Industrial relations

Abstract

Industrial Relations is an important aspect of economic and social development in society. A stable and effective industrial relations situation is important for facilitating economic growth and equitable distribution of incomes to labour. Industrial relations focuses on employer, employee relations with regard to terms and conditions of employment and grievance redressal procedures within the framework of existing legislation. The government plays an important role in ensuring the framework necessary for stable and effective industrial relations. Industrial relations is therefore a shared tripartite responsibility between the three equal social partners in society namely the government, the employers and the trade unions. Malaysia's current industrial relations policies are based partly on the inherited "control culture" of the colonial era, the Emergency between 1946 and 1960, the Emergency during Confrontation (1963 - 1966) and NOC Rule after May, 1969. The National Five Year Economic Development Plans have also influenced the evolution of the industrial relations system. Currently the 7th National Five Year Economic Development Plan (1996-2000) is in progress. During the First and Second Plan period the strategy adopted was the diversification of the economy especially in the agricultural sector and the building of the infrastructure requirements for the creation and expansion of the manufacturing sector especially value added industries based on local raw materials. The Third Malaysia Plan set the strategies firmly in the context of the New Economic Policy. Industrialization was emphasized together with the expansion of the Petroleum and petro-chemical industries. The courting for foreign investments to accelerate the process began aggressively with the offer of special incentive packages to foreign investors. Public investments were directed for the creation of free trade zones and industrial areas in strategic locations to attract foreign investments and encourage local investors. The subsequent plans proceeded with the same thrust but resorted to greater 'market friendly' policies. The gradual shift from the public sector to the private sector as the engine of economic growth is apparent subsequent to the Third Malaysia Plan period (1976–1980).