CHAPTER 18 - THE UNION-MANAGEMENT FRAMEWORK AND

THE TRADE UNIONS ACT

KEY CONCEPTS AND SKILLS

➲ Interactions of the three principal parties in the union-management framework

➲ Goals and objectives of trade unions➲ Reasons why employees join trade unions➲ Process in which a trade union of workmen is

formed➲ How management can take actions to prevent a

trade union of workmen from forming and the limitations on management’s actions

➲ Main features of the Trade Unions Act and the rights and liabilities of trade unions

CHAPTER OUTLINE

➲ Managing the management-union relationship➲ Parties in the system➲ Unions and human resource management➲ Union goals and philosophy➲ Types of unions➲ Why employees join unions➲ How unions are formed➲ Limits on management's actions in preventing

unions➲ The Trade Unions Act 1959➲ Registration of trade unions➲ Constitution of trade unions➲ Rights and liabilities of trade unions➲ Funds and accounts

MANAGING THE UNION-MANAGEMENT RELATIONSHIP

➲ Managers’ roles change when employees’ union present

➲ When union formed, managers must comply with new rules that emerge from union-management framework

➲ Changes as result of CA and changes mandated by law

➲ Presence of union will place constraints on organisation and limit freedom of managers to behave in any way they like

➲ Many organisations try to avoid unions.

MANAGING THE UNION-MANAGEMENT RELATIONSHIP

➲ Organisations resist unionisation because:➲ hope to retain lower labour costs through lower

wages ➲ want greater management flexibility in day-to-

day operations

➲ Trend is for greater cooperation and less antagonism in union-management relationships.

PARTIES IN THE SYSTEM

➲ Three principal parties in union-management framework:

➲ employees and their representatives (unions)➲ managerial employees (management)➲ government representatives in the legislative,

judicial, and executive branches (government)

PARTIES IN THE SYSTEM

➲ Unions rely on management to run business and provide jobs

➲ Depend on government for protection of workers’ rights

➲ Management rely on government to protect from illegal union activities

➲ Rely on union to honour its obligations➲ Both management and union depend on

government to enforce laws which affect both parties

➲ Main objective of government to have both union and management work together to meet society’s needs through productive organisations

UNIONS AND HUMAN RESOURCE MANAGEMENT

➲ Unions have effect on work environment and can influence it

➲ Presence of union changes relationship between management and employees

➲ HR department and line managers and supervisors will find roles altered

➲ More formal rules and regulations and less management or supervisory discretion allowed

UNIONS AND HUMAN RESOURCE MANAGEMENT

➲ On other hand, certain things do not change➲ Management still has prerogatives➲ Responsibility for ensuring employee performance,

objectives of organisation, budgets, and the way the business should be run are not bargained with union.

➲ Although presence of unions may restrict freedom of managers and supervisors, organisation still responsible to ensure effective HR management policies and procedures

➲ Union cannot try to tell management how to run business nor assume responsibilities of HR department.

UNION GOALS AND PHILOSOPHY

➲ Objectives of union influenced internally by demands of members, aspirations of leaders themselves, and relative strength of union in both finance and membership.

➲ In terms of external environment, objectives of union affected by factors like financial stability of employer, state of national economy, and government policies.

Objectives of unions

1. To secure and improve the living standards and economic status of its members;

2. To enhance and, if possible, guarantee security for its members against threats and contingencies that might result from economic cycles, technological change, and management decisions;

3. To influence power relations in the social system so that the union grows stronger;

4. To enhance the welfare of all those who work for a living; and

5. To guard against the use of arbitrary and inconsistent policies and practices in the workplace.

TYPES OF UNIONS

National Unions➲ Unions whose members are working for different

employers, but in same occupation, trade, or industry

➲ Because Trade Unions Act does not allow workmen from Sabah or Sarawak to join unions in Peninsula Malaysia, national unions are restricted to having members from Peninsula Malaysia, Sabah, or Sarawak only

TYPES OF UNIONS

In-house Unions➲ Unions formed by workmen working for same

employer➲ Membership may come from workmen in different

occupations➲ Employees of statutory authorities may form union

but Trade Unions Act specifies that they can only form in-house unions.

TYPES OF UNIONS

Employers’ Associations➲ Trade union of employers formed to look after the

interest of the employers in industrial relations and collective bargaining.

WHY EMPLOYEES JOIN UNIONS

➲ Dissatisfaction with Management➲ Social Needs➲ Opportunity for Leadership➲ Peer Pressure

HOW UNIONS ARE FORMED

➲ Union can begin only when employees want it and create it

➲ National unions have full-time professional employees educate potential union members about benefits of membership, emphasising primarily on how union can protect employees and represent employees’ interests

➲ Unions less successful in convincing employees to form union when faced with a proactive HR department, because there is little that union can offer

LIMITS ON MANAGEMENT’S ACTIONS IN PREVENTING UNIONS

➲ Once there is a drive to form a union, management’s actions limited

➲ Industrial Relations Act protects employees from management reprisals

➲ When a union organising committee is present, more problems for management

➲ Committee’s goal to get as many employees as possible to sign up

➲ Once committee achieves more than 50 percent of employees signing up, can inform DG of Trade Unions and file claim for recognition from management

LIMITS ON MANAGEMENT’S ACTIONS IN PREVENTING UNIONS

➲ If majority of employees want to have union then management will have no choice but to accept that it is now a unionised organisation.

➲ Management actions to prevent unionisation if done incorrectly may backfire

Management’s Campaign against Unionisation

➲ Organisations that are against unions can mount careful campaign to counteract

➲ Campaign starts by collecting information and facts that might cause employees to vote against having a union.

➲ HR department can arrange for information to be disseminated to employees and explain to them about need to stay non-union

➲ What is more important for organisation to remain union-free is treatment employees receive even before a union starts trying to form.

THE TRADE UNIONS ACT 1959

➲ Act that governs formation, registration, and activities of trade unions

DEFINITION OF TRADE UNION

➲ Any association or combination of workmen or employers, being workmen or employers whose place of work is in West Malaysia, Sabah or Sarawak, as the case may be, or employers employing workmen in West Malaysia, Sabah or Sarawak, as the case may be -

➲ within any particular trade, occupation or industry or within any similar trades, occupations or industries; and

➲ whether temporary or permanent; and➲ having among its objects one or more of the

following objectives

DEFINITION OF TRADE UNION

Objectives of trade union➲ the regulation of relations between workmen and

employers, or between workmen and workmen, or between employers and employers;

➲ the representation of either workmen or employers in trade disputes;

➲ the conducting of, or dealing with, trade disputes and matters related thereto; or

➲ the promotion or organisation or financing of strikes or lock-outs in any trade or industry or the provision of pay or other benefits for its members during a strike or lock-out.”

EXPLANATION OF DEFINITION

➲ No necessity to have word “union” as part of name➲ Employers’ unions must be separate from

employees’ unions➲ Unions must be for particular trades, occupations

or industries➲ Ensures unions are homogeneous in membership➲ Whether trade, occupation or industry is similar

dealt with in Section 2 subsection (2) of Act which states that “similar” means “similar in the opinion of the DG”

➲ Act also separates Peninsular Malaysia from Sabah and Sarawak so no trade union whose membership open to all Malaysians

REGISTRATION OF TRADE UNIONS

➲ Every trade union required to apply for registration with DG of T U within 1 month from date of establishment

➲ Every application shall be signed by at least 7 members

➲ Application accompanied by copy of rules ➲ Application shall also contain following particulars:➲ names, occupations and addresses of members

making application;➲ name of trade union and address of its head office; ➲ titles, names, ages, addresses and occupations of

officers of union, and any other information regarding such officers as DG may require to be furnished

REFUSAL OF REGISTRATION

➲ DG may refuse to register trade union if there is already in existence a trade union in respect of the particular trade, occupation or industry

REFUSAL OF REGISTRATION

➲ DG shall refuse to register a trade union on any of the following grounds:

➲ he is of the opinion that the trade union is likely to be used for unlawful purposes or for purposes contrary to or inconsistent with its objects and rules

➲ any of the objects of the trade union is unlawful➲ he is not satisfied that the trade union has complied

with this Act and of the regulations➲ he is satisfied that the objects, rules, and constitution of

the trade union conflict with any of the provisions of the Act or of any of the regulations

➲ the name under which the trade union is to be registered is identical to that of any other existing trade union, or so nearly resembles the name of such a union; or in his opinion the name is undesirable.

REGISTRATION OF TRADE UNIONS

➲ Any trade union that does not apply for registration within required period, or if registration is refused, withdrawn or cancelled, shall be deemed to be unlawful association

➲ When union is declared to be unlawful association, it is to be dissolved and funds disposed of in accordance with its rules

CONSTITUTION

Membership➲ A person under 21 but above 16 may be member of

trade union unless rules of union specify otherwise➲ If student, then cannot join or be member of union

unless bona fide employed as workman and over 18➲ Member of union below 18 subject to certain voting

restrictions; not entitled to vote on following matters:➲ strikes and lock-outs ➲ the imposition of a levy➲ dissolution of the trade union ➲ amendment of the rules of the trade union where

such amendment results in increasing the liability or in decreasing the benefits to members.

CONSTITUTION

Public Officers➲ Section 27 of Act, no public officer shall join or be

member of any union unless exempted by Agong➲ Following categories of public officers specifically

excluded from this exemption:➲ members of the Royal Malaysian Police➲ members of any prison service➲ members of the Armed Forces➲ officers engaged in confidential or security capacity➲ officers who are prohibited under any written law

from forming or being members of a trade union➲ officers holding any post in the Managerial and

Professional Group.

CONSTITUTION

Employees of statutory authorities➲ May form or join trade union but union must

confine membership to employees of that authority➲ Categories of employees not allowed to be

members are:➲ any person holding any post in the Managerial and

Professional Group➲ any person engaged in a confidential or security

capacity

CONSTITUTION

Officers of the union➲ Section 28 of Act, person shall not act as member

of executive of union or disqualified for election, if:➲ not a citizen of the country➲ has been an executive member of any union the

registration of which has been cancelled or withdrawn under certain circumstances

➲ an office-bearer or employee of a political party➲ has been convicted of CBT, extortion or any offence,

which renders him unfit to be an officer ➲ a bankrupt.

RIGHTS AND LIABILITIES OF TRADE UNIONS

➲ Main rights, immunities or privileges are:➲ No suit maintainable in any civil court against any trade

union, officer or member of such union in respect of any act done in contemplation or in furtherance of a trade dispute

➲ A suit against a registered union or any members or officers of such union in respect of any tortuous act alleged to have been committed by or on behalf of the trade union shall not be entertained by any court

➲ Objects in restraint of trade shall not be deemed unlawful and therefore no member shall be liable to criminal prosecution for conspiracy

➲ A registered trade union may sue or be sued under its registered name

FUNDS AND ACCOUNTS

➲ Funds of trade union may be expended only for specific objects as listed in Section 50 of Act

➲ Long list and Minister may add or amend list➲ Funds specifically not to be used for purpose of

payment of any fine or penalty imposed upon any person by sentence or order of a court

➲ Funds also not to be applied in any payment whatsoever to a political party or in furtherance of any political object

➲ Union shall close its accounts on 31 March of each year and secretary of union shall transmit to DG audited accounts for year before 31 July of that year