The system theory of John Dunlop is one of the traditional perspectives on the employment relationship. He trusts that if stakeholders bound together over a settled ‘web of rules’ can be seen as a distinct system in industrial relation. According to Dunlop (cited in Teicher, Holland & Gough 2006, p.34), he explains “The establishment and administration of these rules is the major concern or output of the industrial relation sub system of industrial society...”. His system theory provides the knowledge, process and practices to the employment relationship. The structure of Dunlop’s system theory which mainly contain four elements, 1) The Actors in a system, 2) The Contexts of a system, 3) The Establishment of rules, 4) The Ideology of an Industrial Relation System (Dunlop 1984, p.35). Three groups of actors to interact with each others are managers and their representatives, employee and spokesmen, and the other governmental agencies with an interest in industrial relations. Besides, the environmental factors can be affecting through the process. Dunlop (1984) identifies three aspects of the context and they are technological factors, the market or budgetary factors and the locus and distribution of power. The third part in Dunlop system theory is the establishments of rules which call web of rules as well. Procedural rules and Substantive rules are two types of rule in the system to use to govern the employment relationship. Abbott (2013) note that procedural rules are about process, to use established and administered rules to consider the means and it can help for settle down dispute caused by labour contracts. Besides, it is to make rules and can be applied to particular situation. He mentions the remuneration rates, rate of damages, responsibility and presentation of employees are the examples of substantive rules and its terms and conditions use to regulate the workplace relation between…