How Does a Collective Agreement Become Valid in Malaysia

Collective agreements are crucial to the relationship between employees and employers, as they establish the terms and conditions of employment. In Malaysia, collective agreements are governed by the Industrial Relations Act 1967 and the Collective Agreement Regulations 1958.

To understand how a collective agreement becomes valid in Malaysia, it is essential to know the steps involved in the process. First, the trade union or registered employees` association must serve a notice of intention to negotiate a collective agreement to the employer. The notice must be in writing, and it sets out the terms and conditions that the union or association seeks to negotiate.

Once the notice is served, the employer must respond within fourteen days to indicate whether they agree to negotiate or not. If the employer agrees, the parties will then proceed to negotiate the terms and conditions of the collective agreement. The negotiations usually take place at the workplace, but parties can agree to meet elsewhere.

During the negotiation process, both parties will discuss their proposals and try to reach a mutually acceptable agreement. Once an agreement is reached, the parties will sign and date the document. The collective agreement becomes valid once it has been registered with the Director-General of Industrial Relations.

To register a collective agreement, the trade union or association must submit a written application to the Director-General of Industrial Relations. The application must be made within thirty days of the date of the agreement. The application must include a copy of the agreement, the names and addresses of the parties, and the date of signing.

Upon receiving the application, the Director-General of Industrial Relations will examine the agreement to ensure it complies with the Collective Agreement Regulations 1958. If there are no issues, the Director-General will register the agreement and issue a certificate of registration.

Once a collective agreement is registered, it is legally binding on both parties, and they must comply with its terms and conditions. If either party breaches the agreement, the other party may take legal action to enforce it.

In conclusion, a collective agreement becomes valid in Malaysia through a process that involves negotiating the terms and conditions of the agreement, signing and registering it with the Director-General of Industrial Relations. The agreement is legally binding on both parties and must be complied with. Collective agreements play a critical role in maintaining a positive relationship between employees and employers, and it is crucial to follow the legal process involved in making them valid.