Dr.

Dzulzalani Eden (FSS, UNIMAS) 2014

Dr. Dzulzalani Eden (FSS, UNIMAS) 2014
 Approaches to Industrial
Relations
Unitary Pluralistic Marxist
•Organisation as an •Organisation composed of • Privately controlled of
integrated group of people individuals with distinctive trade, industry and
characteristic means of production
•shared common values, (capitalism)
interest, & objectives •Distinct sectional groups with
different values, interest, • Profit making as an
•Managerial prerogative is objectives and leadership ultimate goal/policy.
regarded as legitimate and
rational •Managerial prerogative is • Emphasis on power
crucial but it is balanced by a differences/division
•Management by rights strong employees influence between capital and
(individual & collective) labour
•Conflict is regarded as
unnecessary/frictional •Management by consent

•Conflict is perceived as
rational and inevitable
 Unitary Pluralistic Marxist
•Trade union is regarded as • Trade union is • Trade union and CB
intrusion welcomed and become an
balanced the power established , accepted
of management and supportive
•CB and CA are mechanism
unwelcome/regarded as
anti-social mechanism • CB as means to
resolve conflict • CB as means to
counter employers’
•CB regarded as creating power
conflict
Context and Industrial
Relations
INDUSTRIAL RELATIONS
 IR & Economic Environment
 Economic recession

 Diminsihing market share due to new entrants/emerging market

 Eg. UK world trade reduced but Japan has doubled within
1960 -1990

 Liberalisation, internationalisation and globalisation of trade

 The changing structure of economic sector eg, a shift from

manufacturing to service sector.

 The introduction of new technology such as computer software

& hardware
What are the results of these changes?
• Shift from manual to non-manual work

• New work pattern, e.g. homeworking, increasing woman’s participation,

diminishing male participation.

• Self-employment

• Part-time/casual employment

How do these affect IR?

• New legislations & Self-Regulation? – Part time employment rules/law?

• New labour/employment policies, e.g.

• ‘New Deal’ policy in the UK which has maintained tight control on welfare
policy while providing supportive action i.e. skill development
• Malaysia – Unempoyment Insurance
– New Economic Model (minimum wages/retirement age)

• Growing vs. diminishing union density

• Unemployment – Safety Net

 IR & Social Environment
 Principles of individual freedom, thought and expression

 Work as an important part of life

 Superior vs. subordinate – complex division/classification among

society

 Creation of welfare state – the rich support the poor; the State
has a social repsonsibilty towards the disadvantaged society

 Rise of egalitarian society-equality

 Technological revolution and social change

 Aging population
What are the results of these changes?
• Changing attidude towards work and the organisation (employer)

• Demise (ending) of the deferential society

• Reduced individual dependence on work

• Full employment/reducing reliance on any particular employer

• Increased level of education among society

• Diminishing jobs security

How do these affect IR?

• Increase expectations: material rewards and partcipation in decision making

• New laws to protect/minimise the effect of job loss/keep knowledge workers (e.g:
Unemployment Insurance/Minimum Retirement Age Law

• Multiple employment concurrently-Issue of Contract of Service/Contract for

service

• Temporary/contract/part time- Part time rules

 IR & Political Environment
 The most difficult and complex environment facing IR

 Diferrences/shift in political ideology

What are the results of these changes?

 Differences in views
 Dealing with unemployment level
 Privatisation
 Trade unions roles
 The extent of public involvement/debate in government
policy, e.g. Tripartite institution/mechanism
 Laws in dealing with social actions-strike, picket
 Thatcher’s Government (Conservative) on power of the trade unions vs.
Labour Party
 Malaysia Government on Trade Union/Strike?
How do these affect IR?

• Individualism vs. collectivism

• Laws and policies on trade unions movement

• Labour vs. Conservative political party

• Degree of trade unions/employers’ representative in

tarpartite discussions

• European Union- emergence of new actors in IR (EC

Commission and European Parliament)
• Social democratic ideology of EU vs. ‘laissez faire’
individualism of the UK.

• EU – establishing and regulating employees’ rights

(employment protection – e.g. higher cost of firing,
unemployment benefits, e.t.c
 Concepts
and
Values in
Power and
Industrial Authority
Individualism & Relations
collectivism

Fairness and Equity vs.

Equality

Dr. Dzulzalani Eden (FSS, UNIMAS) 2014

(1) Fairness and Equity vs. Equality

 Relative and variable concept

 What is fair to us may not be percieved as fair by others

 What is percived as unequal may be judged as unfair or unequitable

 Yet, fairness and equity does not automatically imply equality

 Equality is only one of the values or beliefs used to judge fairness

 Most frequently associated with pay and dismissal, e.g;

 Dismissal without just cause and excuse (Section 20 Industrial

Relations Act 1967 (IR Act 1967)

 Minimum wages-what should be considered as a fair wage?(National

Wages Consultative Council 2011/Minimum Wages Order 2012)

 Commitment of parties on the concept of fairness will

inlfluence IR

 Fairness is not constant

(2) Power and authority

 What is power
 Force – e.g: strike, picket, lock-out is used by one party to
force the other to accept their demand.

 Ability to control one’s physical and social environment (e.g

ability to influence decision making, e.g. salary increment)

 Capacity to gain concession[e.g. Negotiating on better terms

and conditions of employment in Collective Bargaining (CB)]

 Inextricably link (difficult to separate between power and

authority)
 Authority is achieve through power and vice versa
 Intertwined (closely related)
 Employment relationship is a power/authority relationship

Sources of power Attributes Example

control or influence of
Reward Promotion
benefits/goal

Ability to inflict punitive

Coercion Warning letter
measures

Having a formal
Ligitimised role/position to regulate Manager
or direct others

having high level

Referment Union leaders
personal attributes

having superior
Professor
Expertise knowledge and
experience
 Power and IR

 Power plays an important role in IR due to collective nature of

the relationship.

 Internal vs external dimension

 Internal – control of members within group
 External - control of others/situation outside the group
 E.g: Trade Union must be able to control its members
and use that force or power to influence management.
 Authority
 A legitimate use of power
 The ‘right’ to expect and command obedience
 Applied in the process of socialisation
 Children and Parent
 Teacher and Student
 Police and the Public

 Employees should obey all the lawful and reasonable orders and
instructions from their employers (legitimised under common law)

 Managerial prerogative (employers’ rights)

 the right accorded to the management to manage their workforce
 It is a legitimate authority employers have on their employees
 Through the nature employment relationship/contract of
employment - Master and Servant
 Ligitimised by the society (through law)
 Managerial prerogative (legitimised by the law)

(a) the promotion from a lower grade or category to a higher grade or

category;

(b) the transfer within the organisation unless the transfer is detrimental
to the employee

(c) Enggagement/Employment of employees

(d) Termination by reason of redundancy/reorganisation

(e) Dismissal and reinstatement (re-employment)

(f) Assignment or allocation of duties or specific tasks

Section 13(3) Industrial Relations Act 1967

 Implications of Power & Authority to IR
Notion of Power &
Implication to IR Example (Malaysia)
Authority
• Picket/Strike must adhere to
• Use of power is • Trade union to use its
the requirement of the IR Act
unacceptable power responsibly
1967.
(wrong/bad) (without threatening or
But distrupting the society
• Trade Union should use its
• Exercise of
authority to negotiate a better
authority is • Power should be used for
terms and conditions of
accaptable meeting the society’s
employment for employees
(right/good) goal.
they represent.
• Trade Union can balance • Trade Union must be registered
the power through with the Registrar of Trade
• Loyalty conflict ( authority (ligitimised Union to be valid.
as an empoloyee entity)
vs. ‘as a • Trade Union must seek for
member of a • Members wilingness to employer’s recognition to have
trade union) act provides the key the authority to act on behalf
source of power to Trade of their members (Section 9 IR
Union Act 1967)
 Implications of Power & Authority to IR
Notion of Power &
Inmpilaction to IR
Authority
• Collective bargaining process
provides a ligitimate rights to
employees
• Rights and • Securing certain
entitlement are rights/authority to be part of
closely bound up the employment contract
(connected) with (Collective Agreement)
the exercise of
power and • Employers’ managerial power
authority (control) and authority to decide (such
as determining terms and
conditions of employment) is
subject to acceptance of the
trade union
Example (Malaysia)
Section 13 allows Trade
Unions to include in their
proposal to negotiate on the
following:
(a) provision for training to
enhance skills and
knowledge
(b) provision for an annual
review of the wage system
(c) provision for a
performance-based
remuneration system.
 (3) Individualism & collectivism
 Work/Oganisational prespective: work/task/roles are organised,
intergrated and coordinated by department to achieve
oragnisatioanal goal.

 Employees prespective: acting in group provides greater power

than acting alone (e.g. in improving terms and conditions of
employment)

 Employers prespective: it is easier to replace/remove an

indivdual than a group (e.g. employer can easily terminate an
employment of one person as opposed to group of employees.
 Individualism & collectivism & IR

 Should employers be allowed to freely deal with their employees

without any interference from Trade Unions.
e.g. in regulating the work situation

 Collective Agreement vs. Individual Contract

e.g: in determining starting salaries/increment

 Egotism vs. Fraternalism

 Egotism-Self-centred
 Fraternalism-Group-Centered
e.g. to join or not to join Trade Union
to be involved or not in strike/picket
 Individualism & collectivism &
Individual Freedom

 Individual freedom – freedom to choose and make decisions

in respect of the conduct of the individual’s life.

 Should individual be free to choose and make decision

 Once he/she is a member of a group, e.g. Trade Union
 Can employee be forced to join or not to join Union?
(Section 5 & 7 of IR Act 1967) .

‘I believe in trying to get a balance between individual freedom on the one

hand and social responsibility on the other’. ------ Chris Patten
(4) Rights and Responsibilities

Right
• ’a just or legal claim or title’ or ‘that which is due to anyone by
law, tradition or nature.
• e.g. freedom of speech; right to vote (Constitution)
• right for due inquiry (Section 14 Employment Act 1955)
• right to appeal/be represented (Principle of natural justice)

• Employers prerogative (exclusive right to manage the

organisation)
• e.g. Promotion, Employment, Restructuring e.tc. (Section 13
IR Act 1967)
Responsibility
• A duty, obligation or burden or having control over something
• Responsibility can be:
• Self-generated (perception and belief)
• Given to the individual
• Forced on the individual

• Rights & Resposibility will be easily accepted by society if it is

well balanced.

• Rights & Resposibility may potentially cause conflict

• ‘I should have the right to….’
• We allow you the right….’
e.g. Trade Union has the right to invite employers for a CB/
Employer has the right to refuse matters on
Management Prerogative to be included in CB.
 Rights and Responsibilities
• IR concerns power & authority relationship between groups at
the workplace.

• This relationship is determined by the relative power (eg.

between Manager and Subordinate; between Trade Union and
Employer)

• Hence, the existence of rights and resposibilities are strongly

tied with power & authority; e.g.
• Recognition :Trade Union’s has the authority to represent
members if they have been regognised by the Employer
(Section 9 of IR Act 1967)

• Dismissal : Although employer has the right to terminate

their employees (prerogative), employee has the right to
challenge the dismissal as unfair/unjust (Section 20 IR Act
1967).
 • Right is only meaningful if the other
• What is your right/responsibility under the law
party accepts the responsibility
• Can it be withdrawn?
e.g. Recognition –The law placed
e.g : The right to strike vs. Industrial
responsibility on employers not to
harmony/economic impact
unreasonably refused recognition.

Privilage Effectiveness
Rights and
Responsibilities
Relationship

Organisational
Justification
Success
• Can rights and responsibilities be used
• Employers have the right to manage the to legitimise (justify) actions/behaviours.
organisation-to be profitable/successful • How to balance between future
• What is the responsibility of trade unions in prosperity & member’s interest
ensuring the organisational success. • e.g : Minimum Wage
Trade Unions – RM 1,200
Employer – Profit/Cost
(5) Integrity &Trust
Integrity
• Consistency of actions and words with ethical values
• Honesty – being truthful
• Matter of Principle – keeping to personal intergrity/values/beliefs.
• Organisational demands may sometimes conflict with personal
values and beliefs (e.g. in deciding promotion; involvement in
picket/strike)

‘In matters of style, swim with the current; in matters of principle, stand like a
rock’.
Thomas Jefferson

Real integrity is doing the right thing, knowing that nobody's going to know
whether you did it or not.
Oprah Winfrey
Trust
• Established between people rather than between groups.

• Between Supervisor & Employee, Shop Steward & Member, between

negotiators (in Negotiation/Conciliation),

• Trust in employment relationship:

• ‘High-trust’ –accommodative/flexible/give and take
• ‘Low-trust’ - greater control/formal/rigid

• In IR trust is not necessarily being open and frank as each recognise

that the other will seek to maximise gain when interests and
objectives are inconsistent.
• E.g. in collective bargaining: Trade Union may seek for
maximum benefits vs. employers seeking greater profit/cost
saving –Should they be frank with each other?

• It is difficult to establish trust but easy to lose it

 Summary Proposition

‘Perceptions in IR are individual and value laden

(based on personal opinion/values): they are based
primarily on a belief of what is ‘right’ in respect of
‘fairness’ and the exercise of ‘power’ and ‘authority’

(Salamon, 2000, p. 89)