The Industrial Relations System in Malaysia

Prior to 1965, the voluntary system of industrial relations patterned along the British system was in practice. Under such system, the concept of self-government and autonomy within industry was the key to industrial harmony. The two sides of industry were encouraged to regulate their collective relationship and to settle any dispute arising there from through their own efforts and through mutually agreed procedures, with minimal State intervention, such intervention being confined mainly to providing a legal frame-work to which the parties could turn to if they so wished, in accordance with the Industrial Courts Ordinance, 1948 and the Trade Disputes Ordinance 1949.

The Industrial Courts Ordinance provided for the promotion of peaceful and voluntary settlement of trade disputes through conciliation by a third party or through the voluntary reference of a dispute to the Industrial Court for arbitration. The Trade Disputes Ordinance provided the Government with supervisory powers to maintain vigilance over trade disputes and certain matters arising from such disputes so as to ensure and safeguard the interests of the public generally.

According to Public Service of Malaysia Government, in September 1965, the Essential (Trade Disputes in Essential Services) Regulations, 1965 were promulgated. It was designed to ensure that trade disputes in certain scheduled services would not lead to disruption of such services. These Regulations vested in the Minister of Labor certain powers to intervene of his own volition in such disputes and if necessary, to refer them to the Industrial Arbitration Tribunal for settlement. No strike or lock-out could be declared or where already declared could continue once the Minister had so intervened.

The award of the Tribunal was final and legally binding on the parties to the dispute. The promulgation of the Essential (Trade Disputes in Essential Services) Regulations in 1965 was indeed a turning point in the pattern of industrial relations system in the country. For the first time an element of compulsory concept was introduced into the system regulating the relationship between management and labor.

Subsequent to the promulgation of the Essential (Trade Disputes in Essential Services) Regulations,1965 the Government conducted a review of the then existing law and practice in the field of industrial relations which resulted in the substitution of the previous laws by the Industrial Relations Act, 1967. This Act came into force on Th August 1967 and is applicable throughout Malaysia. The Act retains most of the principles and practices as set out in the repealed legislation and continues to promote the voluntary system up to the point where Government intervention is necessary so that the ever present public and national interest are not prejudiced while the parties promote their own respective interests. Industrial System in Malaysia.