HRM 659

INDUSTRIAL RELATIONS

CHAPTER SIX :
COLLECTIVE BARGAINING

Prepared by :
SUHAILA MOHAMED
UiTM Puncak Alam
MAR_JULY 2022
 Chapter outline

6.0 Collective Bargaining Procedures

6.1 Concepts of collective Bargaining

6.2 Scope of representation
6.3 Pre Conditions for Collective Bargaining
6.4 Collective Bargaining Process
 Deciding on Terms and Conditions of Employment

Wages and other terms of employment can be

decided by:
 Unilaterally, by the employer
 Bilaterally or jointly by the employer and the
representatives of employees
 Legislations
 Inclusion in the Employer’s Decision Making

 If employees are unionized, they gain the right to

be included in the employer’s decision on the terms
and conditions of employment through the process
of collective bargaining.

 The outcome of collective bargaining is a collective

agreement.
 Collective Bargaining

 IRA 1967 defines Collective Bargaining (CB) as negotiating

with a view to the conclusion of a Collective Agreement (CA).

 The rights of the workmen to bargain collectively with the

employer on terms of employment and conditions of work as
well as to collectively withhold labor to back up the process of
CB.
 Pre-Conditions

For effective bargaining:

1. Workers must have the right to form collective associations
(Chap 4):
• Workers must have the right to form the join trade unions.
• Trade union activity is legal within the limitation set by the law.
• CB could not take place without this right.
 Pre-Conditions (Cont.)

2. Unions must have bargaining strength:

• Recognized by the employer (Chap 5)
• Has adequate financial strength.
• Members are united.

3. Bargaining in good faith.

 Managerial Prerogatives
(Sec 13(3) of IRA)
 However, there are non-bargainable matters (managerial
prerogatives) in collective bargaining:
a. The promotion by an employer of any workmen from a lower
grade or category to a higher grade or category.
b. The transfer by an employer of a workmen within the
organization.
c. The employment by an employer of any person that he may
appoint in the event of a vacancy.
 Managerial Prerogatives (Cont.)

d. The termination by an employer of the services of a workmen

by reason of redundancy.
e. The dismissal and reinstatement of a workmen by an
employer.
f. The assignment or allocation by an employer of duties or
specific tasks to a workman.
 Bargaining Levels

Collective bargaining may be conducted:

o At industry level whereby employer’s union and
national employees’ union negotiate
o At company level whereby employer negotiates with
national employees’ union
o At company level whereby employer negotiates with
in-house employees’ union
 Union
Unionpresents
presentswritten
writtendemands*
demands* IfIfemployer
employeragrees,
agrees,the thefirst
first Bargaining
Bargainingcontinue:
continue:Non-
Non-
[S. 13 IRA] and employer shall reply bargaining session
bargaining session shall shall controversial items where
controversial items where
[S. 13 IRA] and employer shall reply
within commence
commencewithin
within30 30days
daysofof agreement
agreementisisreached
reachedare
within1414days
days[S.[S.13(4) of IRA]
13(4) of IRA]
cleared
are
acceptance
acceptance[S.[S.13(5) of IRA] :
13(5) of IRA] : clearedfirst.
first.
union explains its demands
union explains its demands
and
andmanagement
managementpresents presents
counter
counteroffer.
Col Otherwise:
Otherwise:Union
Unionmay may
offer.
notify DGIR [S. 13(6) of IRA] for Bargaining
Bargainingover
over
lect notify DGIR [S. 13(6) of IRA] for
conciliation controversial items
conciliation[S.[S.1818ofofIRA]. controversial items
ive IRA]. (Economic
(Economicitems)
items)
Agreement
Agreementisisreached,
reached,put
putinin
Bar writing
writingand
andsigned.
signed.
gai IfIfemployer
employerstillstillrefuse
refusetoto
nin start
start bargaining,this
bargaining, Deadlock:
situation
this Deadlock:Breakdown
Breakdowninin
g situationisisaatradetrade Conciliation
Conciliationmeeting
meetingheld
heldtoto
negotiations.
negotiations.Parties
Parties
dispute
dispute[S.[S.13(7) of IRA]. refuse
Pro 13(7) of IRA]. resolve trade dispute.
resolve trade dispute. refusetotocontinue
continue
negotiations.
negotiations.
ced
ure
* The demands must not
s include managerial IfIfno
noresolution,
resolution,dispute
disputeisis
prerogative [S. 13 (3) IRA] referred
referredtotoIndustrial
IndustrialCourt
Court
for arbitration.
for arbitration.
 Definition of Terms

Conciliation is a process in which the Department of Industrial Relations in

the Ministry of Human Resources acts as a neutral mediator to help the parties
to a dispute find a settlement.

Deadlock is a breakdown in the process of collective bargaining where the

two parties are unable to reach an agreeable compromise over the terms to be
included in a collective agreement.

Arbitration is a process of settling worker-management disputes by having an

impartial third party (the Industrial Court) make a decision which is binding
on both parties.
 Collective Bargaining Cycle
Preparation

Negotiations Collective Agreement

Implementation of the
Collective Agreement

Disputes Settlement

Preparation

Negotiations Collective Agreement

 Bargaining Team

 Membership of bargaining team will vary depending on the

situation.

 Will be responsible for all preparation prior to negotiations and

during negotiations.

 What are the characteristics of effective negotiator?

 Preparation for CB
Prior to commencement of negotiations, both
parties will:
 Decide who shall represent them
 Collect information about the other party’s strengths and
weaknesses
 Collect economic data
 Get a mandate from their principals
 Decide on strategies and tactics
 Collection Of Information
1. Know the opposition
 Financial strength.
 Total membership.
 Power structure and personality of union leaders.
 Any internal problems.
2. Economic condition
 The union demands will depend on the financial capacity and
profitability of the company.
 In class exercise

In your group, identify 3 points as suggested by Rabiu and

Kamal (2006) that hampering Malaysian employees from their
rights to bargain collectively.

E-mail your group answer to suhaila423@uitm.edu.my during

the class time