Under the Trade Union Act 1959, a 'trade union' is defined as any association or combination of employers or of employees, with a particular establishment or trade or occupation or industry, or within similar trades or occupations or industries.

The responsibilities of trade unions are, among others,

• to promote the industrial, social and intellectual interests of its members
• to obtain and maintain for its members just and proper rates of remuneration
• to improve security of employment and reasonable hours and conditions of work
• to promote the material, social and educational welfare of the members
• to promote legislation affecting the interests of the members in particular or trade unionists in general
• to protect members against unfair treatment by employers or employees

  Besides, trade union must fulfill at least one of the following:

• the regulation of relation between employers and employees for the purpose of promoting good industrial relations between them, or of improving the working conditions of employees, or of enhancing their economic and social status, or of increasing productivity
• the regulation of relations between employers and employers, or between employees and employees.
• the representation of either employers or employees in trade union dispute.
• the conducting of or dealing with trade disputes and matters related thereto
• the promotion or organization or financing of lockouts or of strikes in any trade or industry, or the provision of pay or other benefits for its members during a lockout or a strike.

  The above definition determines the composition of trade union, and qualifies the basic trade union rights of employers and employees as stated in the Industrial Relations Act 1967. It has greatly influenced the composition and the formation of trade unions.
  The definition implies that a trade union

  can be composed of either employers or employees, but not both employers and employees

  can draw its members only from Peninsular Malaysia, Sabah or Sarawak, but not pan-Malaysia

  can draw its members only from a particular establishment or trade or occupation or industry, or similar trades or occupations or industries (in the opinion of the Director-General of Industrial Relations)

  can be any association described above even though it has not been registered as such.

  The definition requires the formation of separate unions for employers and employees, which is essential to ensure the dependency of a trade union. It also allows for a wide choice in union formation because employees may choose between trade or occupational or industrial establishment of a trade union.
  
  On the other hand, the above definition has the following defects:

  trade union need not be called a 'union'. Many employee unions call themselves 'associations', which gives an impression that these are professional bodies of a particular occupation. On the other hand, all employer unions call themselves association, which does not indicate the status of a unionized establishment.

  membership of unions is limited geographically as trade union can be established regionally either in the Peninsular, Sabah or Sarawak. A truly national trade union comprising employers or employees in Peninsular Malaysia, S & S is not possible due to the above definition. For example, there are three separate employer unions of Commercial Banks Association throughout Malaysia -- one in Peninsular Malaysia, one in Sabah and another in Sarawak.

  the formation of trade unions can be based on an establishment of trade, occupation or industry, without restriction on the number of trade unions that may be formed on any one basis. As such, there can be multiple trade unions of the same trade, occupation or industry, which inevitably weakens the representativeness of the respective unions.

  unions of a general nature are not permitted. Members of a trade union must be homogeneous, i.e. they must fall in a particular establishment, trade, occupation or industry and therefore possesses common interest. For instance, the Director-General of Trade Unions has decided that the electrical and the electronics industry are not one and the same, and therefore one union cannot represent workers in both areas.

  any organization or group of workers established to achieve one or more of the objectives stated in the Act is considered to have formed a trade union, and must therefore conform to all legislative requirements of a trade union.

  legislation relating to trade unions in Malaysia i.e. the Trade Union Act is believed to weaken trade union movement. For instance, in 1983 only 15 per cent of employees in the country is unionized; this 15 per cent is further distributed among more than 360 employee union. Trade union movement is fragmented due to the variety of choices given to employees and also the hostility of employers to unions.