Literature review states that the basis of employment relations as a field of study is to investigate the nature of the relationship between employer and employee. Thus, this study was conducted to investigate employment relations in the informal sector by using a framework introduced by Goss (1991) to interpreting employment relations in small firms that can be understood with regard to two related dimensions: First, the extent to which employers is dependent on his or her employees, and vice versa; and second, the extent to which employees have the capacity individually or collectivity, to challenge the power of their employer. Based on these two dimensions, four distinct categories have been identified that reveal the complexity and diversity the nature of employment relationships in the informal sector, namely is 'fraternalism', 'paternalism', 'benevolent autocracy' and 'passive acquiescence' The study employ qualitative approach and in-depth interviews with four employers and four workers in the informal sector in Lawas, Sarawak. The findings show that the nature of the employment relations in the informal sector is 'benevolent autocracy' or employers are less dependent on their employees, resulting in limited labour capacity to challenge the employer's power. Characteristics of the informal and unregistered informal sector which result in lack of protection to workers are the main reason for the employment relations in the informal sector. This study also contributes to the redefinition of the term of employment relations in the informal sector and then suggest for policy reforms in the context of the informal sector, particularly in protecting the rights of workers. [ABSTRACT FROM AUTHOR]