Wednesday 6 May 2015

Trade Union Movement in Malaysia (Industrial Relation)



Introduction

          Trade unions in Malaysia first emerged in the 1920s when the Communist Party of Malaya encouraged unskilled workers to unionise. There was no legislation then relating to trade unions in Malaysia. In 1940, a Trade Unions Enactment was passed in the Federated Malay States, which was extended throughout the Federation in 1946.The enactment made it necessary for all trade unions to be registered. The current legislative instruments regulating trade unions and trade union activities in Malaysia are the Trade Unions Act 1959 (TUA) and the Industrial Relations Act 1967 (IRA).The TUA regulates trade union activities; the IRA regulates employer union relations.

          All trade unions are required to register with the Director General of Trade Unions (DGTU) within one month of formation. Registration is not automatic, and the DGTU can refuse to register a trade union if it does not meet the requirements of the TUA. Both employers and employees have the right to form unions based on the same rules, but trade unions can only be unions of employees or unions of employers and not a combination of both. The same rules apply to federations of trade unions.

IS THE UNIONS MOVEMENT IN MALAYSIA FREE?

            In Malaysia, even though workers have the right to form and join trade unions (Section 5 of the Industrial Relations Act, 1967), their movements are carefully monitored and controlled under various labour legislations. Three major pieces of labour legislation—the Employment Act, 1955; the Trade Unions Act, 1959 and the Industrial Relations Act, 1967 control and regulate the activities of trade unions in Malaysia. These regulations have been amended a number of times in response to current economic and political changes with the primary objectives of encouraging harmonious industrial relations and achieving the status of an industrialized country by the year 2020.

          Trade unions can be seen as important instruments for protecting workers’ interests. Malaysia’s first Prime Minister, Tunku Abdul Rahman, declared that the growth of healthy trade unionism “is being encouraged by the Government to provide bargaining power to union members for the ultimate purpose of safeguarding their interest and well-being” (Josey, 1958: 1). Yet, former Prime Minister Dr. Mahathir had declared that trade unions were ‘superfluous’ (Mahathir, 1982:108), lacked strong involvement in national development policy (Rasiah and von Hofmann, 1998) and were ‘meek and conservative’ (Ramasamy, in Murugasu, 2000:2). With a large number of small unions, the movement is highly fragmented, based on trades, occupations, industries and establishments, and further separated on a regional basis, which are, Peninsular Malaysia, Sabah and Sarawak.

The legal and institutional environment is not favorable to the development of a strong trade union movement in Malaysia. The union movement is faced with a number of challenges, notably from neoliberal policies and changing structures of employment. Malaysian unions are generally small, fragmented and regional. This is also due to the strict requirements of the Trade Union Act 1959.The government has the absolute right to grant union registration or withhold it. At the level of the workplace legislation restricts the subjects of bargaining (transfers, promotions, layoffs, retrenchments and job assignments deemed outside its scope), and the ability of unions to strike.

Severe recessions in the mid-1980s and at the end of the 1990s have slowed the expansion of the labor movement. From 1970 to 2000, on average, the union membership growth rate showed a decreasing trend despite significant growth in the number of registered trade unions and enlargement in waged employment (Said, Zakaria and Said 2002). Malaysia followed import substitution industrialization (ISI) strategy from 1957 to 1970, which aimed to fortify infrastructure and rural sectors leaving industrialization to the private sector. During this phase, as Kuruvilla and Arudsothy (1995) affirmed, the government severely curbed the activities of trade unions so as to achieve economic growth. The peak of state involvement during the 1970s represented an attempt to achieve a greater degree of equal distribution in wealth among different ethnic groups, in particular the majority Malays (relative to ethnic Chinese and Indians) who were slightly behind in the terms of economic advancement.

          The import substitution industrialization (ISI) and export-oriented industrialization (EOI) strategies also led to rapid structural changes in the Malaysian economy that altered the composition of labour force and trade union membership. Employment rose in manufacturing and service sectors while traditional sectors such as agriculture and mining declined (Bhopal and Todd 2000). Similar trends seem to continue in view of the fact that the average percentage of employment recorded in agriculture, mining, manufacturing, construction and services for the 2000 – 2009 period.

          The government maintained a direct legal vigilance and control over the labour movement so as to curb disruptions on inflows of FDI, and to ensure steady growth and economic sustainability. Consequently, workplace industrial relations under the EOI phase was less committed to collective forms of representation and led to a gradual decline in trade union density.

          While facing the Asian economic and financial crisis in 1997, Malaysia worked aggressively, in rhetoric at least, towards a ‘knowledge-based’ economy as a course of action to achieve the status of a newly industrialized country, which necessitates sturdy industrial harmony via a tripartite labour system. The Employment Act 1955 (EA), Trade Unions Act 1959 (TUA) and the Industrial Relations Act 1967 (IRA) collectively form the basis of the industrial relations (IR) system in Malaysia. However, the Malaysian government continuously receives criticism regarding its longstanding IR and labour laws which thus far have not been revised to accommodate the current economic and workplace demands by employers (Aminuddin 2007; Anantaraman 1997; Ariffin, 1997; Arudsothy 1990; Arudsothy and Littler 1993). The Malaysian IR system has become increasingly more restrictive than pluralistic based on a system of state-employer domination, and repressive-confrontation rather than being accommodating and co-operative (Sharma 1996).

          Deficiencies in the democratization of labor legislation have, apparently, been seen to have worked against the achievement of collaborative workplace relations. Anantaraman (1997) and Suhanah (2002) argue that Malaysian labor policies since the ISI phase, encapsulated in relevant laws, menace co-operative IR as the government attempts to create a fully industrialized country by 2020. The IRA grants the director general absolute authority to determine the classifications of employees. The IRA prohibits the formation of unions in ‘pioneer industries’. Indeed the focal point of criticism in labour studies is that the director general accepted in-house unions (enterprise unions) to represent workers in the electronics sector after unremitted pressure from international bodies, but exercised arbitrary power to prevent the formation of a national trade union in the electronics sector since it embraces ‘pioneer status’ consistent with the government’s pursuit of a low-cost export-oriented.  

          The Malaysian labor laws, to some extent, seem to be more favorable to employers than unions or employees, discouraging genuine employee participation in workplace decision-making at the in-house or enterprise level. The IRA prohibits anti-trade union activity, victimization and labour discrimination practices by employers against union members and organizers, and trade unions have the constitutional rights to file charges against any misconduct with the Ministry of Human Resources or the Industrial Court. Nevertheless, Ramasamy (2000), Rasiah (1995), Jomo and Todd (1994), Aminuddin (2003, 2007) and Ramasamy and Rowley (2008) confirm that employer opposition to unionization is common in Malaysia, especially in the private sector, but the government remains neutral on this issue. In addition, the Malaysia Immigration Department strictly spells out conditions on foreign work permits in a manner that bars foreign workers from joining trade unions (Wu 2006). Jomo and Todd (1994) allege that Malaysia has relied heavily on foreign migrant labour in several industrial sectors since the 1980s, and that the government and the employers of the firms involved in those sectors mutually determined that this group of the labour force remained unorganized by preventing them from joining a relevant trade union.

Conclusion

The movement of trade has been influence by political system. There have been political factors that vary between outright antagonism towards trade unions for political reasons, on the one hand, and ambivalence and non-committal approaches, on the other, which see trade unions as marginal to questions of economic regeneration and change. These factors are extensive in Malaysia. However, within trade unions exist in terms of strategy and understanding. Structural constraints appear to have become internalized within trade unions constraining their revitalization strategies. There are real issues of visibility within the workplace. These are partly explained by the lack of systematic support offered by the legal system and employers. Yet there is a real perception gap as far as workers are concerned. In addition, there are indications that trade unions have not really thought through or developed direct and more imaginative forms of communication.

           

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