An examination of the contending factors shaping the role of the state in Malaysian industrial relations

Abstract

The state has increasingly played a dominant role in the development of Malaysian industrial relations. Earlier researchers have shown that since the beginning of the relationship between employers and employees, economic considerations have been significant, and especially so during the British colonial era. This has therefore been a consistently important factor that has influenced the role of the state. The British policy of bringing in immigrants of the Indian and Chinese origins into Malaya created the plural society that was later further divided according to their economic activities. The Malays, in comparison to the immigrants, partly because of the 'protection' policy of the British, and partly because of their culture, became the least educated and economically unadvanced. This study looks into how the demarcation between ethnic groups has been used as one factor to determine the national development plans in Malaysia, which ultimately affected the development of industrial relations. The Malay-dominated government tried to ensure the Malays had a better place in the economy by introducing the National Economic Planning (1971-1990), originated after the l3th May 1969 race riot, and which legitimised the Malays/Bumiputeras 'special position' in the country. This study suggests that the government has given a high priority on economic growth as an instrument to achieve the status of a developed country, with the ultimate objective being 'national unity'. However, there were other non-economic factors, such as social and political considerations, that influenced the role of the state in the Malaysian economy that later dictated its role in industrial relations. The NEP was an affirmative action taken to correct the economic imbalance between the ethnic groups in Malaysia, especially between Malays and non-Malays, or later termed as Bumiputeras or non-Bumiputeras on the ground that they were the indigenous people, protected under the Malaysian Constitution. Other policies adopted by the government, including that of industrial relations, were developed to ensure that the objectives of NEP were met. Therefore, legislation, administration and other policies regarding the industrial relations were developed along this line. Meanwhile, as an employer to the public sector, the government ensured the sector played its role according to the bigger national agenda, the NEP. This continued during the National Development Planning (1991-2000), when it retained some of the NEP's objectives, but with new strategies that suggested Malaysia was ready to move on into another era that was barely based on ethnicity preference. However, the ethnic issue still persisted, and the social and political systems still influenced Malaysia in its quest to a fully developed and industrialised country by the year 2020 at the latest. This study examined how Malaysia tried to move forward, but at the same time still concerned with issues of the past. As long as this is the case, this study argues that Malaysia will preserve its old industrial relations policies.