TRADE DISPUTETRADE DISPUTE

DCE 5634DCE 5634

INDUSTRIAL RELATIONINDUSTRIAL RELATION

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INTRODUCTION

* DIFFERENCES OCCUR BETWEEN EMPLOYERS AND EMPLOYEE OR THEIR TRADE UNIONS

* INDUSTRIAL ACTION- Employee picketting @ strike - Employer ‘lock-out’

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CLASSIFICATION OF TRADE DISPUTES

•Organising disputes•Recognition disputes•Refusal to bargain disputes•Bad faith bargaining disputes•Negotiation disputes•Interpretation disputes•Breach of contract disputes•Individual disputes

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TRADE DISPUTE AND INDUSTRIAL ACTION

DEFINITIONS

(I) Trade Dispute(II) Strike(III) Picketing(IV) Lock-out

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(I)Trade Dispute

“Any dispute between an employer and his workmen which is connected with the employment or the non-employment or the terms of employment or the conditions of work of any such workmen”.(Industrial Relation Act, 1967, Section (2))

Trade dispute is; (1)  between an employer and number of his employees and; (2)  over the employment or the non-employment or the terms of employment or the conditions of work any such employees.

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(II) Strike

The cessation of work by a body workmen acting in combination or a concerted refusal under a common understanding of a number of workmen to continue to work or to accept employment, and includes any act or omission by a body of workmen acting in combination or under a common understanding which is intended to or does result in any limitation, restriction, reduction, cessation of or dilatoriness in the performance or execution of the whole or any part of the duties connected with their employment. (Industrial Relation Act, 1967, Section (2))

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“as a concerted work stoppage by a group of workers lasting at least one full day.(Annual Report of the Department of Industrial Relations of the Ministry of labour)

The strike is the ultimate and most favored form of collective action, in that by stopping work and leaving the workplace, the employees clearly demonstrate both the importance of the issue in dispute and their solidarity.

“temporary withdrawal of labour and stoppage of work”

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Types and Causes of Strikes(i) Strikes related to collective bargaining-1.refusal to enter collective bargaining-2.deadlock in collective bargaining(ii) Strikes not related to collective bargaining-1.terms and conditions of contractual terms in collective agreement and other service contracts.-2.retrenchment and lay-off-3.promotion, allocation of duties, transfer, and other management prerogatives.-4.demotion, suspension, warning letter, and other

discipline actions.-5.non-implementation of labor standards and statutory provisions related to other non-monetary benefits. -6.infringements of workers’ right/unfair labor practices-others

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Strike Patterns

3 main indicators- to access strike activity:

Number of stoppages.

2. Number of workers involved -includes those actually on strike and those prevented from working at least for one work-day during the work stoppage.

Number of working days lost. -based on the number of vacancies-during each day of the dispute.

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Number of Strikes, Workers involved and working-Days Lost 1991-2000

Year Number of No. of workers No. of working-

strikes involved days lost 1991 23 4,207 6,110 1992 17 6,110 16,164 1993 18 2,399 7,162 1994 15 2,289 5,675 1995 13 1,748 4,884 1996 9 995 2,553 1997 5 812 2,396 1998 12 1,778 2,685 1999 11 3,452 10,555 2000 11 2,969 6,068Source:Department of Industrial Relations, Ministry of Human

Resources, Malaysia.

Strike By Sector 1995-2000Sector No. of No. of

cases workers involved Agriculture, Forestry, Livestock, And Fishery 18 2,473Mining ad quarrying 1 37Manufacturing 31 7,630 Electricity, gas and Water - -Construction 4 1,061Wholesale & Retail Trade, Restaurant and HotelFinance, Insurance, Real Estate & Business 1 29 Community, Social & Personal Services - -Transport, Storage and Communication 6 524Total 61 11 754

Source:Department of Industrial Relations, Ministry of Human Resources, Malaysia.

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Two Possible Reasons

(i) Location of workers in society.

(ii)Characteristics of the job and worker.

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(III) Picketing

“a gathering of workers outside the workplace or place of dispute with placards and banners expressing workers’ grievances and demands for people to see, thus generating public sympathy and support”. (Aminuddin,1990)

-lawful weapons of workers. (i) simple-picket in the workers’ own time, (ii) no disruption of the business of the employer, (iii) no offence committed in the course of the picket.

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-Objectives(i) To persuade other employees to join or otherwise support the strike.(ii) To withhold supplies or alternative labor from the employer.(iii) To ensure that the strikers do not return to work before the dispute is settled.

-Picketing usually (I) very peaceful (ii) does not pose any threat to the employer, or the place of employment. (iii) does not cause any serious inconvenience to the general public

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(IV) Lock-out (a) The closing of a place of employment; (b) The suspension of work; or(c)  The refusal by an employer to continue to employ any number of workmen employed by him.

in consequence of a dispute which is "done with a view to compelling persons employed by the employer . . . to accept terms or conditions of or affecting employment“(Industrial Relation Act, 1967, Section (2))

“The exclusion from work by employers of employees engaged in labour controversies”(M.N.Dcruz, 2001)

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STRIKES INTERNATIONAL SCENARIO

Strikes occur early in the development of a country’s industrial economy and during periods of improving business activity

Strikes are universal in their intent

Methods of conflict resolution tend to universally rely on some form of mediation, conciliation, arbitration, and/or adjudication

Most countries use one or more of these approaches as either a means of preventing or resolving industrial action.

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Countries vary in their definitions of strikes and methods of compiling data and international comparisons also concern the structure of employment.

Strikes are measured in three dimensions: the number of separate disputes, the number of workers going on strike, and the total number of working days ‘lost’. The overall ‘shape’ of strikes can be measured by calculating from the three raw indices the frequency of strikes (number per 1000 employees) and their average size and duration. The product of these gives the overall ‘volume’ or number of days lost per 1000 workers.

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The level of unemployment was, at least until mid 1970s, directly and not inversely related to strike levels in some countries, notably Belgium, The Netherlands and Sweden.

Germany, Sweden and Belgium, unions do not rely on the business cycle for their bargaining power but instead engage in industry- or national level negotiations that contain strikes during booms. It thus appears that not only the level of strikes but also the trend over time varies according to national structures.

Short-term economic conditions, longer-term changes in the composition of the labor force have been seen as causes of changing strike levels.

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IR Act 1967 (S40): Picketing

(1) Allows controlled picketing, whereby the picketing must be in furtherance of a trade dispute

and solely for the purpose of:* Obtaining or communicating information, * Persuading or inducing any workman to

work or abstain from working. Intimidation, obstruction of approach thereto or

egress therefrom (to obstruct the entrance or exit to the organization), and acts leading to breach of peace is punishable by law.

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Picketing Legal limitations imposed on picketing (Wu

Min Aun, 1982) includes:* words used* locality (picketing is allowed at or near the place, and

not ‘in’ the place)

* purpose * form (can not intimidate any person)

* manner (can not obstruct the entrance or exit to the organization)

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IR Act 1967 (S40): Picketing

(2) Any officer or employees of the TU involved may be present at the picketing, but solely for the purpose of maintaining good order and discipline and ensuring that the picketing workmen comply with the law

relating to picketing.

(3) Any person who contravenes the legal restraints imposed on picketing is liable, on conviction, to imprisonment for a term not exceeding 1 year, or to a fine not exceeding RM1,000, or both.

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The rights to strike in Malaysia

IR laws do not clearly lay out the procedures to be followed to ensure the legality of a strike. However, various requirements and restrictions are found in the TU Act and IR Act.

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TU Act 1959 (S25): Strikes and Lock-outs

No trade union workmen shall call for a strike:

* Without first obtaining the consent by secret ballot of at least 2/3 of its total members.

* Before the expiry of 7 days after submitting to the DGIR.

* In respect of matter covered by direction or decision of the Minister given or made in appeal to him under the Act.

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IR Act 1967 (S43): Restrictions on strike and lock-outs in essential services Prohibits any workman in any essential service

to go on a strike:

* Without giving to the employer notice of strike, within 42 days before striking,

* Within 21 days of giving such notice,

* Before the expiry of the date of strike specified in the notice

Employers in essential service are also governed by the same conditions in regards to a lock-out.

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IR Act 1967 - Schedule (pg 47)

Essential Services(Section 2)

* Banking services* Electricity services* Fire services* Postal services* Prison services* Public health services* Telegraph, telephone and telecommunication

services* etc.

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IR Act 1967 (S44): Prohibition of Strikes and Lock-outs

Prohibits strikes and lock-outs under these conditions:

* During the pendency of the proceedings of a Board of Inquiry appointed by the Minister.

* After a trade dispute has been referred to the Court.

* In respect of any of the matters covered by a collective agreement.

* In respect of any of the matters covered under S13 (3) e. g. promotion, transfer, employment, termination, dismissal, and assignment.

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IR Act 1967 (S45): Illegal Strikes and Lock-outs

A strike or a lock-out shall be deemed to be illegal if:

* The motives behind the strike or lock-out are other than the furtherance of a trade dispute. However,

* A lock-out declared on consequence of an illegal strike or a strike declared in consequences of an illegal lock-out, is not illegal.

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IR Act 1967 (S46): Penalty for Illegal strikes and lock-outs

Imposes a penalty in the form of imprisonment for a term not exceeding 1 year or to a fine not exceeding RM1,000 or to both, to any workmen or employer who commences, continues or otherwise acts in furtherance of an illegal strike or lock-out.

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In the context of present Malaysian industrial law, there leaves no room for a justifiable strike.

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Settlement of Trade Dispute

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Methods available for settling disputes .       Direct negotiation      Fact-finding Machinery     final-offer Arbitration      Conciliation      Mediation     Arbitration 

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Direct negotiation  Direct negotiation is certainly one of the ideal methods   Negotiation can also defined as the process of discussing a matter with a view to reaching agreement.  A negotiated settlement is seen as a mature and harmonious   Initially, negotiation can be envisaged as the two parties stating their relevant positions and, as the process takes place, moving towards a more central position where agreement is possible. A simple illustration of this is frequently seen in wage negotiations

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The process of negotiating contains the following steps:

1)      Preparation 2)      Argument 3)      Movement 4)      Close 5)      Agreement 

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The primacy of voluntary and direct negotiation is reflected in a number of ways:

     a)  There is a general belief among all the parties, including the government that conciliation or arbitration should not be used

until the normal, jointly agreed negotiating and disputes procedures in the organization or industry have been implemented.  b) Have the third party intervention is invoked there is a clear

preference among management and unions for conciliation rather than arbitration and there is no automatic resort to arbitration or conciliation fails. 

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c) While in the majority of cases where arbitration does take place it is invoked by a joint request from the two parties. Thus, arbitration may be used not to provide the final settlement but rather to provide a fresh basis for further negotiation. 

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Fact-finding Machinery

The Industrial Relations Act allows the Minister of Human Resources to appoint a committee of investigation or a board of inquiry where a trade dispute exists.

 Its function is to look into the causes of the dispute and make recommendations either to the Minister (in the case of a committee) or to the House of Representatives in Parliament (in the case of a board).

Fact-finding has been characterized as “a semi-judicial process in which major reliance is placed on the facts of a dispute and the fact-finder and fact-finding board attempts to exercise few mediation principles or tactics.” (Simkin, 1971).

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Final-Offer Arbitration

Final-Offer Arbitration is a binding mechanism in which the arbitrator must choose one or the other of the final offers from the two parties in a contract negotiations dispute.

 

Both parties need to be ready to compromise their original positions so that, if arbitration is necessary, both final offers look reasonable to the neutral.

 

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Conciliation

Conciliation can be defined as: A strategy wherein the ‘third party’ supports the direct bi-partite negotiating process by assisting the parties to identify the cause and extent of their difference, to establish alternative solutions and their various implications and to develop and agree a mutually acceptable settlement.  The conciliator also acts as a medium for the continuation of the dialogue. 

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Goodmnan and Krislov (1974) point out that the conciliator “ has no authority to compel…nor to impose a settlement.  Stagner and Rosen describe the conciliator as a “kind of technical consultant to both sides, helping them find a solution. He has only such tools as his prestige as an official mediator, his persuasiveness, his sense of humour and his ability to see the acts as they appear to each of the parties. Under the revised rules for conciliation of the Kuala Lumpur regional Centre for Arbitration, the conciliator may make proposals for a settlement of the dispute only at the request or with the consent of all parties.

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Conciliation is the process of arriving at a settlement of a trade dispute with the help of a third, neutral party.  Conciliation can be voluntarily requested by either of the disputing parties or the Director-general of Industrial relations may intervene in a dispute “in the public interest”, requiring the parties to attend a conciliation meeting.  Conciliation is the first stage in the Industrial Relation Act for expeditions settlement of trade disputes between the management and the workmen, with the intervention of a third party, namely the Director general of Industrial Relations at the Ministry of Human Resources. 

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Mediation

Mediation is a process available to the disputing parties involved in contract negotiations by which an outside party is called to help them reach a settlement.

 

The mediator is a person who is considered unbiased and impartial and is sufficiently respected and trusted by both parties (Maimunah Aminuddin, 1999).

 

The mediator’s function is to provide a positive environment for dispute resolution by inviting an extensive experts with professional experience in the field of labor relations.

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Arbitration Arbitration can be defined as : A strategy wherein direct negotiation between management and union is replaced with a process of adjudication which involves the third party in making a decision (award) between the two-conflicting positions.  When the disputing employer and union cannot find a solution by themselves or with the help of the Department of Industrial Relations,

In arbitration, an impartial third party is given the authority to settle the dispute by examining the information given by both ideas and making a judgment.

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Dispute Resolution Arbitration Case Flow 

Claim Received and Reviewed  Claim Served on Respondent 

Answer Received and Analyzed 

Arbitration List Selection 

Prehearing 

Discovery 

Hearings Held 

Arbitration Deliberate 

Award Written and Served

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Procedure for dispute settlement in Malaysia

Labour LegislationEmployer Trade Union

Stage 1 Negotiation

Dispute

Stage 2 Conciliation

Collective Minister acts asAgreement Conciliator

Stage 3 Industrial Court

Source: Sharma, B. Industrial Relation in ASEAN, 1996.

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Relative advantages of alternative methods of Dispute Resolution. Cost : Private methods of dispute resolution tend to be less costly than reliance upon outside intervention.  Time : the length of time it takes to resolve a dispute can affect the desirability of an alternative method of resolution.  Expertise of the decision maker : If outsiders are involved in resolving a labor dispute, those systems which assure an outsider will have some expertise in labor relations are generally preferable. 

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Integrity of the bargaining process : Assuming that negotiations are the preferable method for establishing and enforcing job rights, reliance upon any other system as an adjunct to negotiations should reinforce the bargaining process. Privacy : negotiations, arbitration and mediation are generally private processes in which the dynamics of the parties are not subject to public scrutiny. Predictability of the result : a system of dispute resolution which allows the parties to anticipate the likely outcome should facilitate voluntary resolution.  Finality : the major problem with negotiations is that it is a system of dispute resolution which lacks of finality.

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STATISTICS ON INDUSTRIAL DISPUTES

 

 

The various statistics on industrial disputes can be obtained from the Industrial Relations Department or from the internet. The International Labor Organization (ILO) publishes a comprehensive labor statistics including industrial disputes. Various industrial practices could be determined by comparing statistics from the different countries. The data source of ILO is called LABORSTA, the Labor Statistics Database, ILO Bureau of Statistics and can be assessed through http://laborsta.ilo.org. 

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As the data is gathered form various countries, LABORSTA provided definition on the terminologies used in the statistics to ensure uniformity. The definitions are as follows:

The Resolution concerning statistics of strikes, lockouts and other action due to labour disputes, adopted by the Fifteenth International Conference of Labour Statisticians (Geneva, 1993), gives the following definitions for statistical purposes:

 A strike is a temporary work stoppage effected by one or more groups of workers with a view to enforcing or resisting demands or expressing grievances, or supporting other workers in their demands or grievances.

A lockout is a total or partial temporary closure of one or more places of employment, or the hindering of the normal work activities of employees, by one or more employers with a view to enforcing or resisting demands or expressing grievances, or supporting other employers in their demands or grievances.

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Workers involved in a strike: Workers directly involved in a strike are those who participated directly by stopping work. Workers indirectly involved in a strike are those employees of the establishments involved, or self-employed workers in the group involved, who did not participate directly by stopping work but who were prevented from working because of the strike.

  Workers involved in a lockout: Workers directly involved in a lockout are those employees of the establishments involved who were directly concerned by the labour dispute and who were prevented from working by the lockout. Workers indirectly involved in a lockout are those employees of the establishments involved who were not directly concerned by the labour dispute but who were prevented from working by the lockout.

A labour dispute is a state of disagreement over a particular issue or group of issues over which there is conflict between workers and employers, or about which grievance is expressed by workers or employers, or about which workers or employers support other workers or employers in their demands or grievances.

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Figure 1.0 provides some comparison on the industrial disputes data for some selected advanced and developing countries. The specific data used are explained below: 

Strikes and lockouts, by  economic activities

If a strike or lockout covers several economic activities, the information about it is usually given under each of the activities involved. As a result, the total number of strikes and lockouts shown for the total (all economic activities together) may be less that the sum for the component activities.  

Workers involved, by economic activity The number of workers involved in strikes and lockouts usually includes those involved indirectly as well as those involved directly.

  

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Days not worked, by economic activity The number of days not worked as a result of strikes and lockouts is usually measured in terms of the sum of the actual working days during which work would normally have been carried out by each worker involved had there been no stoppage.    

  

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Figure 1.0 (A) Statistics on Industrial Dispute for Selected Advanced Countries/

 

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

AUSTRALIA Stikes & lockout 1036  728  610  560  643  543  447  519  731  698 Workers involved 1181600  871500  489600  265100  344300  577700  315400  348400  461100  325400 Days not worked 1610600  941200  635800  501600 547600  928500  534200  526300  650500  469100 

UNITED STATES Stikes & lockout 40  35  35  45  31  37  29  34  17  39 Workers involved 392000  363800  181900  322000  191500  272700  338600  386800  72600  393700 Days not worked 4583600  3988600  3981200  5021500  5771200  4888600  4497100  5115700  1995800  20419400 

UNITED KINGDOM Stikes & lockout 369  253  211  205  235  244  216  166  205  212 Workers involved 176000  148000  385000  107000  174000  364300  130000  92700  140900  183200 Days not worked 761000  528000  649000  278000  415000  1303300  234700  282400  241800  498800 

JAPAN Stikes & lockout 310  263  252  230  209  193  178  145  154 Workers involved 52762  109296  64007  49009  37542  23196  47185  26291  25673 Dats not worked 96445  231424  116003  85377  76971  42809  110171  101508  87069 

FRANCE Stikes & lockout 12  15  10  14  33  6  12  6  7 Workers involved 183000  123100  18400  25500  619688  4858  9310  1257  1253 Days not worked 497300  359200  510900  500500  784000  444100  392600  345800  705120 

SWEDEN Stikes & lockout 23  20  33  13  36  9  14  13  10  2 Workers involved 2508  17987  29318  21996  125489  9137  11856  570  9481  163 Days not worked 21724  28141  189828  52398  627291  61348  23579  1677  78735  272 

FINLAND Stikes & lockout 284  168  126  171  112  94  91  98  65  96 Workers involved 166772  103505  23193  70535  127039  43113  28402  35380  14993  84092 Days not worked 458338  76094  17316  525703  869422  20078  103713  133203  18954  253838 

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Figure 1.0 (B) Statistics on Industrial Dispute for Selected Developing Countries

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000MALAYSIA Stikes & lockout 23  17  18  15  13  9  5  12  11  11 

Workers involved 4207  6110  2399  2289  1748  995  812  1778  3452  2969 Days not worked 23448  16164  7162  5675  4884  2553  2396  2685  10555  6068 

THAILAND Stikes & lockout 14  33  23  15  39  18  23  8  16  13 Workers involved 10045  8339  6204  8130  16782  8682  11909  2144  7867  5969 Days not worked 236020  235182  242803  81203  219934  92081  150610  213560  142913  225788 

INDONESIA Stikes & lockout 130  251  185  296  276  346  234 Workers involved 64530  143005  103490  147662  126855  221247  145559 Dats not worked 582472  1019654  966931  1421032  1300001  2496448  1250403 

PHILLIPINES Stikes & lockout 182  136  122  93  94  89  93  92  58  60 Workers involved 55390  47797  35119  48849  54412  32322  51531  34478  15517  21442 Dats not worked 1139809  723689  709584  567702  584179  518860  672730  556796  229248  319233 

INDIA Stikes & lockout 1810  1714  1393  1201  1066  1166  1305  1097  565 Workers involved 1342022  1252225  953867  846429  989695  939304  981267  1288923  647678 

Dats not worked26428092

 31258744

 20300653

  20983082 16289569

 20284803

 16971389

 22061984

  8857731 

SOUTH KOREA Stikes & lockout 234  235  144  121  88  85  78  129  198  250 Workers involved 175100  105000  108500  104339  49717  79000  43900  146065  92026  177969 Dats not worked 3257600  1527600  1308300  1484368  392581  893000  444700  1452096  1366281  1893563 

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Conclusion Understanding of Trade Disputes is important. IR act defines Trade Disputes: “any dispute between an employer and his

workmen which is connected with the employment or the non-employment or the terms of employment or the conditions of work of any such workmen”.

A Trade Disputes is a dispute:(1) between an employer and any number of his

employees, and(2) over the employment or the non-employment or the

terms of employment or the conditions of work of any such employees.

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Conclusion (cont..) Hagemeyer Industries Sdn Bhd and National Union of

Commercial Workers (Award 75 of 1983), IR court declared:

“the trade disputes definition, covers every dispute between an employer, and his workmen which is connected with the service of the workmen, or with the benefits and privileges incidental to that service.”

and in Teluk Anson Agricultural Enterprise Sdn.Bhd (Arcadia Estate) and National Union of Plantation Workers (Award 139 of 1984), the court stated:

“Non-employment - is the negative of employment, and will come into being in various form...it includes constructive dismissal.”

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Conclusion (cont..)

Dispute resolution:IR act makes available number of ways to resolve Trade Disputes:

(1) Fact Finding(2) Conciliation(3) Arbitration(4) Industrial Action

To prevent as well as tosettle the trade disputes

To settle the trade disputes

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Conclusion (cont..)

IR act assumes that this options/ways can be used to resolve trade disputes only after ..

“ the parties concerned have FAILED to resolve the dispute themselves through NEGOTIATION - the first choice to resolve the trade disputes”

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Conclusion (cont..) DISPUTE RESOLUTION (1) Fact Finding

- provided for in Part VIII of IR Act.- it does not itself resolve a trade dispute but help to resolve the dispute.- two agency fact finding:

(a) Committee of investigation(b) Board of Inquiry

(2) Conciliation- provided for in Part V of IR Act.- one agency - Department of IR

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Conclusion (cont..) DISPUTE RESOLUTION (3) Arbitration

- provided for in Part VII of IR Act.- one agency - Industrial Court.- Industrial Court has jurisdication over trade disputes.

(4) Industrial Action- provided for in Part IX of IR Act.- IR Act acknowledges only the strike, the lockout and picketing as legitimate techniques to settle trade disputes.- Strikes and Lock-out also regulated by Trade Union Act.

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Conclusion (cont..) Trade Disputes cannot be stop or eliminate

permanently. We cannot gurantee of zero disputes. But it can be control or reduced/minimize the

disputes. It’s better to prevent rather than cure. Managing Trade Disputes is important:

(a) maintaining industrial harmony.(b) protect workers & employers(c) social relations(d) increase productivity

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Conclusion (cont..) In Malaysia,

No. of strikes/lock-out No of cases of trade disputes Some of ways to prevent/control trade disputes:

(a) Mutual understanding.(b) Teamwork(c) Each group should play their role(d) Respect and care(e) Complying Code of Conduct Industial Harmony.

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