Trade Unions in Malaysia
Trade unions have traditionally been regarded as important
instruments for protecting workers' interests at workplace.
However, the decline in union density worldwide in recent times seems to
signify a weakening of their influence (Aminuddin 2008, Bramble 2001,
Benson & Zhu 2008, Heery 2002). Membership decline, structural
changes in employment, management practices, membership participation
and democracy, the legislative framework, and the political influence of
unions have been under scrutiny in the developed countries (Waddington
& Whitson 1993). In addition, trade unions are confronted by
economic factors, generally beyond their control, such as threat of
capital flight, and overseas competition. The Malaysian trade union
movement is in such a predicament and it can be argued that the movement
is faced with a number of challenges from changing labour market
structure and neo-liberal policies. Todd and Peetz (2001) argue that
overall Malaysia's industrial relations remain firmly within the
'control' rather than the 'commitment' framework.
The state interventions remains pervasive, managerial control in the
workplace continues to dominate and labour's ability to bargain
collectively remains restricted. The provisions in legislations such as
the Trade Unions Act 1959 and the Industrial Relations Act 1967 have
made it very difficult for workers to organise themselves.
Industrial relations practices (including employment practices) in
Malaysia have changed and continue to evolve since the general unionism
from the 1920s to the defeat of the Communist trade union movement in
1947-48, and industrial unionism from 1948 until the eighties--when it
now faces the prospect of being replaced by enterprise unionism. Various
amendments to the legislation linked to employment and industrial
relations, and industrialization strategies since the post-Independence
years (1957 and beyond) have had a marked effect upon the activities of
the employers and the trade unions. This has necessitated a careful
examination of the extent of change in industrial relations in Malaysia.
Attention has focused on two areas: first, the decline in the strength
of organised labour as evidenced by a variety of statistics and second,
the driving forces for this change.
Trade union density in Malaysia was 9.35% in 1990 (Ministry of
Human Resources 1991), dropped to 9.24% in 1995 and 7.87% in 2000
(Department of Trade Union Affairs 2003, Department of Statistics 2006).
Despite a slight increase to 8.5% in 2002, density has seen an overall
decline in the subsequent years, to 7.7% in 2006 and to 7.45 per cent in
2008. Average membership per trade union dipped from 1,401.3 in 1995 to
1,317.4 a decade later. The slide in the average members per union
continued from 1,296 in 2006, to 1,248.9 in 2008. While absolute union
membership has continued to increase over the years, the average
membership per union has continued to decline, which points to the trade
union movement having many unions with small membership size. One would
wonder at this point whether trade unions are a necessary institution.
Josey (1958: 89) concluded that "without strong trade unions,
Malaya is almost certain either to go communist or else degenerate into
some form of authoritarianism". Even if one does not agree entirely
with Josey's views, short span of history has indeed shown that
trade unions have played an important role in industrial harmony.
However, questions have been raised, ever so often, on their relevance
by employers as the literature have revealed.
There have been research works on the Malaysian labour movement
(e.g. Anantaraman 1997, Arudsothy 1988, Bhopal 2001, Jomo 1995,
Kuruvilla 1995, Parasuraman 2004), but most of the studies have taken on
a qualitative approach, with limited primary research to support the
assertions. Empirical studies on the Malaysian trade unions, and in
particular the perceptions of employers in unionised companies are
lacking despite its importance to current debate on trade unionisation.
Thus we examined the problems and issues, and reasons for the decline in
trade unions movement in Peninsular Malaysia.
Debate on Trade Unionism
According to Hyman (1989:12), employers create internal mechanisms
for the purpose of challenging workers' collective identification
with unions. Fewer employers consider the need to use union to mediate
their dealings with employees, reflecting an antipathy to unions
(Gilbert 1993). Similarly, Kelly (1996) argued that there is a growing
readiness on the part of employers to bypass trade unions and reduce the
range of issues over which they have influence. Gall and McKay (2001)
suggests that employers may use suppression strategy or the substitution
strategy to make the organisation union-free. Employers using the
suppression strategy create an atmosphere of fear and through
intimidation they aim to sabotage or put an end to existing or expected
attempts at union organisation and requests for union recognition or at
the least, prevent unions from getting to a critical mass. Actions such
as sackings, dismissals and redundancies seek to try to prevent or stop
union office bearers from being active in dealing with members'
concerns, organising meetings, producing publicity material and
recruiting new members. The substitution strategy, on the other hand,
seeks to make the organisation 'an issue-free company'. The
employer attempts to convince workers that the union is redundant, and
that there are no contentious issues, and even if these should arise
they can be easily resolved to the satisfaction of both the parties. In
doing so, the employer is being seen to resolve grievances. Employers
also attempt to establish 'independent' and non-union related
mechanisms for resolving grievances and giving expression to employees
'voice' (Gall & McKay 2001).
In Malaysia, Aminuddin (2003) and Ramasamy and Rowley (2008)
declare that employer opposition to unionisation is common and the state
is reluctant to challenge such opposition. They explain that
employers' tactics have included indefinitely delaying union
recognition applications, victimising or promoting activists to remove
them from the shop-floor and forming company-sponsored in-house unions.
The problem of union recognition, or rather the lack of it, by employers
has been a long-standing one, with unionists accusing employers of
intentionally delaying recognition of unions while using allegedly
unfair practices to dampen unionism in the workplace (The Star 1996).
Sometimes, employers delay union recognition by challenging the right of
particular unions to represent their employees. Such delays undermine
the unions' standing and effectiveness; having recruited the
members, they remain unable to represent them until accorded official
recognition. The sustained opposition of many employers to unions
continues to undercut trade unionism in Malaysia, argue Jomo and Todd
(1994: 35). Union recognition, according to Gall and McKay (2001: 94),
"is a highly sensitive issue because it provides the potential for
collective organisation to infringe upon managerial prerogative in order
to defend and advance workers' terms and conditions of
employment". They add that union recognition is particularly
relevant where managerial values are increasingly becoming
'non-union'.
Many employers ignore workers' interest and practice a biased
personnel policy and in doing so be inclined to breach the labour laws
(Aminuddin 2003). Dependency theory argues that multinational companies
in search of low labour costs and weak labour organisation lead to the
suppression of trade unionism owing to the dependent states'
relative powerless vis-a-vis multinationals. This situation is
reinforced by inter-state competition to provide an attractive site for
inward investments (Bhopal 2001). In the development decades of
Malaysia, the state's accommodation of multinational, particularly
antiunion, American corporations has further exposed the implications of
state dependency, adds Bhopal (2001). Management generally does not
welcome the interventions that unions impose on decision-making
discretion and authority.
The presence of labour unions in the workplace has both good and
bad points as far as business and society are concerned. Union leaders
often accuse corporate heads and management of overemphasising profits,
return on equity and earnings per share at the expense of the welfare
and dignity of employees. Those on the management side believe that
unions are bent on destroying free competition and enterprise. Neither
statement is entirely accurate, although both contain some element of
truth (Leap 1995). Savant (1990: 12) emphasised that "closures,
sickness, lockouts and layoffs are more on account of mismanagement,
internal disputes of the management, unhealthy competition and
questionable practices indulged in by the management". According to
Rajasekaran (2002), the Secretary General of MTUC, there are increasing
anti-union activities by major corporations. They are demanding for the
removal of legal safeguards that provide employment security to workers
on the ground that removal of these safeguards is essential to face the
increasing global competition. There is also mounting pressure on the
government to weaken collective bargaining on wages and working
conditions, to limit wage adjustments, to remove the tradition of paying
annual bonus and to legalise discriminatory practices against foreign
workers. Workers have to be protected from unscrupulous employers,
states Aminuddin (2003). As such, trade unions have to play their role
effectively.
There is evidence of some employers, particularly amongst the
larger companies, introducing more modern management techniques in
Malaysian workplaces. These include new methods of work organisation,
inventory management and quality control. Multi-skilling is more
prevalent and the working week is made more flexible to match the needs
of production (Todd, Lansbury & Davis 2004). Kuruvilla and Erickson
(2002) argue that as product markets became more globalised, the threat
of communism weakened, and radical unions and parties declined, labour
peace became less of a priority. At the same time, increased
international product market competition has made cost reduction on the
shop-floor imperative. Such cost reductions often involved increased use
flexible approaches such as layoffs, temporary workers and
sub-contractors. The focus is on the efficient deployment of labour,
that is, reduced wage and non-wage costs. Employers see trade unions as
barriers to efforts at restructuring their workforce. Lower
unionisation, in line with the flexibility thesis (McGregor &
Sproull 1992), becomes a strategic thrust of employers.
Research Methodology
The survey sample was drawn from the Malaysian Trade Union Congress
(MTUC) and Malaysian Employers Federation (MEF) membership databases and
included the employees (non-union members) and employers (represented by
the human resource or the industrial relations/employee relations
managers, or their representatives) at each workplace across different
industrial sectors, namely: agriculture, transport and storage,
wholesaling and retailing, hotels and restaurants, manufacturing,
telecommunications, finance and insurance, and health. The primary data
was obtained through surveys using self-administered questionnaires
derived from a few notable research instruments (Tolich & Harcourt
1999, Bryson 2003, Office of the Employment Advocate 2004, Poole et al
2005).
After piloting the survey instruments with appropriate amendment,
576 questionnaires were mailed to selected respondents (non-union
members) with 168 useable returns after several follow-up contacts of
non-respondents. The survey was completed between August and October
2009. The responses from selected employers were collected during the
MEF's regional meetings. Nevertheless not all selected respondents
returned the questionnaires on the same day, and thus it was necessary
to follow up with telephone calls to the respective employers, to seek
their cooperation in filling up the questionnaire and have them returned
early. A total of 215 questionnaires were distributed to the employers,
of which 185 useable returns were received from a wide geographical
area. The user-friendly SPSS software Version 15 was used to analyse the
survey data, to arrive at appropriate conclusions.
Perceptions on Malaysian Trade Unions
Table 1 reveals the employers' attitudes towards the trade
unions, as perceived by employees in unionised companies. Only 23.2% of
the respondents agreed that employers provide access to unions, to talk
to new employees. A small percentage of respondents perceived that
employers do not discriminate against union members in career
progression. On whether the employer is willing to negotiate with the
union, 44% of the respondents disagreed that this is so. While only
14.9% agreed that employers display a positive attitude towards the
union, 56.5% of the respondents were not sure whether their employers
being negative towards their union. A substantial number of respondents
(67.3%) disagreed that employers provide information about unions
automatically to new employees. Finally, 85.7% of respondents disagreed
that employers encourage all eligible new employees to join the unions,
reinforcing the argument that respondents perceive employers to have
rather negative attitude towards the unions. The role of the individual
rather than the collective aspirations of employees is clearly
emphasised by employers. Not only could it be argued that elements of
individualisation are present and increasing, but employers are placing
much emphasis on direct links between management and employees.
The main reason cited by employers of unionised companies for their
acceptance of unionisation is that they 'have to comply with
relevant legal provisions on rights of workers to form unions'
(84.3%). Section 4 of the Industrial Relations Act 1967 of Malaysia aims
to protect the rights of workmen as well as employers, in the private
sector, to form and assist in the formation of their respective trade
unions and in the exercise of their rights, no person can interfere
with, restrain or coerce a workman or an employer. It appears to be the
case of unwilling acceptance, that is, failure to comply would mean
having to face possible legal action either by the union or the
government. Some employers also stated that it was usual in their
industry (22.7%) and concerns about union disruption have also played a
role in the acceptance of unionisation (23.8%). Employers largely
disagree that they would prefer to negotiate wages and conditions
collectively. Further, neither the employers' associations
recommend it nor do their customers require it. Table 2 reports the
results of the survey.
It can be noticed from Table 3 that the employers acknowledge the
involvement of trade unions and employee representative bodies in
workplace issues, although varied in their extent of involvement. Unions
are perceived to be involved in issues concerning company rules and
regulations (35.1%) and female workers' issues (34%) to some
extent. In critical areas of the organisation such as quality (21.1%),
production (24.3%) and working practices (26.5%), unions appear to play
a lesser role. Employers perceived the unions' involvement rather
low in matters related to team work (17.3%) and issues pertaining to
disabled workers (14.1%). These do not appear to be key issues among
unions, and as such employers do not see unions as being active partners
in some key areas of their companies' operations. In a few
instances, the extent of agreement among employers about the involvement
of both the trade unions and employee representative groups is high and
this is considering the fact that employers do not generally see unions
in a positive light. It would appear as if employers attempt to harness
unions' involvement, in ways beneficial to their companies, for
example, social and sporting activities (53.5%), employee welfare
(49.7%) and cultural and religious activities (30.8%). Further,
unions' involvement in health and safety issues (62.7%) is an
indicator that employers see a role for unions in their organisations.
Unions' involvement in the traditional bread-and-butter issue, that
is, pay and benefits is not very high (50.3%). Therefore, unions are
perceived as being more involved in social matters, rather than the more
critical 'quality' and 'production' issues. The aim
of employee involvement initiatives is to displace the conflict-based
collective bargaining approach with approaches that do not involve
unions.
Employers believe that their attempts at introducing employee
involvement and participation initiatives have, for example, induced a
high sense of belonging (73.5%), improved communication (69.2%),
enhanced performance (68.1%), achieved greater commitment (63.2%) and
increased overall profitability (62.2%). Indeed the employers perceived
positively all items pertaining to employee involvement and
participation initiatives as indicated in Table 4.
Based on the analysis, employers appear to have adopted workplace
policies in which they believe that employee involvement and
participation initiatives have an important part to play. However
employers agree that the two most important barriers to successful
operation of employee involvement and participation are employees'
resistance to change and their level of education and training. To a
smaller extent, employers also perceive that employee representative
bodies are possible barriers to employee involvement and participation.
Employers perceived that the low level of support provided by the trade
unions as being the other important sources of barriers (56.7%). This
could partly explain employers' antagonistic approach towards
unions in Malaysia. Employers perceived that top management support and
employee rewards systems as being of very minimal barriers to employee
involvement. Table 5 reports the barriers to employee involvement and
participation as perceived by the employers.
Conclusion
A substantial majority of non-union members perceive that employers
do not display a positive attitude towards the union, reinforcing the
previous findings that employers have rather negative attitude towards
the unions. Unions are generally perceived by employers of unionised
companies, as being able to contribute very little to their businesses.
In effect, employers not only hold the view that unions are superfluous,
but possibly also a threat to their business. The high level of employer
opposition to unionisation in this study is clearly an indicator of its
role in the erosion of collective representation, leading to the
diminution of union organising efforts. Based on this study, it can be
argued that the highly competitive and dynamic globalised business
environment has been the key driver in employers' attitudes towards
trade unions. The employer, who has direct and immediate contact with
employees and trade unions can, therefore, be viewed as a significant
barrier to trade unionism. It is evident that the employers favour the
unitarist approach, rather than the pluralist approach. While the labour
practices are focused on employee involvement initiatives, the employer
relationship with trade unions is the one that can be seen as somewhat
antagonistic. One of the reasons for this is the drive for
organisational stability and harmony in a business environment that is
highly competitive, especially competition from low cost economies such
as China and Vietnam.
The relationship between the employers and trade unions is one
built on power imbalance and suspicions about each other's roles.
The capacity of employers to resist an effective union presence at their
workplaces has therefore made union membership unavailable to large
numbers of potential union members. The findings suggest that unions
will struggle to unionise in the face of concerted employer opposition.
It would appear that unions are not being taken very seriously by
employers. The full scope of employer opposition to trade unionism in
Malaysia is difficult to observe, until further research on a longer
term is carried out. Longitudinal research on managers in industrial
relations is rare, and this is important.
Trade unions need to review their organising strategies, as well as
their internal procedures and processes. Trade unions should go beyond
purely being involved in their own activities, and be engaged in
activities strategic to their communities and their employers. Employers
need to implement work practices that accommodate legitimate
workers' interests, and the union's legitimate interests, as
well. There are employers who are unethical and unscrupulous when it
comes to worker issues. As such, unions are important, and in fact
necessary, to protect workers' interest. Trade unions can be
partners, supporting the employers' business, rather than merely
being seen as by employers, as the opposition. Unions have a vested
interest in the existence and growth of the businesses: it serves their
very existence. Union busting activities may not be the appropriate
approach; instead employers can consider proactive and caring employment
policies. There is a need to articulate a vision that seeks to engage
both unions and employers in an intelligent discourse. There is a need
for a reformulation of how trade unions can be represented in the
workplace and at the national level. Instead of taking the traditional
adversarial approach, a partnership approach may be the best way
forward.
The state, with its neo-liberal policies has, over the years,
strengthened legislation to curb the powers of trade unions. This has
led to a situation where unions find it difficult to express the
disappointments and expectations of workers. Unions, on the other hand,
have to reassess their strategies, in terms of their relationship with
employees and employers. The research findings contribute to better
understanding of workplace issues among the various stakeholders, namely
employees, employers and trade unionists, and to some extent, to the
state as well. The results have potential benefits in that it brings
into the open the views of the different parties about each other, the
positive elements as well as the problems and frustrations.
Understanding the viewpoints of others may commit each other to a long
term harmonious workplace. It should be emphasised that these findings
should be further investigated on a longitudinal basis, to better
understand the changing nature of the business environment and its
implications on trade unionism, in particular.
Acknowledgement
This paper draws on the workplace industrial relations survey
financed (under the Fundamental Research Grant Scheme, 2008-2010) by the
Ministry of Higher Education, Malaysia.
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Table 1 Employer s Attitude towards the
Trade Union as Perceived by Employees
Items Non-union Members in Unionised Company
(n = 168)
Disagree (%) Neutral (%) Agree (%)
Provide access to union to talk 89 (53.0) 40 (23.8) 39 (23.2)
to new employees
Does not discriminate against 36 (21.4) 104 (61.9) 28 (16.7)
union members in career
progression
Willingly negotiates with the 74 (44.0) 67 (39.9) 27 (16.1)
union
Managers display a positive 48 (28.6) 95 (56.5) 25 (14.9)
attitude towards the union
Information about union 113 (67.3) 33 (19.6) 22 (13.1)
automatically given to new
employees
No discrimination in hiring 49 (29.2) 103 (61.3) 16 (9.5)
ex-union members
All eligible new employees are 144 (85.7) 21 (12.5) 3 (1.8)
encouraged to join union
Table 2 Reasons for Company s Acceptance of Unionisation
Items Employers in Unionised Company
(n = 185)
Disagree (%) Neutral (%) Agree (%)
We have to comply with relevant 4 (2.2) 25 (13.5) 156 (84.3)
legal provisions on rights of
workers to form unions
We are concerned about workers 53 (28.6) 88 (47.6) 44 (23.8)
disruption if we do not comply
with it
It is usual in our industry 86 (46.5) 57 (30.8) 42 (22.7)
We prefer to negotiate wages and 130 (70.3) 42 (22.7) 13 (7.0)
conditions collectively, not
individually
Our Industry Association 176 (95.1) 9 (4.9) 0
recommends it
Our customers/clients require it 185 (100.0) 0 0
Table 3 Employers Perception on the Involvement of Trade Unions
Items Employers in Unionised Company
(n = 185)
Low (%) Neutral (%) High (%)
Production issues 108 (58.4) 32 (17.3) 45 (24.3)
Quality issues 111 (60.0) 35 (18.9) 39 (21.1)
Team working issues 90 (48.7) 63 (34.1) 32 (17.3)
Health and safety issues 26 (14.1) 43 (23.2) 116 (62.7)
Pay and benefits issues 44 (23.8) 48 (25.9) 93 (50.3)
Working practices 108 (58.4) 28 (15.1) 49 (26.5)
Company's rules and regulations 105 (56.8) 15 (8.1) 65 (35.1)
Interests of female employees 32 (17.3) 90 (48.7) 63 (34.0)
Interests of disabled employees 88 (47.6) 71 (38.4) 26 (14.1)
Cultural and religion activities 86 (46.5) 42 (22.7) 57 (30.8)
Employee welfare system 55 (29.7) 38 (20.5) 92 (49.7)
Social and sporting activities 41 (22.2) 45 (24.3) 99 (53.5)
Table 4 Employers Perception on the Extent of Contribution
of Employee Involvement and Participation Initiatives
Items Non-union Members in Unionised
Company (n = 168)
Disagree (%) Neutral (%) Agree (%)
Induced sense of belonging 7 (3.8) 42 (22.7) 136 (73.5)
Improved communication 30 (16.2) 27 (14.6) 128 (69.2)
Enhanced performance 32 (17.3) 27 (14.6) 126 (68.1)
Identified untapped talent 31 (16.8) 37 (20.0) 117 (63.2)
Achieved greater commitment 23 (12.4) 45 (24.3) 117 (63.2)
Reduced industrial dispute/ 35 (18.9) 34 (18.4) 116 (62.7)
created harmony
Increased overall 33 (17.8) 37 (20.0) 115 (62.2)
profitability
Reduced absenteeism rate 26 (14.0) 54 (29.2) 105 (56.7)
Reduced turnover rate 32 (17.3) 51 (27.6) 102 (55.2)
Table 5 Employers Perception on the Extent of Contribution
of Employee Involvement and Participation Initiatives
Items Employers in Unionised
Company (n=185)
Disagree (%) Neutral (%) Agree (%)
Employee education/training level 30 (16.2) 27 (14.6) 128 (69.2)
Employee resistance to change 32 (17.3) 27 (14.6) 126 (68.1)
Trade unions 26 (14.0) 54 (29.2) 105 (56.7)
Employee representative bodies 90 (48.6) 34 (18.4) 61 (32.9)
Employee turnover rate 102 (55.2) 32 (17.3) 51 (27.6)
Employee absenteeism rate 97 (52.4) 54 (29.2) 34 (18.4)
Top management support 136 (73.5) 18 (9.7) 31 (16.8)
Employee reward systems 128 (69.2) 27 (14.6) 30 (16.2)