In this paper, the author explains the concept of economic analysis of law in understanding labour law. The emphasis is on the philosophical and theoretical aspects of labour law through the economic analysis of law perspective. Study of labour law in law schools has always been based on a purely legal method or perspective, with an instruction approach focused on statutes and case-law and with reference to a theoretical legal framework. However, labour law is a subject with multi-dimensional roots and facets consisting of components of sociology, economics, politics, religion and management disciplines. In this paper, the author will introduce a method, the trans-disciplinary approach, that is relevant to understanding the working of Malaysian labour law and that uses an economic analysis of law perspective. The enactment of legislation is to a large extent propelled by economic demand, which is apparent in labour law. The methodology used for discussion of this paper is 'legal analysis'. This new approach will not change the entire method of teaching conventional labour law. The introduction of this new approach will only comprise 30% of the current conventional labour law syllabus at Master level. Understanding the concept of economic analysis of law will enhance students' knowledge for future study of labour law and economics.