INDUSTRIAL01 JULY 2026 GMGMK3073RELATIONS AND LEGAL COMPLIANCE INTOP GLOVE CORPORATION BHD TOP GLOVE’S LABOUR MANAGEMENT PRACTICESEXPLORING THE ROLE OF INDUSTRIAL RELATIONS, LABOUR LAWS AND LEGAL COMPLIANCE PRACTICES IN ENSURING SUSTAINABLE WORKFORCE MANAGEMENT AND ORGANIZATIONAL EXCELLENT AT TOP GLOVE CORPORATION BHD. SPECIAL FEATURE LABOUR ADMINISTRATION IN MALAYSIAPromoting Harmonious Employment Relations Through Legal Compliance and Workforce Excellence.
ESTABLISHMENT & STRATEGYESTABLISHMENT & STRATEGYNEGOTIATION & AGREEMENTNEGOTIATION & AGREEMENTCONCLUSIONCONCLUSIONREFERENCESREFERENCESCONFLICT MANAGEMENTCONFLICT MANAGEMENTLEGAL RISK MANAGEMENTLEGAL RISK MANAGEMENTINTRODUCTIONINTRODUCTION11224477121216161717
M U H A M M A D F A I E Z B I N F A U Z IN U R S A H I R A B I N T I A B D U L R A H I MN U R H A N I S O F R I N A B I N T I H A S R IN U R L A I L A T U L S A L S A B I L A B I N T I M U H A M A D H A L I L IA I N A H U D A B I N T I A B U Z A I D2 9 8 7 2 9U U MU U MU U MU U MU U M2 9 7 7 0 12 9 8 5 7 42 9 9 2 4 73 0 2 1 3 3
THE WORLD’S LARGEST RUBBER GLOVE MANUFACTURERTHE WORLD’S LARGEST RUBBER GLOVE MANUFACTURER1.0 INTRODUCTION Founded by Tan Sri Dr. Lim Wee Chai in 1991 in Malaysia, Top Glove Corporation Bhd is the world's largest rubber glove manufacturer (Bursa Malaysia, 2021). Initially with a single factory and a production line, the company has quickly grown and become the leading player in the global market, exporting products to more than 195 countries (Top Glove, 2025). The company's ongoing dedication to operational efficiency and the adoption of digital technology has helped it diversify its product offerings, including a range of disposable gloves for the medical industry and other healthcare products (Top Glove, 2025). Top Glove Corporation Bhd has embraced international social compliance frameworks in its corporate social responsibility (CSR) activities and has met the Business Social Compliance Initiative (BSCI) standards (Bursa Malaysia, 2021). The corporation has been formally audited by independent third parties and found to be compliant with the 11 indicators of forced labour in the International Labour Organisation (ILO) (Bursa Malaysia, 2021). It was accomplished through structural changes, such as the complete elimination of migrant worker recruitment fees in April 2021, and the capital investment of RM 220 million to upgrade housing infrastructure for 13,000 migrant workers, complying completely with the Malaysia's Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Bursa Malaysia, 2021). The firm implemented multilingual grievance hotlines handled by external auditors and structured dialogic spaces, such as monthly meetings of human resource and quarterly meetings between outside directors and worker representatives in order to ensure the transparency of human capital governance (Bursa Malaysia, 2021). Moreover, occupational safety and employee welfare are institutionalized through a 46- member in-house wellness team and specialized structural frameworks: the Zero Harm and Safety Health Emergency Preparedness Program, and Workers' Health Protection Program, which comprehensively address the physical and mental health of the workforce (Bursa Malaysia, 2021).TOP QUALIT Y, TOP EFFICIENCY
2.12.22.0ESTABLISHMENT& STRATEGYPROCESS OF UNION REGISTRATION AND LEGAL REQUIREMENTS FOR RECOGNITIONThe industrial relations landscape in Malaysia is shaped by the interaction between the Trade Unions Act 1959 (TUA) and the Industrial Relations Act 1967 (IRA). As young entrepreneurs establishing a mid-sized manufacturing company in Malaysia, understanding the process of trade union registration and recognition is essential to ensure legal compliance, foster harmonious industrial relations, and support the long-term sustainability of the business. Drawing lessons from Top Glove Corporation Bhd as a real-life industry example, entrepreneurs can better appreciate the importance of balancing organisational objectives with employees' rights and interests (Jamaluddin et al., 2020).UNION REGISTRATION PROCESS UNDER THE TUA 1958LEGAL REQUIREMENTS FOR RECOGNITION UNDER THE IRA 1967 Any group of workers that wants to act as a union must apply for official registration with the Director General of Trade Unions (DGTU) within one month of forming (Nazry, 2024; Malaysia, 1959). Under Malaysian law, workers’ rights to associate are limited by geographical and occupational factors. Workers can only join unions that represent their specific trade, occupation or sector within the same state (Dunston Ayadurai, 2013; Shatsari & Hassan, 2006). Unions that cover different industrial sectors are not allowed (Shatsari & Hassan, 2006). As a result, Top Glove employees must either create a specific in-house union or join a pre-registered regional sector union, such as the National Union of Employees in Companies Manufacturing Rubber Products (NUECMRP) (Kee et al., 2021). Additionally, the DGTU has the authority to deny registration if an existing union already effectively represents the same group of workers to avoid splitting the workforce (Dunston Ayadurai, 2013; Malaysia, 1959). Registration under the TUA 1959 does not automatically give a union collective bargaining rights. Therefore, the union must formally request recognition from the employer under Section 9 of the Industrial Relations Act 1967 (IRA) (Malaysia, 2021). Once Top Glove receives a written "Claim for Recognition," it must respond within 21 days. The response can either grant recognition, deny it with specific reasons or notify the Director General of Industrial Relations (DGIR) (Malaysia, 2021). To obtain full recognition, the union must demonstrate its ability to represent the specific group of workers and show majority support, usually verified through a secret ballot supervised by the Department of Industrial Relations (Sina, 2024). If management contests the claim, the final decision lies with the Minister of Human Resources, which is binding and not subject to legal challenge (Shatsari & Hassan, 2006). To guarantee a fair process, Sections 4 and 59 of the IRA impose heavy penalties for corporate retaliation or wrongful termination aimed at union organizers (Ahmad, 2019).2.1TOP QUALIT Y, TOP EFFICIENCY
Union Recognition as a "Strategic Partner"2.2ENTREPRENEURIAL PERSPECTIVE:UNION RECOGNITION UNION RECOGNITION IS MORE THAN A LEGAL STATUS - IT IS A STRATEGIC PARTNERSHIP THAT DRIVES A STRONGER, FAIRER AND MORE PROGRESSIVE WORKPLACE. On the other hand, modern business strategies see a recognized trade union as a key risk management tool. Top Glove has faced major reputational and financial challenges, including international trade sanctions and import bans linked to accusations of forced labor, debt bondage and poor living conditions for migrant workers (Marmo & Bandiera, 2021). By formally recognizing a labor organization, whether an in- house union or a recognized entity like the NUECMRP, management creates an open channel for addressing workplace issues. This cooperative approach helps prevent employee dissatisfaction from turning into public relations crises, ensures compliance with international buyer standards and enhances the corporation’s Environmental, Social and Governance (ESG) rating, which is important for attracting institutional investors (Kee et al., 2021).TOP QUALIT Y, TOP EFFICIENCYUnion Recognition as a "Strategic Partner"
NEGOTIATIONTOP QUALIT Y, TOP EFFICIENCY3.0& AGREEMENTSTRONGER TOGETHER, BET TER TOMORROW. After the union obtained formal recognition under the Industrial Relations Act 1967, collective bargaining negotiations between Top Glove management and union representatives commenced to draft an agreement that balanced the protection of workers’ rights and welfare with the company’s need to maintain operational efficiency, global competitiveness and long-term financial sustainability (Malaysia, 2021). The negotiations were conducted based on an interest-based bargaining approach that emphasized cooperation, understanding and solutions based on mutual interests (Top Glove Corporation Berhad, 2024). In line with the challenges identified in industrial relations, worker welfare, compliance with international labour standards and strengthening corporate reputation, the negotiations focused on three main aspects, namely wage structures and productivity incentives, employment conditions and working hours, and worker welfare and grievance management mechanisms (MECA Employers Consulting Agency Sdn. Bhd., n.d.). From an entrepreneurial perspective, effective collective bargaining enables businesses to balance employee welfare with financial sustainability and long-term competitiveness. The salary structure and productivity incentive scheme are among the main issues discussed in collective bargaining between the management of Top Glove Corporation Bhd and the trade union as they have a direct influence on the well-being of employees and the performance of the organisation (Ampong, 2024; Lucifora, 2022).From the union perspective, the negotiations are focused on ensuring that workers receive fair and commensurate rewards for their contribution to the company's productivity. This need is increasingly important as the glove manufacturing industry relies on a large workforce and requires high levels of productivity to meet global market demand (Lee, 2021).Therefore, trade unions typically demand regular salary reviews, transparent salary increment structures and performance-based incentives to increase work motivation and ensure economic stability for workers. These demands are also in line with industrial relations principles that emphasize the importance of fair compensation in creating job satisfaction and reducing employee turnover (Ampong, 2024; Lucifora, 2022). From a management perspective, salary structures and incentive schemes need to be strategically designed to align with the company's financial capabilities and productivity improvement objectives. In the meantime, Top Glove adopts a performance management system that links employee achievement with rewards received to encourage a high-performance work culture and improve operational efficiency (Top Glove Corporation Bhd, 2024). Therefore, management is more likely to support a productivity-based reward mechanism because this approach allows the company to sustainably control labor costs while rewarding employees who achieve set performance targets. Through effective collective bargaining, both parties are able to reach an agreement that balances the interests of employees and the organization, thus supporting enterprise harmony, increasing productivity and strengthening the company's competitiveness in the global glove manufacturing industry (Tremblay, 2016).FROM UNION PERSPECTIVEFROM MANAGEMENT PERSPECTIVE3.1WAGE STRUCTURE AND PRODUCTIVITY INCENTIVE SCHEME WAGE STRUCTURE AND PRODUCTIVITY INCENTIVE SCHEME
3.2FROM UNION PERSPECTIVEFROM MANAGEMENT PERSPECTIVEIssues related to working hours and working conditions were the second item discussed in collective bargaining between the management of Top Glove Corporation Bhd and the trade union. This is particularly significant given that the company's production operations are carried out continuously to meet the high global market demand for glove products. This situation has resulted in workers often being involved in shift work and overtime which has the potential to impact their health, safety and well-being (Lee, 2021; Caruso, 2014). In addition, various reports related to the Malaysian glove industry have emphasized the importance of compliance with fair labor standards, particularly in terms of working hours, rest periods and overtime management (U.S. Department of Labor, 2021). Therefore, the trade union demands that working hours and employment conditions be administered more systematically and in accordance with the provisions of the Employment Act 1955 to ensure that the rights and welfare of workers are always protected. In the meantime, the demand is in line with the provisions of the Employment Act 1955, particularly Section 60A which regulates working hours, overtime and rest periods of workers as well as Section 59 which guarantees the right of workers to enjoy at least one day of rest in each week (Malaysia, 1955). During the negotiation process, the union proposed that overtime be regulated within the limits set by law, shift schedules be announced in advance, and adequate rest periods be given to workers. However, management insisted that a certain level of flexibility must be maintained to ensure continuity of operations and meet delivery commitments to international customers (Kee et al., 2021). In the proposed collective agreement developed, both parties agreed to implement a more orderly working time management system, comply with the overtime limits provided by law and increase transparency in shift schedule management. This proposal is in line with the provisions of the Employment Act 1955 as well as industrial relations practices that promote a balance between the operational needs of the organization and the welfare of employees (Malaysia, 1955; Ministry of Human Resources Malaysia, n.d.). This agreement reflects a balanced approach between the company's operational needs and the interests of employees, thus contributing to increased productivity, reduced risk of employee burnout and strengthening harmonious industrial relations (Caruso, 2014; Malaysia, 1955).TOP QUALIT Y, TOP EFFICIENCYWORKING HOURS AND EMPLOYMENT CONDITIONS WORKING HOURS AND EMPLOYMENT CONDITIONS
3.3FROM UNION PERSPECTIVEFROM MANAGEMENT PERSPECTIVEAspects of worker welfare, accommodation facilities and grievance mechanisms were also important focuses in collective bargaining as Top Glove relies significantly on migrant workers in its operations (U.S. Department of Labor, 2021). This issue has received widespread attention from various international stakeholders, particularly US authorities, following allegations regarding labor practices, worker housing conditions, and the welfare of migrant workers in the glove manufacturing industry, which has led to stricter enforcement and scrutiny of the company (Lee, 2021). In this regard, the trade union demands that the company strengthen employee welfare initiatives by providing accommodation facilities that comply with the standards set by the Minimum Standards for Housing, Accommodation and Workers' Facilities Act 1990 (Act 446), which obliges employers to provide accommodation and basic facilities that meet the minimum standards set by the authorities to guarantee the welfare and well-being of employees (Malaysia, 1990). In addition, trade unions also demand that workers be given adequate access to health, safety and social support facilities to improve their quality of life and well-being (Top Glove Corporation Bhd, 2021). In addition, the trade union also emphasized the need to establish a complaints mechanism that is transparent, effective and free from any form of discrimination or retaliation against employees who submit complaints (U.S. Department of Labor, 2021). In the proposed collective agreement developed, both parties agreed to strengthen communication channels between workers and management through the implementation of a more systematic complaint procedure, including transparent investigations, protection of confidentiality and clear follow-up. This approach is in line with the principles outlined in the Code of Conduct for Industrial Harmony which promotes communication and cooperation between employers, workers and trade unions to create harmonious industrial relations (Ministry of Human Resources Malaysia, n.d.). Indirectly, this move aims to strengthen Top Glove's corporate reputation globally, increase stakeholder confidence and support the sustainability of the company's operations in the long term (Top Glove Corporation Bhd, 2025). Based on the collective bargaining process, both parties agreed to incorporate the following provisions into the proposed Collective Agreement framework.TOP QUALIT Y, TOP EFFICIENCY Table 1: Proposed Collective Agreement FrameworkWORKER WELFARE, ACCOMMODATION AND GRIEVANCE MECHANISM WORKER WELFARE, ACCOMMODATION AND GRIEVANCE MECHANISM
CONFLICT MANAGEMENTTOP QUALIT Y, TOP EFFICIENCYBUILDING SUSTAINABLE INDUSTRIAL REL ATIONSIn the modern manufacturing industry, conflict between employers and employees is an unavoidable reality, particularly in large-scale organisations such as Top Glove Corporation Bhd. As one of the world’s largest glove manufacturers, Top Glove operates continuously with a large workforce consisting of both local and migrant workers. Due to the demanding nature of the industry, conflicts may arise regarding wages, overtime, employee welfare, workplace safety and company policies. As entrepreneurs, proactive conflict management is essential to minimise operational disruptions, maintain employee trust, and preserve business continuity.Therefore, effective conflict management is essential to maintain harmonious industrial relations, operational stability and compliance with Malaysian labour laws. In Malaysia, the Industrial Relations Act 1967 provides the formal framework for resolving industrial disputes through negotiation, conciliation and Industrial Court proceedings.This organisation has a large workforce, continuous production operations and high reliance on local and migrant workers. Conflicts can arise due to differences in interests between management and employees regarding issues of wages, working hours, employee welfare, workplace safety and the implementation of company policies. Therefore, systematic and effective conflict management is very important to ensure the stability of industrial relations, the continuity of operations and compliance with labour laws in Malaysia. In this context, the Industrial Relations Act 1967 (Industrial Relations Act 1967) plays a key role by providing a formal mechanism to manage and resolve industrial disputes through negotiation, conciliation and referral to the Industrial Court (Malaysia, 2021).
TOP QUALIT Y, TOP EFFICIENCYIndustrial conflicts at Top Glove can take many forms, whether individual or collective. Individual conflicts typically involve employee discipline issues, termination of employment, discrimination or dissatisfaction with performance appraisals. Collective conflicts typically involve union demands regarding wage rates, overtime, working conditions and overall employee welfare. In the glove manufacturing industry, which operates intensively and competitively, pressure on productivity and production targets is often a major factor that triggers conflict between employees and management (Jamaluddin et al., 2020).Top Glove has previously faced international criticism regarding allegations of forced labour practices and inadequate worker accommodation. These issues have increased pressure on the company to strengthen labour compliance and adopt more transparent conflict management practices.The company's reliance on migrant workers also increases the risk of industrial conflict, particularly regarding issues of accommodation, welfare, employment documentation, and cultural and language communication. Top Glove has also faced international criticism regarding allegations of forced labour practices and workers' accommodation conditions that do not comply with international standards (Pattison, 2021). This situation has put pressure on management to strengthen compliance with human rights standards and improve conflict management mechanisms in a more transparent and systematic way.In addition, poor communication between management and employees can also worsen industrial tensions. When many employee complaints are not addressed promptly, dissatisfaction may escalate into strikes, picketing or legal disputes. Hence, effective two-way communication is critical in maintaining harmonious enterprise relations (Rowley & Ramasamy, 2008).4.1TYPES OF INDUSTRIAL CONFLICTTYPES OF INDUSTRIAL CONFLICT
TOP QUALIT Y, TOP EFFICIENCYOne potential industrial dispute that could arise at Top Glove Corporation Bhd is a strike action involving production workers over issues related to excessive overtime and dissatisfaction with workers’ accommodation facilities. Although the company has implemented various initiatives to improve employee welfare and upgrade accommodation facilities in line with legal requirements and international labour standards, disputes may still occur if workers believe that management has failed to fully comply with the terms agreed upon in the Collective Agreement or the prescribed labour standards (Marmo & Bandiera, 2021). This situation may arise when workers claim that they are continuously required to perform overtime work to meet the increasing global demand for glove products, while also raising concerns regarding overcrowded accommodation, poor maintenance of facilities, and insufficient welfare amenities provided by the company (Malay Mail, 2021).The dispute could have significant implications for the organization’s operations and performance. As a manufacturing company that operates continuously twenty-four hours a day, a strike involving production workers could disrupt manufacturing processes, reduce operational capacity, delay product deliveries to international customers, and increase operational costs (Rowley & Ramasamy, 2008). Furthermore, prolonged disruptions may damage business relationships with global clients, reduce investor confidence, and negatively affect Top Glove’s corporate reputation as one of the world’s largest glove manufacturers. This situation may also impact the company’s performance from an Environmental, Social and Governance (ESG) perspective, which is increasingly becoming an important benchmark in assessing the sustainability and credibility of an organization (Kee et al., 2021).To minimize disruptions to business continuity, such disputes must be resolved according to the mechanisms provided under the Industrial Relations Act 1967. At the initial stage, management and the trade union should conduct direct negotiations through the Joint Consultative Committee to reach a mutually acceptable solution. If these negotiations fail, the dispute may be referred to the Industrial Relations Department for a conciliation process, where an Industrial Relations Officer acts as a neutral party to assist both sides in reaching a mutual agreement. If the conciliation process is still unsuccessful, the Minister of Human Resources may refer the case to the Industrial Court for adjudication (Ahmad, 2019). Therefore, transparent communication, effective grievance mechanisms, and continuous cooperation between management and trade unions are essential to ensure that disputes are resolved constructively and to avoid prolonged disruptions to the company’s operations (Shatsari & Hassan, 2006).4.2POTENTIAL INDUSTRIAL DISPUTESPOTENTIAL INDUSTRIAL DISPUTES
To ensure that industrial conflicts can be managed effectively, Top Glove Corporation Bhd needs to adopt a systematic dispute resolution mechanism in line with the provisions of the Industrial Relations Act 1967. The mechanism includes direct negotiations between management and trade unions, a conciliation process conducted by the Industrial Relations Department, and referral to the Industrial Court if the dispute fails to be resolved at the initial stage (Malaysia, 2021). The implementation of this mechanism can ensure that every dispute is handled fairly, orderly, and in compliance with legal requirements, while also reducing the risk of disruption to company operations (Ahmad, 2019).TOP QUALIT Y, TOP EFFICIENCYIn addition to the formal mechanisms provided by law, Top Glove also needs to strengthen its approach to conflict prevention through the establishment of a Joint Consultative Committee, the implementation of an effective employee complaint management system, periodic dialogue sessions between management and employees, and training programs related to conflict management and organizational communication.This approach can increase trust between employers and employees, encourage early resolution of issues, and reduce the likelihood of disputes escalating into industrial action such as strikes or pickets (Shatsari & Hassan, 2006). In addition, this practice also supports the company's commitment to good corporate governance, protection of workers' rights, and adherence to Environmental, Social and Governance (ESG) principles, thus contributing to the long-term sustainability of the organization (Kee et.al., 2021).4.3CONFLICT RESOLUTIONS MECHANISMSCONFLICT RESOLUTIONS MECHANISMS
TOP QUALIT Y, TOP EFFICIENCYFrom an employee perspective, a fair and transparent conflict management mechanism can increase employee confidence in management and create a safer and more harmonious work environment. When employees feel that their voice and welfare are valued, their motivation, commitment and job satisfaction levels will increase, thus helping to reduce employee turnover and industrial conflicts (Jamaluddin et al., 2020).Overall, conflict management plays an important role in ensuring the stability of industrial relations at Top Glove Corporation Bhd. The implementation of effective conflict resolution mechanisms not only helps protect the interests of employers and employees, but also supports the continuity of operations, enhances corporate image and ensures compliance with labour laws and international standards. Therefore, a proactive and collaborative conflict management approach is essential to creating sustainable and competitive enterprise relationships in the global manufacturing industry.4.4Effective conflict management provides various benefits to organizations and employees. From a company perspective, systematic conflict management helps reduce the risk of operational disruption, increase employee productivity and maintain corporate reputation internationally. This is particularly important for Top Glove as the company operates in a global market that places great emphasis on compliance with labour and ESG (Environmental, Social and Governance) standards (Marmo & Bandiera, 2021).IMPORTANCE OF EFFECTIVE CONFLICT MANAGEMENT IMPORTANCE OF EFFECTIVE CONFLICT MANAGEMENT
TOP QUALIT Y, TOP EFFICIENCYLEGAL RISKASSESSMENTBUILDING SUSTAINABLE INDUSTRIAL REL ATIONS5.1The Employment Act (EA) 1955 serves as the foundation of individual employment rights in Malaysia. One of the key legal risks faced by Top Glove under the Employment Act 1955 relates to the management of working hours and overtime. Prior to the implementation of stricter compliance measures, the company admitted in 2018 that a small number of its employees had exceeded the statutory overtime limit of 104 hours per month as set out under the Employment (Overtime Limits) Regulations 1980. Although Top Glove denied allegations that employees were forced to work overtime, the issue attracted significant public and international attention, highlighting the potential risks of non-compliance with labour regulations and allegations of forced labour practices. In response, the company introduced a number of corrective measures, including increased factory automation, new shift arrangements and employee training programmes to reduce reliance on excessive overtime and ensure compliance with legal requirements (The Edge Markets, 2018). If workers are systematically pressured to exceed statutory limits to meet production targets, Top Glove faces a risk of non-compliance under Section 60A of the EA 1955. Mitigation Strategy: Top Glove must employ a rigorous, digital biometric time tracking system that automatically locks out workers approaching statutory limits, ensuring all overtime is voluntary, accurately tracked and compensated at the mandatory premium rate.Wages and Minimum Wage Orders Managing a large workforce of 22,000 workers requires perfect alignment with Malaysia’s ever-changing minimum wage regulations. Statutory Compliance: Under the Minimum Wage Orders, the national minimum monthly wage remains at RM 1,700 (Jabatan Peguam Negara, 2024). As Top Glove previously relied heavily on piece-rate or task-based performance metrics to incentivize speed in removing and packing gloves, it carries a structural compliance risk. Legal Protection: Under the law, even if workers are paid on a piece rate or commission basis, their total calculated monthly income cannot fall below the RM 1,700 threshold. Non-compliance results in companies being subject to hefty fines of up to RM 10,000 per worker under the Labour Department (JTK) guidelines. Top Glove’s transition to a highly automated system stabilises this risk by shifting the pressure of production away from manual human speed, enabling a standardised and legally sound basic wage structure.Assessing labour governance in a global manufacturing powerhouse requires a rigorous cross- examination of operational practices against national statutory frameworks. For Top Glove Corporation Bhd, navigating legal compliance is not merely a human resources obligation but a critical safeguard against severe international supply chain disruptions and domestic litigation. As young entrepreneurs establishing a mid-sized manufacturing company in Malaysia, understanding the role of the Industrial Court and the potential consequences of Court Awards is equally important to protect organisational finances, safeguard corporate reputation, and ensure long-term operational sustainability.EMPLOYMENT ACT 1955 (AMENDMENT 2022) COMPLIANCE EMPLOYMENT ACT 1955 (AMENDMENT 2022) COMPLIANCE
MINIMUM STANDARDS FOR HOUSING, ACCOMMODATION AND FACILITIES FOR WORKERS ACT 1990 (ACT 446) MINIMUM STANDARDS FOR HOUSING, ACCOMMODATION AND FACILITIES FOR WORKERS ACT 1990 (ACT 446)TOP QUALIT Y, TOP EFFICIENCY5.2Historically, compliance with Act 446 represented one of Top Glove's most significant legal risks. In 2020, the company came under investigation by the Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM) for alleged violations of the Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446). JTKSM opened multiple investigation papers involving several Top Glove subsidiaries after inspections found non-compliance issues, including overcrowded worker accommodations, inadequate ventilation and the failure to obtain Accommodation Certificates as required under Section 24D of the Act (Rafidah Mat Ruzki, 2020). These findings exposed the company to legal prosecution, financial penalties, and significant reputational damage both domestically and internationally.Following investigations into overcrowded worker accommodations and alleged violations of the Employees’ Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446), Top Glove implemented extensive corrective measures to strengthen compliance and improve employee welfare. The company invested approximately RM220 million in the construction and acquisition of modern, centralized accommodation facilities capable of housing more than 13,000 workers (Top Glove, 2021). These facilities were designed to comply with Act 446 requirements relating to minimum space allocation, sanitation standards, ventilation systems and basic amenities. In addition, the accommodations operate under valid Accommodation Certificates issued by the Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM), demonstrating compliance with statutory housing regulations. From a legal risk perspective, this large-scale remediation programme significantly reduced Top Glove’s exposure to enforcement actions, financial penalties and potential corporate liability arising from non-compliance with worker housing standards. Furthermore, the improvements strengthened the company’s position in meeting international Environmental, Social and Governance (ESG) expectations, including benchmarks such as the Dow Jones Sustainability Index (DJSI), while helping to restore stakeholder confidence following previous labour-related controversies.
TOP QUALIT Y, TOP EFFICIENCYINDUSTRIAL RELATIONS ACT 1967 COMPLIANCEINDUSTRIAL RELATIONS ACT 1967 COMPLIANCE5.3Compliance with Industrial Relations Act (IRA) 1967 is a very critical agenda for Top Glove Corporation Bhd in managing its highly concentrated workforce landscape and ensuring that industrial harmony is always maintained across all manufacturing facilities. Should the management fail to recognise a trade union that has obtained a majority mandate or deliberately engage in any action that harasses, restricts and discriminates against any employee based on their union membership status, company can directly be accused of committing unfair industrial practices under the protection of Section 4 of the Industrial Relations Act 1967 (The Commissioner of Law revision, Malaysia, 2010).The legal implications of this violation are severe as it will not only trigger a case and formal complaint to the Industrial Relations Department (IRD), but can also be taken to the Industrial Court which has the power to order high financial compensation or reinstatement orders. From a commercial perspective, such uncontrolled industrial disputes could undermine Top Glove’s global reputation as a leading medical device supplier, invite negative perceptions from investors based on ESG elements and disrupt the smooth running of the international supply chain due to the risk of deliberate work slowdowns or factory strikes.In addition, failure to comply with or implement the terms enshrined in the Collective Agreement particularly those involving the basic salary adjustment structure, the calculation of overtime (OT) rates, provision of basic welfare and compliance with formal grievance procedures could expose Top Glove to the risk of protracted industrial disputes under Section 56 of the same act. Any form of breach of this collective contract would allow the union to file a non-compliance action, the decision of which in the Industrial Court could force the company to pay large cost adjustment arrears retroactively, thus affecting the corporate cash flow projections.To holistically mitigate these legal and operational risks, Top Glove has taken proactive steps by restructuring official communication channels, strengthening transparent internal complaint mechanisms to prevent cases from being escalated to external parties and establishing a Joint Negotiation Committee at the factory level (Top Glove, 2025). This consistent and inclusive social dialogue approach between union representatives and senior management is crucial to ensure that any issues, misunderstandings or employee dissatisfaction can be negotiated and resolved at an early stage harmoniously before they escalate into large-scale industrial conflicts, in order to ensure the stability of the company's operations and business continuity in the global market.
The Industrial Court is an independent judicial institution that plays a vital role in ensuring that industrial justice is upheld through the resolution of disputes between employers and employees based on the provisions of the Industrial Relations Act 1967 (Industrial Court Malaysia, 2023). In the context of Top Glove Corporation Bhd, the Industrial Court has jurisdiction to hear and determine decisions such as dismissal without cause or just cause (unfair dismissal), disputes over the recognition of a trade union, breach of the terms of a Collective Agreement (Collective Agreement) and allegations of unfair practices (Malaysia, 2021). If a dispute fails to be resolved through direct negotiation or the conciliation process conducted by the Department of Industrial Relations, the dispute may be referred by the Minister of Human Resources to the Industrial Court for a final court determination (Ministry of Human Resources, 2024). Through the powers provided, the Court may examine evidence, hear witness testimony and issue legally binding Court Awards, including orders for the reinstatement of employees, payment of compensation, payment of wages and compliance with the terms of the Collective Agreement (ILO, 2024). Therefore, this institution functions as an important check and balance mechanism in ensuring employer accountability and the protection of employee rights in large-scale organizations such as Top Glove.TOP QUALIT Y, TOP EFFICIENCYROLE OF THE INDUSTRIAL COURT AND IMPACT OF COURT AWARD ROLE OF THE INDUSTRIAL COURT AND IMPACT OF COURT AWARD5.4For Top Glove, an adverse Court Award could have significant implications for the company’s financial position, operational continuity and corporate reputation. From a financial perspective, the company may have to pay compensation, back wages, reinstatement costs, legal expenses and additional administrative costs that could affect cash flow and increase operating costs (Lawyerment, 2026). A dispute that continues to the Court level could potentially disrupt production schedules, cause product delivery delays and affect relationships with international customers (Gbadebo, 2025). From a reputational perspective, negative media coverage related to the Court Award could undermine investor confidence, impact the Environmental, Social and Governance (ESG) rating and raise concerns among global buyers about the company’s level of compliance with workers’ rights and ethical employment practices (International Labour Organization, 2024). Therefore, proactive compliance with the Court Award and strengthening constructive industrial relations practices are important strategies to protect financial performance, maintain operational continuity and strengthen Top Glove Corporation Bhd’s global reputation.In the context of Top Glove, management must ensure that any disciplinary action or dismissal is supported by sufficient evidence and complies with the principles of just cause and excuse to avoid potential Industrial Court claims. This principle is illustrated in the case of Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor (2002) 3 CLJ 314, where the Court of Appeal held that the standard of proof in Industrial Court cases involving unfair dismissal is based on the balance of probabilities rather than beyond reasonable doubt. The case highlights the importance of employers having sufficient evidence and just cause before dismissing employees, as failure to do so may expose organisations to legal and financial consequences (Abdul Hamid Mohamad, 2002).
Overall, it can be concluded that having good industrial relations management is one of the factors that can contribute to the continuity of operations, the stability of the organization and the competitiveness of Top Glove Corporation Bhd in the market. The recognition of trade unions is in accordance with the provisions of the Trade Unions Act 1959 and the Industrial Relations Act 1967 and serves as a strategic instrument to promote effective communication and positive interaction between employers and employees, and to enable more harmonious industrial relations between them. In addition, collective bargaining on wage structure, working hours, employee welfare and procedures for handling complaints has demonstrated that a balance between the interests of the employees and the financial resources of the company can be achieved by a process of understanding and mutual interest.CONCLUSIONMeanwhile, the consistent handling of conflicts and adherence to labor laws, occupational safety and health regulations, accommodation needs of employees and Environmental, Social and Governance (ESG) principles are vital for minimizing legal exposure, safeguarding the corporate image and promoting long- term business sustainability. Therefore, an effective corporate relationship management based on fairness, ethics and legal requirements is a crucial factor in achieving the success of Top Glove as a leader in the glove manufacturing industry that leads to a harmonious, productive and sustainable working atmosphere.TOP QUALIT Y, TOP EFFICIENCY
Abdul Hamid Mohamad. (2002, June 18). Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314 (Court of Appeal). Tun Abdul Hamid Mohamad. https://www.tunabdulhamid.my/index.php/judgments/item/download/997_1082ee5c1f6ba55e2b8b7120a99bdaaf Ampong, I. (2024). Assessing the effect of employee welfare and compensation on organizational performance. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2315690 Ahmad. (2019). Section 59 Industrial Relations Act 1967: The Forgotten Remedy. Journal of Malaysian and Comparative Law, 23, 95–106. https://ejournal.um.edu.my/index.php/JMCL/article/view/16113 Bursa Malaysia. (2021, December 24). Bursa Blitz: Top Glove Corporation Berhad. https://www.bursamalaysia.com/sites/5d809dcf39fba22790cad230/content_entry617bfcb139fba20f70a06557/61 c9138639fba27c7fb478b4/files/Bursa_Blitz_-_Top_Glove_-_24_December_2021.pdf?1640567914 Caruso, C. C. (2014). Negative impacts of shiftwork and long work hours. Rehabilitation Nursing, 39(1), 16–25. https://doi.org/10.1002/rnj.107 Dunston Ayadurai. (2013). Industrial relations in Malaysia : law and practice. Malayan Law Journal Sdn. Bhd., Repr. https://labordoc.ilo.org/permalink/41ILO_INST/pq1btv/alma993914463402676 Gbadebo, A. D. (2025). The Impact Of Unresolved Workplace Grievances On Organizational Performance. Wukari International Studies Journal, 9(2), 311–320. https://www.researchgate.net/publication/402473497_THE_IMPACT_OF_UNRESOLVED_WORKPLACE_GRIE VANCES_ON_ORGANIZATIONAL_PERFORMANCE ILO. (2024, January 28). Collective bargaining and labour relations. International Labour Organization. https://www.ilo.org/topics-and-sectors/collective-bargaining-and-labour-relations International Labour Organization. (2024, April 23). Responsible business conduct. International Labour Organization. https://www.ilo.org/responsible-business-conduct Jamaluddin, S. Z., Taher, M. A., & Yi, N. S. (2020). INDUSTRIAL RELATIONS IN A HIGH-INCOME NATION: IS MALAYSIA READY? UUM Journal of Legal Studies. https://doi.org/10.32890/uumjls.10.1.2019.9121 Jabatan Peguam Negara. (2024, December 14). PERINTAH GAJI MINIMUM 2024. Kementerian Sumber Manusia . https://gajiminimum.mohr.gov.my/wp-content/uploads/PUA%20376.pdf Kee, D. M. H., Lee, J. Y., Lee, Y. S., Lim, P. L., Loh, Y. M., & Hoe, Y. (2021). How Top Glove Becomes the Largest Glove Producer. Journal of the Community Development in Asia, 4(2), 1–12. https://doi.org/10.32535/jcda.v4i2.1077 Kementerian Sumber Manusia. (2024). Piagam Pelanggan. Jabatan Perhubungan Perusahaan Malaysia. https://jpp.mohr.gov.my/piagam-pelanggan/ Lee, L. (2021, March 9). Malaysia's Top Glove says no systemic forced labour found at firm, reports record profit. Reuters. https://www.reuters.com/world/asia-pacific/malaysias-top-glove-says-no-systemic-forced-labour- found-firm-reports-record-2021-03-09/ Lee, L. (2021, March 30). U.S. Customs says forced labour used at Malaysia's Top Glove, to seize gloves. Reuters. https://www.reuters.com/world/asia-pacific/us-customs-determines-forced-labour-malaysias-top-glove- seize-gloves-2021-03-30/REFERENCESTOP QUALIT Y, TOP EFFICIENCY
Lucifora, C. (2022). Performance-related pay and productivity. IZA World of Labor. https://doi.org/10.15185/izawol.152.v2 Ministry of Human Resources Malaysia. (n.d.). Code of conduct for industrial harmony. Department of Industrial Relations Malaysia. https://jpp.mohr.gov.my/en/coc-pengenalan/ Lawyerment. (2026). Industrial Relations Act 1967 [Act 177] SECOND SCHEDULE. Lawyerment.com. https://www.lawyerment.com/library/legislation/acts/1967/177/schedule/2/ Malaysia. (1990). Workers' Minimum Standards of Housing, Accommodations and Amenities Act 1990 (Act 446). The Commissioner of Law Revision, Malaysia. https://jtksm.mohr.gov.my/en/services/employees-housing- accommodations-and-amenities Malaysia. (1955). Employment Act 1955 (Act 265). The Commissioner of Law Revision, Malaysia. https://jtksm.mohr.gov.my/sites/default/files/2023-11/Akta%20Kerja%201955%20%28Akta%20265%29.pdf Malaysia. (1959). Trade Unions Act 1959 (Act 262). https://eakta.mohr.gov.my/assets/pdf/akta_jheks/TRADE_UNION_ACT_1959%20%28ACT%20262%29.pdf Malaysia. (2021). Industrial Relations Act 1967 (Act 177). Ministry of Investment, Trade and Industry. https://www.investmalaysia.gov.my/media/d32lepas/industrial-relations-act-1967.pdf Mahkamah Perusahaan Malaysia. (2023). MISSION/VISION. Mahkamah Perusahaan Malaysia. https://www.mp.gov.my/index.php?option=com_sppagebuilder&view=page&id=22&Itemid=172&lang=en Malay Mail. (2021, May 5). US Customs seizes Top Glove shipment following forced labour finding. Malay Mail ; Malay Mail. https://www.malaymail.com/news/malaysia/2021/05/05/us-customs-seizes-top-glove-shipment-following-forced- labour-finding/1971758 Marmo, M., & Bandiera, R. (2021). Modern Slavery as the New Moral Asset for the Production and Reproduction of State-Corporate Harm. Journal of White Collar and Corporate Crime, 3(2), 2631309X2110209. https://doi.org/10.1177/2631309x211020994 MECA Employers Consulting Agency Sdn. Bhd. (n.d.). Industrial Relations Act 1967: Navigating workplace disputes. https://meca.com.my/industrial-relations-act-1967-guide/ Nazry, B. (2024). Malaysian Industrial Relations & Employment - Maimunah Aminuddin - Copy (2). Scribd. https://www.scribd.com/document/607329008/Malaysian-Industrial-Relations-Employmen-Maimunah- Aminuddin-Copy-2 Pattison, P. (2021, March 30). US bars rubber gloves from Malaysian firm due to “evidence of forced labour.” The Guardian. https://www.theguardian.com/global-development/2021/mar/30/us-bars-rubber-gloves-malaysian-firm-top-glove- evidence-forced-labour Rowley, C., & Ramasamy, N. (2008). Trade unions in Malaysia. Routledge Studies in the Growth Economies of Asia, 121–139. https://doi.org/10.4324/9780203926499.ch8REFERENCESTOP QUALIT Y, TOP EFFICIENCY
Sina, P. B. (2024, July 23). Human Resource Management 3rd Edition, Maimunah Aminuddin (Page 53) - Flipbook by PERPUSTAKAAN BNU SINA | FlipHTML5. FlipHTML5. https://fliphtml5.com/kbpub/wagl/Human_Resource_Management_3rd_Edition%2C_Maimunah_Aminuddin/53/ The Commissioner of Law revision, Malaysia. (2010). Industrial Relations Act 1967. In Kementerian Sumber Manusia . https://eakta.mohr.gov.my/assets/pdf/akta_jheks/Akta%20Perhubungan%20Perusahaan%20Akta177.pdf The Edge Markets. (2018, December 11). Single News - The World’s Largest Manufacturer of Glove. www.topglove.com. https://www.topglove.com/single-news-en?id=624&title=top-glove-denies-forcing- employees-to-work-overtime Tremblay, J.-F. (2016). From principled negotiation to interest-based bargaining. Universal Journal of Industrial and Business Management, 4(2), 71–79. https://doi.org/10.13189/ujibm.2016.040205 Top Glove Corporation Bhd. (2021). Top Glove continuous improvement report. Top Glove Corporation Bhd. https://www.topglove.com/continuous-improvement-report Top Glove. (2021, May 1). The World’s Largest Manufacturer of Glove. www.topglove.com. https://www.topglove.com/single-news-en?id=19&title=top-glove-leads-the-way-in-workers-welfare Top Glove Corporation Bhd. (2024). Performance management and rewards. https://www.topglove.com/performance-management-and-rewards Top Glove Corporation Berhad. (2024). Sustainability report 2024. Top Glove Corporation Berhad. https://www.topglove.com/storage/sustainability- disclosures/December2024/TG%20Sustainability%20Report%202024_Interactive%20PDF.pdf Top Glove Corporation Bhd. (2025). Sustainability report 2025. Top Glove Corporation Bhd. https://www.topglove.com/storage/annualreports/December2025/%5BINTERACTIVE%20PDF%5D%20TG%20 Sustainability%20Report%202025.pdf Top Glove. (2025). The World’s Largest Manufacturer of Gloves. Www.topglove.com. https://www.topglove.com/corporate-profile U.S. Department of Labor. (2021). Example in action: Top Glove WRO and subsequent modification. Bureau of International Labor Affairs. https://www.dol.gov/agencies/ilab/sourcingstrong/steps-to-a-social-compliance- system/step-6-remediate-violations/example-in-action-top-glove-wro-and-subsequent-modificationREFERENCESTOP QUALIT Y, TOP EFFICIENCY