Collective agreement Malaysia: Understanding its importance and key features
Collective agreement is a legally binding agreement between an employer and a trade union that sets out the terms and conditions of employment for workers in a particular industry or workplace. In Malaysia, the collective agreement is governed by the Industrial Relations Act 1967 and enforced by the Department of Labour.
The collective agreement serves as an important tool to regulate the relationship between the employer and employees, ensuring fair treatment, safe working conditions, and reasonable compensation. It protects the rights of employees and promotes industrial peace and harmony by providing a mechanism for resolving disputes and grievances.
In Malaysia, collective agreements are common among unionised industries, such as manufacturing, transportation, and construction. In order for a collective agreement to be valid, it must be registered with the Director-General of Industrial Relations and approved by the Minister of Human Resources.
Key features of a collective agreement:
1. Scope and coverage: A collective agreement specifies the scope of its coverage, which includes the workers and positions covered, the duration of the agreement, and the industries or sectors covered.
2. Wages and benefits: The agreement sets out the minimum wages and benefits that employees are entitled to, such as allowances, overtime pay, medical benefits, and leave entitlements.
3. Working hours and conditions: The collective agreement also includes provisions on working hours, rest periods, and working conditions, including safety and health measures.
4. Grievance and dispute resolution: The agreement provides a mechanism for resolving disputes and grievances, such as through mediation, conciliation, or arbitration.
5. Union rights and management prerogatives: The collective agreement spells out the rights and responsibilities of both unions and management, including the union`s right to represent workers and management`s right to manage the business.
In conclusion, collective agreement Malaysia plays a crucial role in regulating the relationship between employers and employees. It promotes industrial peace and harmony by providing a framework for fair treatment, safe working conditions, and reasonable compensation. Employers and employees should work together to negotiate and implement collective agreements that benefit both parties and contribute to a thriving economy.