MOL to develop tripatite system

Ministry of Labor held a seminar to

gather ideas from stakholder to develop
ministry tripatite system.
Labor minister Somsak Thepsutin presided
over the seminar on measures to promote and
develop labor tripatite.
The tripatite system was firstly introduced
by the International Labor Organization (ILO) in
Thailand since 1956 and was inserted into labor
relationa and labor protection laws. The tripatie
comprises of representatives from employers,
employees and government officials. The committee
sitting in the tripatite is selected by election or being
appointed by the minister.
Mr.Somsak said the outcomes of today
seminar will be used as guideline to develop tripatie
system of the country. Besides, the ministry is open
for suggestions and comments to be used for
development of the tripatie belonging to the ministry.

Structure of the ILO

English . Français . Español

About the ILO

The ILO accomplishes its work through three main bodies, all of which encompass the
unique feature of the Organization: its tripartite structure (government, employers,
workers).

1. International Labour Conference: The member States of the ILO meet at the
International Labour Conference in June of each year, in Geneva. Each member State is
represented by two government delegates, an employer delegate and a worker delegate.
They are accompanied by technical advisors. It is generally the Cabinet Ministers
responsible for labour affairs in their own countries who head the delegations, take the
floor and present their governments' points of view.
Employer and worker delegates can express themselves and vote according to
instructions received from their organizations. They sometimes vote against each other or
even against their government representatives.

The Conference plays a very important role. It establishes and adopts international labour
standards. It acts as a forum where social and labour questions of importance to the entire
world are discussed. The Conference also adopts the budget of the Organization and
elects the Governing Body.

2. The Governing Body is the executive council of the ILO and meets three times a year
in Geneva. It takes decisions on ILO's policy. It establishes the programme and the
budget which it then submits to the Conference for adoption. It also elects the Director-
General.

It is composed of 28 government members, 14 employer members and 14 worker

members. Ten of the government seats are permanently held by States of chief industrial
importance. Representatives of other member countries are elected at the Conference
every three years, taking into account geographical distribution. The employers and
workers elect their own representatives respectively.

3. The International Labour Office is the permanent secretariat of the International

Labour Organization and focal point for the overall activities that it prepares under the
scrutiny of the Governing Body and under the leadership of a Director-General, who is
elected for a five-year renewable term. The Office employs some 1,900 officials of over
110 nationalities at the Geneva headquarters and in 40 field offices around the world. In
addition, some 600 experts undertake missions in all regions of the world under the
programme of technical cooperation. The Office also constitutes a research and
documentation centre and a printing house issuing a broad range of specialized studies,
reports and periodicals.
Updated by BB. Approved by MT/DS. Last updated: 26 September 2000.

FORWORD

CODE OF COUNDUCT FOR INDUSTRIAL HARMONY

AIM

1. To lay down principles and guidelines to employers and workers on the practice of industrial
relations for achieving greater industrial harmony.

COMMITMENT
2. The Malayan Council of Employers' Organisation as representatives of employers generally
and the Malaysian Trades Union Congress as representatives of workers generally.

3. AFFIRMING their belief in the concept and principles as enshrined in the RUKUNEGARA;

4. BEING CONSCIOUS of the responsibilities towards those whom they represent as well as
the society of which they are an integral part;

5. RECOGNISING that industrial peace is essential for a sound and stable economy, especially
at a time of stagflation, and that a sound and stable economy is of paramount importance
for achieving the objectives of the national development plans which are committed to the
task of creating a united, socially just, economically equitable and progressive Malaysian
nation;

6. HEREBY ENDORSE, with the collaboration and approval of the Ministry of Labour and
Manpower, this CODE OF CONDUCT FOR INDUSTRIAL HARMONY and commend both
employers and workers in Malaysia to observe and comply with its Provisions, viz;

i. to refrain from taking unilateral action with regard to any industrial dispute;
ii. to resolve all differences, grievances and disputes strictly in accordance with the
grievance procedures of collective agreements, or, where there are no agreements,
by negotiation, conciliation and arbitration;
iii. to ensure that at all times all matters in dispute are dealt with by the proper
machinery established for that purpose;
iv. to promote constructive and positive cooperation at all levels in industry and to
abide faithfully by the spirit of agreements mutually entered into;
v. to establish, where none exists, a procedure which will ensure a complete and
speedy investigation of grievances leading to a joint settlement;
vi. to comply with the various steps in the procedure for disposal of grievances and to
avoid any arbitrary action which ignores these procedures;
vii. to refrain from resorting to coercion, intimidation, victimisation and to avoid go-
slow, sit-down and stay-in-strikes; and
viii. to educate managements and workers of their obligations to each other.
7. HEREBY FURTHER ENDORSE AND COMMEND the observance and compliance by both
employers and workers, of such industrial relations practices as may be agreed, from time
to time, between the Malayan Council of Employers' Organisation as representatives of
employers generally and the Malaysian Trades Union Congress as representatives of
workers generally and accepted by the Ministry of Labour and Manpower.

8. EMPLOYERS FURTHER AGREE not to support or encourage any unfair labour practices such
as:

a. interference with the affairs of a trade union and the rights of workers to
organise;
b. discrimination, restraint or coercion against any worker because of legitimate
trade union activities; and
 c. abuse of authority in any form.
3. UNIONS FURTHER AGREE not to support or to encourage unfair labour practices such as:

a. negligence of duty;
b. damage to property;
c. insubordination; and
d. interference with or disturbance to normal work.

Dated at Kuala Lumpur, this 9th day af February, 1975.

(SGD) (SGD)

------------------------ ------------------------

Tan Sri Senator Gan Teck Yeow Dr P. P. Narayanan

(SGD) (SGD)

------------------------ ------------------------

Tan Sri Senator S. O. K. Ubaidulla Encik T. Narendran

(SGD) (SGD)

------------------------ ------------------------

Encik J. F. Philips Encik S. J. H. Zaidi

(SGD) (SGD)

------------------------ ------------------------

Encik W. Fernando Encik Yahaya b. Mohd. Ali

(SGD)

------------------------

Puan John Gurusamy

(SGD)

------------------------

Encik Zainal b. Rampak

Malayan Council of Employers' Organisation Malayan Trade Union Congress

(SGD)
------------------------

(DATUK LEE SAN CHOON, S.P.M.J., K.M.N)

Menteri Buruh dan Tenaga Rakyat,

Malaysia

AREAS FOR CO-OPERATION AND AGREED INDUSTRIAL RELATIONS PRACTICES

(Under Clause 7 of the Code of Conduct for Industrial Harmony)

AREAS FOR CO-OPERATION AND AGREED INDUSTRIAL RELATIONS PRACTICES

RESPONSIBILITIES

At the level of the Establishment or Undertaking:

1. As employers and workers and trade unions representing them are jointly and severally
responsible for good industrial relations, the first need is for both managements and trade
unions to accept, at the highest level, the same degree of responsibility for industrial
relations as for other functions within their respective organisations. Good industrial
relations need to be developed within the framework of efficiency of the establishment or
undertaking, and, as such, a major objective of management must be to develop just and
effective personnel and industrial relations policies which engender the confidence of all
employees, subject to the purpose for which the establishment or undertaking was
established and its social obligation to the nation. Equally, trade unions should ensure that
the policies and practices which they adopt are not only fair in relation to the function and
purpose for which they have been formed but also take into consideration national
interests.

2. Good industrial relations depend upon good organisation of work. Management should
therefore take all reasonable steps to ensure that:

a. all management personnel understand their responsibilities and what is required of

them, and have the training and authority necessary to discharge such duties and
responsibilities efficiently;
b. duties and responsibilities for each group of employees are stated with clarity and
simplicity in the organisational structure;
c. individual employees or work-groups know what their objectives are and are
regularly kept informed of progress made towards achieving them;
d. where possible, work is organised in such manner so that the individual employee
has the chance to achieve a sense of job satisfaction.
3. Where a trade union has been recognised:
 a. management should take the initiative in seeking to establish, jointly with the trade
union concerned, effective procedures for negotiation, consultation and the
settlement of grievances and disputes;
b. management and the trade union should take all reasonable steps to ensure that
both management's and union's personnel observe agreements reached and use
agreed procedures; and
c. management should not discourage employees from joining the recognised union
and from taking an active part in its legitimate activities.
4. The Supervisor is management's first "contact" man with the employees and special
attention should be given to his appointment and his needs on the job. The employer
should ensure that he:

a. is technically proficient and adequately trained and possesses the personal qualities
required to exercise supervision;
b. has charge of a work-group of a size that he can supervise effectively;
c. is an effective link in the interchange of information and views between senior
management and members of his work-group;
d. is briefed about innovations and changes before they occur so that he can explain
management's policies and intentions to his work-group.

At National or Industry Level:

5. Employers' association should, inter alia:

a. co-operate with the trade unions in establishing effective procedures at industry or

national level for the negotiation of terms and conditions of employment and for
the settlement of disputes;
b. encourage the establishment of effective procedures among member organisations
for the settlement of grievances and disputes at the level of the establishment or
undertaking;
c. take all reasonable steps to ensure that member organisations observe agreements
and agreed procedures;
d. collect, analyse and distribute information to its members concerning industrial
relations matters;
e. identify trends and new developments in industrial relations and help its members
to anticipate and keep abreast of change; and
f. provide an efficient and realistic advisory service to its members on all matters of
industrial relations.
6. A trade union can promote the interests of its members effectively only if it accepts, that, in
common with management, it has an interest in and a responsibility for the success of the
undertaking and for the national, economic and social well-being of the country as a whole.
This involves co-operation with employers in promoting efficiency and good industrial
relations.
7. To secure these aims, a trade union should:

a. co-operate with employers' association in establishing effective procedures at

industry level for the negotiation of terms and conditions of employment and for
the settlement of disputes that arise;
b. co-operate with individual management in establishing effective procedures for
negotiation, consultation, communication and the settlement of grievances and
disputes;
c. take all reasonable steps to ensure that their officials, and members observe
agreements and use agreed procedures; and
d. make full use of the established procedures for the settlement of disputes.
8. To ensure that its organisation is effective, a trade union should also:

a. have enough officials, full-time or otherwise, to maintain regular contacts not only
with union members but also with managements of establishments or undertakings
where the union has been recognised;
b. maintain a communications system which secures the interchange of information
and views between different levels in the union and ensures that members are
systematically and regularly kept informed, factually and objectively, of the
progress of negotiations for a collective agreement;
c. encourage its members to attend union meetings and to participate fully in union
activities by holding branch meetings at times and places convenient to the
majority; and, where there is a large enough membership, consider forming the
branch organisation on the establishment; and
d. establish effective procedures for the settlement of disputes among members of
the union.
9. The trade union should also ensure that all its officials:

a. clearly know and understand the nature and extent of their responsibilities and
authority;
b. are adequately trained to look after members' interests in a responsible and
efficient way;
c. wherever possible and practicable regular dialogue is held with officials of
employers' association and its members.
10. As the basic relationship between an employer and the individual employee is defined in the
individual contract of employment, it should be expressed in clear and precise language. It
is the employee's responsibility to satisfy himself that he understands the terms of his
contract and to abide by them.

11. The employer and the trade union concerned, if applicable, should ensure that procedures
for dealing with questions that arise on the individual contract of employment are clearly
laid down. But it is the responsibility of the employee himself to:

a. familiarise himself with these procedures; and

b. make use of them when the need arises.
EMPLOYMENT POLICY

12. A sound employment policy is a prerequisite to good employer-employee relations. It

should also reflect Government's policy requirements as are announced from time to time.
Good planning and efficient use of manpower are important both for the success of the
establishment or undertaking and for the security of those employed in it. The employer
should, therefore, inter alia,

i. keep fluctuations in manpower requirements to a minimum by means of advance

planning;

ii. make changes, wherever necessary, with as little disruption as is necessary; and

iii. where practicable, maintain, in consultation with the employees or their

representatives or trade union, as appropriate, a scheme for transferring
employees from one job to another within the establishment or undertaking so that
unavoidable changes in manpower requirements can be handled smoothly.

Recruitment

13. Recruitment and selection policy can help good industrial relations by ensuring that workers
are engaged for jobs suited to their abilities. The employer should, therefore:

a. define the qualifications and experience needed for the vacant job;

b. ensure that selection is based on suitability for the job;

c. consider filling the vacancy by transfer or promotion before trying to recruit from
outside;

d. explain the terms and conditions of employment to applicants before they are
engaged; and

e. ensure that those who carry out recruitment and selection are competent to do so
and that the recruitment and selection methods are regularly checked to be
effective.

Training

14. Adequately trained employees are essential for the success of the undertaking. Training
appropriate to his work also helps the individual to develop his potential, to increase the
satisfaction he finds in his work and to improve his earning capacity.

15. Newly recruited employees should be given initial instruction covering:

a. the organisation, its employment policy and welfare and social facilities that are
available; and

b. specific training in the job to supplement previous training and experience.

 16. Younger persons entering employment for the first time should be given broader basic
instructions covering a general introduction to working life.

17. In appropriate cases, further training should he provided when there is a significant change
in the content of the job or in the level of the job being performed.

Payment System

18. Although payment systems vary according to the nature and organisation of the work, local
conditions and other factors, the following principles should be observed so as to ensure
that the system of payment is soundly based and thereby reduces the incidence of disputes
arising there from:

a. payment systems should be as simple as possible;

b. differences in rates should be related to the requirements of the job which should,
wherever possible, be assessed by agreed or well established methods;

c. piece-work rates, incentive bonuses, etc. should be determined by agreed or well

established methods; and

d. rates of payment should be jointly negotiated where a recognised trade union

exists.

Security of Employment

19. Insecurity of employment and fear of the consequences of redundancy and retirement have
a major influence on attitudes to work and good industrial relations. Consistent with the
efficiency and success of the undertaking, the employer should provide greatest possible
stability in terms of job tenure. The employer should also, where practicable:

a. offer prospects for advancement and promotion within the undertaking with
opportunities for any necessary training; and

b. provide retirement, retrenchment and sick pay schemes to supplement statutory

provisions.

Redundancy and Retrenchment

20. In circumstances where redundancy is likely an employer should, in consultation with his
employees' representatives or their trade union, as appropriate, and in consultation with
the Ministry of Labour and Manpower, take positive steps to avert minimise reductions of
workforce by the adoption of appropriate measures such as:

i. limitation on recruitment;

ii. restriction of overtime work;

iii. restriction of work on weekly day of rest;

 iv. reduction in number of shifts or days worked a week;

v. reduction in the number of hours of work; and

vi. re-training and/ or transfer to other department/work.

21. The ultimate responsibility for deciding on the size of the workforce must rest with the
employer, but, before any decision on reduction is taken there should be consultation with
the workers or their trade union representatives on the reduction.

22.

a. If retrenchment becomes necessary, despite having taken appropriate measures,

the employer should take the following measures:
i. giving as early a warning, as practicable, to the workers concerned;

ii. introducing schemes for voluntary retrenchment and retirement and for
payment of redundancy and retirement benefits;

iii. retiring workers who are beyond their normal retiring age;

iv. assisting in co-operation with the Ministry of Labour and Manpower, the
workers to find work outside the undertaking;

v. spreading termination of employment over a longer period;

vi. ensuring that no such announcement is made before the workers and their
representatives or trade union have been informed.

b. The employer should select employees to be retrenched in accordance with an

objective criteria. Such criteria, which should have been worked out in advance with the
employees' representatives or trade union, as appropriate, may include:

i. need for the efficient operation of the establishment or undertaking;

ii. ability, experience, skill and occupational qualifications of individual

workers required by the establishment or undertaking under (i);

iii. consideration for length of service and status (non-citizens, casual,

temporary, permanent);

iv. age;

v. family situation; and

vi. such other criteria as may be formulated in the context of national policies.

21. Employees who are retrenched should be given priority of engagement/re-engagement, as

far as is possible, by the employer when he engages workers.

22. The appropriate measures and objective criteria should comprise part of the establishments
or undertaking's employment policy.

Working Conditions
 25. Good physical working conditions help to achieve good industrial relations. The first need is
for the employer to ensure that the standards laid down by law are fully complied with. But
this is not enough by itself, for most work-places could be made safer, healthier and more
pleasant to work in if more care were taken about the working environment-like improving
the cleanliness, tidiness and general appearance of the work-place; like reducing strain and
monotony involved in the work; like encouraging workers and their representatives to co-
operate in improving working conditions and providing for consultation with workers or their
representatives on these matters. Workers or their trade union representatives should co-
operate with employers in making the best use of the arrangements for consultation in this
field.

COLLECTIVE BARGAINING

Recognition of Trade Unions

26. Claims for recognition should, as far as possible, be settled voluntarily between the parties.
Where there is doubt whether the union concerned is the proper union under the law to
represent the employees or about its representative position the services of the Ministry of
Labour and Manpower should be sought to resolve the matter without delay.

27. Where a trade union has not secured recognition from the employer for negotiating rights,
the employer should nevertheless be prepared to consider receiving representations from
the union on behalf of its members about grievances or other matters, which can be settled
on an individual basis.

Where Recognition has been accorded

28. Where a trade union has secured recognition the employer and the union should establish
effective procedures for negotiation. To enhance the smooth and efficient functioning of
such procedures the employer should make available to the union, where possible,
reasonable facilities to enable the union to keep in touch with its members and to represent
them effectively.

29. Senior management personnel should also maintain regular contacts with officials of the
trade union. Similarly, the principal officials of the trade union should also keep in touch
with members of the senior management of the undertaking or establishment. Contact
should not be left until trouble occurs. Management should ensure that there is a close
rapport and a continuing dialogue with the trade union and its officials.

Negotiating Procedures

30. Negotiation of collective agreement should be as simple as possible and, with this in mind,
the employer and the union should establish agreed procedures which may be formal.
 31. It is desirable that respective employers' associations and trade unions negotiate certain
matters at industry level, including:

a. those conditions of employment which can be effectively applied throughout the

industry uniformly;

b. general guidelines for the negotiation of matters which cannot be decided

satisfactorily at industry level; and

c. a procedure for settling disputes, either for the industry as a whole or as a model
for adoption at the level of the undertaking or establishment.

Collective Agreements

32. Collective agreements deal with matters of procedures and matters of substance, and may
cover both in a single document or deal with them separately. In either case there should
be provision for regular review for ensuring that the procedural provisions have not become
out of date.

33. The procedural provisions should set out the formal constitution of joint negotiating bodies
and should also cover:

a. the matters to be negotiated and the level at which bargaining should take place;

b. the arrangements for negotiating substantive agreements on terms and conditions

of employment, including the period for which the agreements are to run and the
arrangements under which either party can terminate and re-negotiate an
agreement;

c. the procedures for settling collective disputes and individual grievances;

d. the procedures regarding redundancy and temporary lay-offs, discipline and

dismissal.

34. The substantive provisions should cover:

a. wages and salaries, overtime rates, bonuses where applicable, piece-work and
other systems of calculating earnings in relation to performance; and

b. hours of work; provisions for overtime work and shift working; holiday entitlement
and pay.

35. The agreements may also cover such matters as:

a. fringe benefits such as sick pay, pensions and guaranteed pay schemes;

b. work study and other techniques for determining levels of performance and
productivity and job grading such as method study, work measurement and job
evaluation;

c. the deduction by management of trade union subscriptions etc. from employees'

wages; and
 d. the facilities for trade union activities in the establishment.

Procedure for Resolving Collective Dispute

36. A procedure for settling collective dispute should:

a. be in writing and agreed between the employer and the trade union concerned;

b. define the appropriate levels for raising and settling different types of issues; and

c. prescribe time limits within which issues should normally be settled or else taken to
the next stage of the procedure.

37. The procedure should incorporate the following:

a. workers' representatives should raise the issue in dispute with employer at the
level directly concerned;

b. Failing settlement it should be referred to a higher level within the establishment;

c. if still unresolved the issue should, where appropriate, be referred to the

employers' association and the trade union concerned and dealt with in accordance
with the industry-wide dispute-procedure agreed between them; and

d. if still unresolved, it should be referred to the Ministry of Labour and Manpower for
conciliation/ arbitration.

Procedure for Resolving Individual Grievance

38. Effective procedure should exist for a worker to seek redress for his grievance. Such
procedure shall be established in consultation with the worker's representatives or trade
union, as appropriate.

39. The aim of the procedure should be to settle the grievance as near as possible to the point
of origin and should, therefore, operate as follows:

a. the employee should first discuss the grievance with his immediate superior,
accompanied if he so wishes by his union representatives; and

b. if he fails to get satisfaction, he should make use of the agreed appeals procedure.

40. The appeals procedure should:

a. be in writing;

b. be made known to each employee;

c. be as simple and rapid as possible, with prescribed time limits for each stage:

d. set out a procedure for appeal at more than one level wherever practicable;

e. require a recording of the outcome of each stage of the procedure, for reference to
the next stage and where possible this should be in the form of an agreed
statement in writing; and
 f. give the worker the right to be represented by his representative trade union
official.

Procedure for Disciplinary Action

41. An employer should ensure that a fair, effective and expeditious procedure exists for dealing
with disciplinary matters. Such procedure may be established in consultation with the
employees' representatives or trade union as appropriate. The employer should define and
make known to each employee the rules of work and the disciplinary action which may
follow if they are broken. Penalties should be graduated according to the seriousness of the
offence. An employee should not, except in cases of gross misconduct, be dismissed for a
first offence.

42. The disciplinary procedure should be in writing and be made known to each employee. The
proceedings should be conducted in accordance with the rules of natural justice and should:

a. provide for the employee to be informed, in writing, of the misconduct;

b. specify who has the authority to take what forms of disciplinary action;

c. provide for full and speedy consideration by employer of all the relevant facts;

d. give the worker the opportunity to state his case and the right to be represented by
his workers' representative or trade union official;

e. in the case of less serious offences, provide, in the first instance, for a warning by
the employee's immediate superior;

f. in the case of more serious offences, provide for a formal warning in writing,
setting out the circumstances and the disciplinary action to which an employee will
be liable if he commits a further offence and require a copy of this record to be
given to the employee and if he so wishes to his employees' representative or trade
union official; and

g. provide for a right of appeal against disciplinary action to a higher level of

management not previously involved.

COMMUNICATION AND CONSULTATION

Communication

43. Good employer-employee relations are dependent upon efficiency. Employees' efficiency
may be enhanced if:

a. they are kept informed on matters which concern them; and

b. their views are sought on existing practices and on proposed changes, which would
affect them.

44. The employer has an important role in this and, in particular, he should:
 a. ensure that management personnel regard it as one of their principal duties to
explain to those responsible to them plans and intentions which will affect them (It
is of great importance that this chain of communication should be effective down to
each supervisor and through him to each individual employee);

b. encourage management personnel to give employees a sense of personal

involvement by providing adequate opportunities for them to discuss matters
affecting their job and work environment; and´

c. ensure that arrangements for consultation with workers or their representatives are
adequate and are fully used.

45. Management should ensure that each employee is given full information about his rights
and obligations. This should include information on:

a. his terms and conditions of employment;

b. agreements with trade unions which affect him;

c. what is required of him in his job and to whom he is directly responsible;

d. procedures for making suggestions or taking up grievances and to whom he can go

for help or advice on personnel problems;

e. opportunities for promotion and ar training which is necessary to achieve it; and

f. safety rules.

46. The employer should regularly provide employees with as much information as possible o
matters affecting them. This should include information on:

a. the performance and prospects of tb undertaking;

b. organisational and management change which affect employees; and

c. organisational and management change which affect employees; and

47. Methods of communication and consultation should suit the particular circumstances within
th undertaking. The most important method is b word of mouth through regular personal
contac between managers and employees at all levels. This could be supplemented by:

a. written information provided through notice board, house journals, handbooks, etc;

b. training, particularly induction courses for newly recruited employees;

c. regular consultation between managers and other means established for the
purpose; and

d. meetings arranged for special purposes.

Joint Consultation and Works Committee

48. Consultation between employer and employees or their trade union representatives at the
floor level would be useful in all establishments or undertakings, whatever their size.
 49. The employer should take the initiative in setting up and maintaining regular consultative
arrangements best suited to the circumstances of the establishment in co-operation with
employees' representatives and the trade union concerned.

50. As far as is practicable every establishment or undertaking should have a recognised

machinery for consultation through the establishment of a works committee comprising
employer's and employees' representatives at floor-level. The employer's and the
employees' representatives or trade union should agree to:

a. a formal constitution which sets out the Committee's aims and functions, its
composition and that of sub-committees, if any, arrangements for the election of
representatives and rules of procedure;

b. enable the committee to discuss the widest possible range of subjects of concern to
employees, paying particular attention to matters closely associated with the work
situation;

c. ensure that all members of the committee have enough information to enable them
to participate effectively in committee business, and that the committee is used as
a medium for a genuine exchange of views and not merely as a channel for passing
information on decisions already taken; and

d. make arrangements to keep all employees informed about the committee's

discussions.

Dated at Kuala Lumpur, this 9th day af February, 1975.

(SGD) (SGD)

------------------------ ------------------------

Tan Sri Senator Gan Teck Yeow Dr P. P. Narayanan

(SGD) (SGD)

------------------------ ------------------------

Tan Sri Senator S. O. K. Ubaidulla Encik T. Narendran

(SGD) (SGD)

------------------------ ------------------------

Encik J. F. Philips Encik S. J. H. Zaidi

(SGD) (SGD)
------------------------ ------------------------

Encik W. Fernando Encik Yahaya b. Mohd. Ali

(SGD)

------------------------

Puan John Gurusamy

(SGD)

------------------------

Encik Zainal b. Rampak

Malayan Council of Employers' Organisation Malayan Trade Union Congress

(SGD)

------------------------

(DATUK LEE SAN CHOON, S.P.M.J., K.M.N)

Menteri Buruh dan Tenaga Rakyat,

Malaysia

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2. Current Scientific Concepts of Industrial Relations

It seems to be useful to refer to earlier reflections on structure and regulation of industrial

relations as a societal phenomenon in order to answer the above mentioned question. This
implies first to look for a theory of industrial relations or at least a collection of doctrines
concerning industrial relations. Baser on the contents of these the second question has to
be discussed, namely whether a special feature of cooperative industrial relations results
from such theories or whether such peculiarities could be subsumed under the existing
theoretical approaches.

Industrial relations as a typical social phenomenon of the early industrial society with
division of labour was soon discovered as an interesting study subject by different
scholars. The earlier studies, e.g. by Beatrice and Sydney Webb(1) are mainly found in the
Anglo-Saxon world where industrial relations were understood relatively early as a
separate subject of social science research. In the German-speaking area, the relationships
between employer and employees were also examined in the context of studies of the
"social question" by scholars of economics and sociology. However, no special study
subject or degree-course was created as it has been the case at English universities. The
phenomenon was completely ignored in Germany between 1933 and 1945. After the
foundation of the Federal Republic of Germany, the relationships between employers and
workers have been subsumed under the wider complex of problems of company
constitution and regulations of co-determination. Studies were mainly of a legal nature in
connection with the developing legislation and jurisdiction in these areas.

As of 1970, a small group of scholars of economics, management science, law and social
sciences formed the German section of the International Industrial Relations Association
which was co-operating closely with this international organization, very much linked to
the ILO. In 1991, the section was officially recognized as a part of the IIRA. In 1985, this
group of researchers published a first "Handbuch der Arbeitsbeziehungen" (Compendium
of Industrial Relations) for the German-speaking countries (Germany, Austria,
Switzerland).(2) Although industrial relations are for the time being not yet recognized as a
study subject in the economic and social degree courses of German universities, in some
degree courses, industrial relations can be chosen as a voluntary subject, yet under
different titles. It is therefore not surprising that the development of theories in the area of
industrial relations is on a relatively low level compared with other disciplines. It was
only during the seventies, when the until then harmonious relationship between the
collective bargaining partners became more conflicting as a consequence of the economic
depression that it was found interesting to deal also theoretically with the topics of
industrial relations. But even then, scholars referred mainly to Anglo-Saxon approaches.
The classification by Schienstock published in the above mentioned Handbook in 1985
can be seen as valid even now. According to him, one has to distinguish between three
fundamental approaches to industrial relations:

The systems approach,

The action-theoretical (interactionistic) concept,

The Marxist approach of political economy.

The systems approach had been formulated by Dunlop (1985), and was later on modified
by the "Oxford Approach".(3) The further development by A. W. J. Craig(4) goes in the
same direction. It was the merit of the systems model by Dunlop that for the first time the
industrial relations between the relevant actors were convincingly grasped and presented.
This explains that his model based on a more institutional approach deals more with the
fundamental relationships than with the processes of their creation and subsequent
changes.

The criticism of this aspect of the model led to the development of an action-theoretical
approach in the sense of the inter-organization theory. (5) The emphasis of this study was
on the explanation of the behaviour of the interaction partners in the bargaining process.
In this context, one referred to the wage theory of Hicks. Other authors, however,
criticized the one-sided view of the distribution struggle and drew attention to the much
greater complexity of the bargaining processes. Finally, Walton and McKensie pointed out
that also within the actors themselves processes of decision making were existing which
influenced the bargaining processes between the actors. Thus, Schienstock concluded that
in spite of the fact that many interesting single aspects of this phenomenon existed, in
summary, the action-theoretical approach had only been developed fragmentarily. The
Marxist analysis of industrial relations has been presented by the Britain Hyman during
the second half of the seventies. He inevitably starts from the hypothesis of a
fundamental conflict in the industrial relations and opposes logically all integration
models. From his point of view, the concrete structures of labour relations and the forms
of conflict settlement can only be explained in an appropriate way on the basis of the
political economy of Marx and Engels. This linking of the approach to the theorem of an
fundamental antagonism of classes hampers, however, the study of the relevant
prerequisites and processes of societal integration, even from the point of view of the
trade unions.(6) Therefore, we will refer to the systems approach in dealing with the
special question of this study concerning the particularities of industrial relations in
cooperatives and related organizations. The Dunlop-model of industrial relations system
is appropriate as a basis for a suitable extension. By simple modifications of the model's
structure the particularities of cooperatives can easily be explained.

3. Dunlop's Industrial Relations System