INDUSTRIAL DISCIPLINE-FROM SHOP-FLOOR TO BOARD ROOM - A

PERSONNEL RESPONSIBILITY
Director Abishegam Holdings Sdn. Bhd. SAM ABISHEGAM MANAGING
INTRODUCTION

In Malaysian commerce and industry,

the gradual departure from protective legislation
(originally meant primarily for our plantation and
mining sectors) to the promulgation of today's
modern labour laws, changes the scenario of
personnel management and industrial relations
considerably. The whole spectrum of disciplinary
procedures and practices in the place of employment
from the shop floor to the board room with its
manifold implications of the human resources in the
enterprise, needs to be thoroughly reviewed so that
the incidence of breakdown in industrial relations
can be minimised, and the work process can continue
in an atmosphere of cordiality, stability and
efficiency. Discipline in the private sector needs
to be emphasised just as it is being done in the
public sector. The implications are so far-reaching
as to affect national productivity and therefore the
country's prosperity.

GUIDELINES

The prime importance of understanding and

implementing the legal and moral aspects of
industrial discipline should be foremost in the
minds of managers generally, and personnel
practitioners in particular, when we discuss human
resources and their value to the organisation which
employs them.

Whilst people are regarded as the greatest assets in

any enterprise, it is the same people who, if not
properly motivated, adequately compensated, and
productively employed, can become liabilities
instead. Hence, ensuring their loyalty and
co-operation is imperative to the organisation so
that all other technical functions of management can
be smoothly implemented. The objective of any
organisation should then be to reinforce the need
for the proper conduct of its managers and workers
by willing acceptance of and conforming to rules and
regulations which will assist as guidelines to
orderly conduct of all concerned, so that in a
climate of tranquility, amity and harmony, work will
not be unduly hampered or disrupted.

MANAGEMENT RESPONSIBILITY

Industrial discipline, like discipline enforced in

other segments of society, is vital for the creation
and maintenance of law and order in the place of
employment. And there is no doubt that the
responsibility for maintaining effective discipline
from the shop floor to the board room in any
enterprise falls fairly and squarely on management,
which in close collaboration with employees or their
trade unions, enforces rules, regulations and
procedures by taking positive disciplinary action
whenever and wherever necessary to ensure systems
and order in the work place.

Otherwise the law of the jungle, resulting in chaos

and disorder will prevail, and a breakdown in
industrial relationships will be imminent,
disrupting stability within and without the
enterprise which will affect the economy.

DEFINITIONS

Discipline, though not statutorily defined, has

three basic messages:

Firstly; that it is training that corrects,

strengthens or perfects; secondly; that it is the
control given by enforcing obedience and thirdly; it
means punishment or chastisement.

Let me hasten to clarify that the third meaning to

punish or chastise is the result of the inability by
management to change the persistent employer from
committing infractions. The purpose discipline is
corrective and not punitive.

Unfortunately, in the context of personnel

management, the mere mention of the word
'discipline' conveys the harsh connotation of the
third meaning, which is neither pleasant nor welcome
to the ears of employees since they regard it as a
polite word for sanctions, which in their minds may
be related to such consequences of disciplinary
action as warnings, suspensions, demotions and
perhaps eventual termination from employment.

DEMOCRATIC PROCESS

The organisation cannot be effective, whether it is

a school club, society, religious institution or
even a political party, unless it has rules and
regulations governing its objectives and functions,
and discipline is an integral part of those rules of
conduct.

If a country had no laws which Parliament enacts,

there will be chaos. lf a home has no unwritten
rules of conduct, children can become delinquent. We
notice that even political parties with tight rules
of discipline are being challenged in the courts
with injunctions and counter-injunctions. This is
part of the democratic process. So is it in
industry. Settlement of disputes arising out of
breaches of discipline start at the shop-floor level
and can be taken for redress up to the Industrial
Court for arbitration as provided for in our labour
legislation, if not settled through the various
processes of negotiation and conciliation.
Nonetheless, disputes due arise and unless dealt
with expeditiously, can and do lead to work
stoppages such as strikes or lock-outs, overtime
bans, work-to-rule, sit-down strikes and protest
demonstrations, picketing and so on. Conflict, as a
consequence of indiscipline and differing opinions,
arises in all walks of life, and industry is no
exception.

But a difference of opinion in industry centres

essentially around some aspect of a person's
livelihood and for this reason assumes tremendous
importance, very easily leading to tension and
acrimony.

In the normal course of events, citizens who breach

discipline by breaking the laws of the country -as
established by Parliament-are charged by the Police,
and later the pros or cons of the accusations are
heard before a Magistrate's Court where the verdict
is reached.

In industry too, disputes are heard at the highest

level in the Industrial Court but only after the
Minister of Labour is satisfied that the dispute
cannot be settled at lower levels-the plant or his
Ministry offices. Thus, there is this tripartite
involvement from the time the dispute is sparked off
until the action to redress the grievance. Grievance
machinery is thus an important means of dispute
settlement and is usually part of the disciplinary
policy formulated by management and agreed to by the
trade union.

COLLECTIVE BARGAINING

In Malaysian commerce and industry, where collective

bargaining at national or plant level is operating,
both labour and management regulate their industrial
relations through periodical agreements which are negotiated generally every
three
years or so. The Collective Agreement usually
incorporates disciplinary and grievance procedures
whereby discipline is meted out in accordance with
the principles of natural justice. The provisions in
the Collective Agreement covering employees in the
bargain able categories supersede any other contract
on Terms and Conditions of Employment including
provisions on disciplinary matters.
In my own experience, I have come across a number of
Malaysian firms whose supervisory staff, supposed to
be part of the management team, are blissfully
ignorant of the contents of Collective Agreements
that their top management and the Personnel
Department have signed with the trade union
concerned. Many cases of non-compliance with such
Agreements have been the subject of hearing in the
Industrial Court because not all management and
supervisory staff were aware of the provisions,
specially disciplinary provisions, in the Collective
Agreement and unintentionally overlooked them in
their implementation. This, the trade union
considers a violation of the provisions of the
contract and appeals to the authorities for hearing.

It is the responsibility of the Personnel Department

in these establishments to ensure that once
Collective Agreements are signed, all personnel from
first-line supervision upwards must be made aware of
the contents of such Agreements, specially in
relation to grievance handling and disciplinary
provisions. As far as possible industrial friction
can be most speedily and effectively dealt with by
the people closely involved and informed even at
shop-floor level. Otherwise it would be unreal,
time-absorbing and frustrating if these problems had
to be referred to outside institutions, to be
resolved by legal processes.

PROPER CHANNELS FOR GRIEVANCE HANDLING

The starting point for disciplinary action to

commence must be at the level where it commences-
where the work is done and the infraction took place
at the shop-floor. If an individual employee has a
query, he must raise it first with his immediate
supervisor-the foreman and so on through the proper
channel. Many managers conveniently leave any
'disciplinary problem' to the Personnel Manager
expecting him to perform miracles overnight. Each
manager or supervisor at the shop-floor level has a
personnel responsibility to carry out. If the worker
fails to get satisfaction, then he refers it to the
trade union representative in appealing to higher
management. In theory, the appeal could be
continued step-by-step through the management
hierarchy up to the Chief Executive. But in most
cases, the probability of the case being settled at
the various intervening levels with the help of the
Personnel Department is present. Only in the event
of a complete deadlock at this stage, should both
parties conform to the constitutional procedure to
its appointed end (through conciliation and
arbitration) before resorting to any other type of
industrial action.
There are then the other occasions when both
management and unions will try to resolve problems
on a basis of common sense and the immediate facts
of the situation as an alternative to meticulously
sticking to full constitutional procedure. They
generally fall back on the services of the State
through the Ministry of Labour which can step in to
conciliate.

It is extremely important to establish proper lines

of communications so that work people know what is
happening and so share a sense of common purpose in
the enterprise whilst industrial friction is on.
This is all the more vital at the shop-floor where
communication should be clear, simple and to the
point.

CORRECTIVE MEASURES

In the day-to-day practice of industrial relations,

discipline should largely be concerned with measures
to rehabilitate subordinates with a view to making
them conform with desired standards of conduct. This
'corrective discipline' is intended as preventive
action for future misdeeds and also an expression of
desired performance.

However, management's duty is to ensure that the

Rules and Regulations in the conduct of an
employee's performance and attitude are reasonably
framed. It is part of a manager's jurisdiction to
enforce discipline, otherwise, any manager who
shirks or avoids this responsibility is failing to
manage. Worse still, if violations of rules are not
promptly and effectively dealt with, disrespect for
order and control will spread to other employees who
would ordinarily comply with them, as most employees
generally are law abiding and work respecting rules
of conduct.

DISCIPLINE AT MANAGEMENT LEVEL

What about discipline in the Boardroom and at the

managerial level? With the gradual advent of trade
unions for executives and supervisors, there are
bound to arise industrial relations issues with the
supervisory personnel. In addition, these higher
grades of staff are also human and can succumb to
infractions. Hence the yardstick used to solve
disciplinary problems amongst rank and file
employees should be equally used to measure up
similar problems with executives too.

In this area of discipline every manager becomes a

'Personnel Officer'. He knows his men or women best.
He is in daily contact with them at the workplace or
office and is conscious of the disciplinary climate
in his own unit or department. He should therefore,
be able to take preventive action before any small
problem develops to proportions that cannot
controlled. And when it bursts in his face, then it
too late. So whilst accepting personal
responsibility for discipline, there should be
constant dialogue between line and staff managers
with the Personnel expert who is there to advise and
assist in preventing problems from arising.

Communication channels from the Boardroom down to

the shop-floor must remain open and free from being
clogged. Only then can information flow freely
between management and workers so that discipline
can be effective maintained jointly.

It is therefore, errorneous to think that discipline

is applicable only to shop-floor employees and
clerical subordinates in an organisation, whilst the
supervisory, executive and managerial personnel as
well as Directors in the Board are exempt from
disciplinary action.

LEADERSHIP BY EXAMPLE

In fact, "Kepimpinan Melalui Teladan" is an apt

slogan currently enforced in the public sector,
referring to "Leadership by Example". This means
that the managers have by example to set the lead
for people they supervise. You cannot have one rule
for the manager and another for the rank and file
worker as far as certain disciplinary traits are
concerned, especially in the areas of moral
turpitude, dishonesty, fraud, tardiness, absenteeism
and such employment conditions. Of course, depending
on the degree of the infraction, the penalty should
be imposed, but certainly no discrimination should
be practised when it comes to disciplining employees
which would in the definition include top
management, including a Managing Director who is
also in effect an employee.

I recall a specific instance in a collective

bargaining session when the chief executive of an
organisation was, much to his embarrassment
questioned about "consumption of liquor on the
premises or alcoholic drinks being brought into the
premises.". This clause was being hotly debated and
pressed for inclusion in the collective agreement by
the management, forgetting its general application
to all personnel in the Company. The trade union
negotiators quite forcefully agreed to the inclusion
of this clause so long as the expatriate senior
director of the Company was prepared to discontinue
serving himself and his visitors liquor from the
mini-refrigerator in his office suite during working
hours. This, the union argued went against the
proposed rule because the top executive brought
liquor to the premises and also consumed it within
the premises. This certainly was an acutely
sensitive point but indicates the real meaning in
practice of the "Leadership by Example" slogan.

As management is held responsible for enforcing and

maintaining discipline within the enterprise, its
representatives should be splendid examples of
disciplined leadership. Hence, from the shop-floor
to the boardroom, principles regarding discipline
should be zealously safeguarded. The managers should
be above board before they can discipline their
subordinates. They should practise what they preach.
Only then can discipline be implemented without fear
or favour.

PRINCIPLES OF NATURAL JUSTICE

One feature of Malaysian industrial cases of

discipline which our Industrial Court has cause to
comment on is the manner in which Malaysian firms
have handled their 'Domestic Enquiries'. The
criticism has been directed to employers who
disregard the need to comply with the principles of
Natural Justice. These strictures in the Court
Awards have made some managements somewhat
apprehensive of the meaning and implications of the
phrase "Natural Justice". There is however nothing
forbidding about it because, in essence, it stands
for fair play in action and corrective discipline .

The full and correct expression is the "Rules of

Natural Justice" which lays down the minimum
standards of fair decision-making imposed by the
Common Law on persons and bodies who are under a
duty to act judicially. There are two fundamental
rules of Natural Justice, both couched in Latin
viz:

(i) Nemo Judex In Causa Sua meaning No one is to be

a Judge in his own case

(ii) Audi Alteram Partem meaning Hear the other side

The first rule that no one must be a judge in his

own cause or adjudicate in any matter in which he is
interested.has two main aspects. First, the
adjudicator must not have any financial or
proprietary interest in the outcome of the
proceeedings. Secondly, he must not be reasonably
suspected, or show a real likelihood of bias.

In its first aspect, the rule is very strict. No

matter how small the adjudicator's interest maybe
and no matter how unlikely it is to affect his
judgement, he is disqualified from acting and the
decision in which he has participated will be set
aside unless:

(i) The parties are made fully aware of his interest

in the proceedings and they clearly waive

their right to object to his participation or

(ii) He is empowered to sit by a special statutory

dispensation or

(iii) In very exceptional

circumstances, all the available adjudicators are
affected by a disqualifying
interest, in which case they may have to sit as a
matter of necessity;

Without going into technicalities, this rule looks

to the appearance of the matter to an outsider.
Thus, if there is in fact, a real likelihood of
bias, the adjudicator must disqualify himself.
Actual bias need not be proved.

The second rule is the more important one. It means

that no one shall suffer a penalty unless

(i) he has been given prior notice of the charge or

the case he has to meet; and

(ii) he has a fair opportunity to answer the case against

him and to put his own case in reply to it;

It is this second rule of Natural Justice that

features strongly in our Malaysian employment
domestic enquiries. If such an enquiry is to be held
in respect of misconduct by a worker, he must be
given notice thereof in terms which will
sufficiently convey to him the essence of the case
he has to meet so that he can prepare his response.
He must not, therefore, be taken by surprise or be
denied reasonable opportunity to prepare his
defence.

"DUE ENQUIRY"

Without being too legalistic of this requirement for

discipline, there is yet another phrase "due
enquiry" which needs some clarification as to how
employers must conduct enquiries under the
Employment Act. Certain procedural guidelines and
principles were laid down by two Industrial Court
Awards as follows:

(i) that the enquiry be commenced as early as

possible;

(ii) that the employee concerned be given

particulars of the alleged misconduct, in writing,
if necessary;

(iii) that the employee be given reasonable time to

prepare his case; (iv) that the employee, if he
requests, be given the opportunity to be represented
by his trade union official at the enquiry;

(v) that as far as possible the person conducting

the enquiry should be free from bias and have
no personal interest in the case;

(vi) that the employee be given every opportunity to

cross examine all witnesses produced, if he so
wishes.

As you will see, all of them are consistent with the

rules of natural justice. Thus the law requires that
a domestic inquiry be held so that "only after due
enquiry" can an employer take action to:

suspend

demote or

dismiss

an employee.

EASTERN WORK ETHICS

In pursuance of the "Look-East" Policy, it is

heartening to note that hundreds of Malaysian
workers return from training in Japan and Korea with
understanding of work ethics, especially industrial
discipline. But to implement them at home, they
sometimes find that even in Japanese and Korean
companies, the industrial climate is not that
conducive to the application of such work ethics and
discipline. For one thing, management does not have
the same attitude and philosophy like Korean or
Japanese management and hence the environment does
not lend itself to implementing Japanese work ethics
and discipline. Should not managers too need similar
training to see how Korean and Japanese management
regard discipline and work ethics so that on the
same wave length both sides of industry can be tuned
in to act harmoniously and spontaneously. Managers
should also look East.

NATIONAL LEVEL DIALOGUE

In its broadest sense, industrial relations

including discipline, extend from management-labour
contacts at the level of the undertaking to
participation by employer organisations and trade
unions at national level in assisting to plan and
implement our country's social policies.

Currently whilst contact at the level of the

undertaking is somewhat satisfactory, the contacts
at the national level are not of the same warmth,
sincerity and regularity as is desirable. The
previous bi-monthly meetings of labour and employer
leaders with the Ministry of Labour's assistance
appear to have discontinued. These dialogue
sessions, although there were differences, have been
severed. With no proper and regular communication,
this gap does not augur well for industrial harmony
in the future.

CODE OF CONDUCT

The Code of Conduct for Industrial Harmony remains

much preserved gathering cobwebs in the shelves of
board-rooms of employer and trade union
organisations. Except for the occasional Ministry of Labour
sponsored meetings, dialogue is not
as voluntary, spontaneous or continuous as before
where many a crucial discussion helped to avert
industrial crisis.

No doubt internal organisation problems beset the

organisations concerned, but deep down these are
more personality conflicts rather than
organisational. Both employer organisations and
trade union central centres need to put their houses
in order to be able to represent their respective
interests with one voice, especially in labour
forums internationally. Discipline appears lacking
somewhere deserving a new approach and review by the
tripartite leadership in industrial relations.

COMMUNICATION AND UNDERSTANDING

All said and done, the importance of understanding

the legal and moral aspects of discipline should be
appreciated by senior managers and personnel
practitioners whose prime duty is to ensure that
there exists Rules and Regulations at the level of
the undertaking for the conduct of employees which
are easily understood and conveyed to all from the
shop-floor to the board room.

EXAMPLE BY MANAGEMENT & LABOUR

Lastly, let us remember the slogan "Management by

Example". You cannot justifiably reprimand a worker
for being late to work, when you or your manager is
in the golf course during working hours. If both
labour and management can together work for ensuring
discipline at all levels from shop floor to the
board room, then the enterprise concerned starts to
gain profitably and the nation too in turn becomes
prosperous.