, if he fails
to bring about a settlement, to recommend to the Minister
which cases merit reference to the Industrial Court and
which cases do not” - Industrial Court Award – No. 85 of
1987

COLLECTIVE BARGAINING IN
ACTION
Kinta Rubber Works Sdn Bhd in Ipoh & National Union of
Employees in Companies Manufacturing Rubber Products were
unable to agree on terms & conditions to be included in their
10th CA. The dispute was not settled at conciliation and was
referred to Industrial Court. At this stage, items which were
still not agreed upon included medical benefits, bonus,
retirement benefits, retrenchment benefits, allowances, salary
structure & salary adjustment. When the matter was called for
hearing at the Court in March 2006, the parties informed the
Court that they had reached an agreement on all of the
disputed items & presented their agreement for a Consent
Award.

ARBITRATION
 Where the Industrial Relations department conciliates but
there is still a deadlock, the dispute can then be referred to
the Industrial Court for arbitration
 This decision to refer to the Industrial Court may be made
by the Minister of Human Resources at the joint request in
writing of both parties or the Minister can himself refer the
dispute to the Court
 The Minister, will exercise his discretionary powers to refer
the dispute to the Industrial Court or otherwise. When a
reference is made to Industrial Court, the court will
adjudicate the dispute
 In arbitration, decisions of the Industrial Court are binding
on both parties.

DISPUTE RESOLUTION
PROCESS
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INDUSTRIAL ACTION - UNIONS
 Strike: withdrawal of labour
 Go Slow: work on rules
 Bans: refusing particular jobs or refusal to
work with certain people
 Boycott: preventing others from doing business
with the company
 Picket: preventing employees, customers &
suppliers from entering the work site
 Industrial tribunal: union seeks assistance of
an industrial tribunal eg. Industrial Relations
Department

INDUSTRIAL ACTION
 In April 2007, 120 members of the National Union of Tobacco
Workers picketed in front of JT International Tobacco Sdn
Bhd in Shah Alam, Selangor over the company’s refusal to
start negotiating a new collective agreement, the previous
one having expired in January 2006.
 In October 2006, TM Bhd workers picketed in 3 locations,
including Menara Telekom in Bangsar, Kuala Lumpur. They
were protesting the outsourcing of certain departments,
including the company’s call centres to another company.
Employees concerned had been given option papers to join
this company although the trade union was opposing the
change until such time as the terms of transfer of the
employees to the company were clarified.

CASE STUDY
Rahim is the General Secretary of N.U.C.W. and a clerk with
Ajanta Sdn Bhd in KL. On the 30th July 2003, he was to clear
all the vouchers for claims made by officers in the company.
At 10.00 a.m. he came to know that his members in Alka
Trading Co. in Kedah had gone strike over the suspension of
a storekeeper. Rahim applied for leave to go to Kedah but
the Manager, Abdul Rahman rejected his application as the
claims had to be paid off by the 31st. However Rahim felt his
responsibility was with his union members in Alka Trading
Co. and left for Kedah. He returned to work on the 4th August
2003 having settled the strike but was given a suspension
letter in which he was asked to show cause why his services
should not be terminated for having stayed away from work
without permission for more than 2 days.

CASE STUDY
Nathan called the meeting to silence. ‘Gentlemen’, he said, “it’s
time for action. We have been patient but management is
only taking advantage of us. Our union representatives have
met with the company 5 times already and there’s been
almost no progress towards signing a CA. I propose we start
to picket every day at lunch & for an hour after work until the
management come to their senses & agree to our demands.”
Kamil stood up & said, “ I second that motion. After all, we are
only asking for 1 more day annual holiday & increase in our
basic salary of RM 50.00 per month. That’s peanuts.
Workers at Golden Corporation get far more than we do.”
One by one the workers present stated agreement. They
were in the mood to call a strike but leaders from the
national union advised them to be patient.

INDUSTRIAL ACTION -
MANAGEMENT
 Lockout: employees not to enter workplace
 Injunction: civil court order to stop union from
taking industrial action
 Strike breakers: company uses non-union
labour to fill jobs of striking union members
 Employer associations: company uses
employer’s association to exert influence on
union
 Industrial tribunal: company seeks assistance
of an industrial tribunal eg. Industrial
Relations Department

LOSSES OF INDUSTRIAL
ACTION
 The union:
 loss of wages
 loss of goodwill with management
 loss of public image
 loss of security of a united employee front
 The management:
 loss of profits or market position
 loss of status with other management, board
of directors or shareholders
 loss of public image

HARMONIOUS INDUSTRIAL
RELATIONS (IR)
 IR, is essentially ‘human relations’ and understanding the
‘humane’ and ‘human’ aspect of management is the first step in
creating a harmonious IR
 The employers should adopt participative management or
participative decision-making as the authoritarian or directive
management styles is not suitable in many organizations in the
current business environment.
 Handling of employee grievance with an effective grievance
handling machinery is must to resolve disputes at the supervisory
level. A grievance is like a small fire, the earlier you put it out is
better.
 Effective HRM strategies in terms of employee selection,
induction, training and development, performance management
and appraisal, compensation management and employee
relations are essential in creating a cooperative and harmonious
IR.

CONCLUSION
You can foul up on almost anything, you will
get another chance. But, if you screw up
even a little bit on ‘people management’
(industrial relations) you are gone. That’s it.
Top performer or not.
Productivity Through People – The Missing
Link by V.T. Shanbhag (cited in Dcruz, 1999)

PROGRAM OBJECTIVES
 Understand the framework of industrial
relations & collective bargaining in Malaysia;
 Plan strategies & tactics for collective
bargaining & negotiation;
 Handle stressful negotiation at the bargaining
table with a positive mindset; &
 Develop the skills of an effective negotiator.

DR. BALAKRISHNAN MUNIAPAN
Email: bala.hrm@gmail.com
http://www.freewebs.com/balakrishnanmuniapan/