MEDIA STATEMENT RELEASED BY PARTI SOSIALIS MALAYSIA (PSM) AND JARINGAN
RAKYAT TERTINDAS (JERIT) IN RESPONSE TO THE GOVERNMENT’S STAND ON THE
MINIMUM WAGE ACT ANF THE PROPOSED AMENDMENTS TO THE LABOUR LAWS
19 AUGUST 2010
THE CIRCUS AROUND THE MINIMUM WAGE ACT AND THE DETERMINATION TO AMEND THE
LABOUR LAW
1. Parti Sosialis Malaysia and JERIT is not amused by the continuous
flip-flop and gymnastics surrounding the Minimum Wage Act and also not
amused on the proposed amendments to the Labour Laws.
2. Over the years the Government has consistently implement anti-labour
laws / pro capitalist laws. It is common knowledge that previous Trade
Unions laws, Industrial Relations Acts were specifically designed to help
the foreign companies investing in Malaysia.
3. The stark reality is that the Ruling Government’s is not interested in
implementing the – Retrenchment fund , Minimum wage Act, Automatic
registration of Trade Unions and Priority of Wages & Termination benefits
over other Debts (to over ride Companies Act)
4. What the ruling Government does is to curb workers rights and union
rights, in perpetuity. Today this Government unabashedly continues to
propose new amendments to please the FDI and perpetuate the Neo-liberal
regimes.
The Failure of the Market
PSM is pleased to hear that the Minister has finally realized the failure of
the market forces. PSM had over the years cautioned and condemned the
Government for relying on market forces to determine the well being of the
workers who happen to be the greater majority of the people.
We have all the while called for State Intervention in resolving the woes of
the workers. The Government who until now have been telling the world that
it cannot implement Minimum Wage Act because of their strong adherence to
the Market Philosophy as duly noted by the former Human Resources Minister
Datuk Wira Dr Fong Chan Onn – ‘ The government will not adopt the minimum
wage policy but instead allow market forces determine the salary level.
"That was the government’s basic philosophy.’
Now the government has to eat its own words as the current Human Resources
Minister Dr S Subramaniam said that the National Employment Return study in
2009 stressed on the need for wages to be increased, especially after the
ministry discovered that it was difficult to rely on market forces alone.
Failure of Human Resource Minister
Although Datuk Subramaniam, Human Resource Minister has recognized the low
wages earned by workers and the importance of minimum wage, he is not taking
any concrete efforts to address the matter. It has been two years and yet
the Human Resource Minister fails to bring any positive changes for the
betterment of the workers. For example, the withdrawal of implementing
minimum wage for security guards which should have implemented on 1st July
2010. Recently, the Minister was also pessimistic on the Indonesian
Government proposal to introduce minimum wage of RM600 for maids. The
Ministry is also seemed to be lacking in seriousness when they conducted a
survey on minimum wage through the Ministry’s blogspot. The Deputy Human
Resource Minister announced in Parliament that minimum wage can’t be
implemented due to poor response by the workers. When we met the Minister on
1st July this year, the Minister kept mentioning that the Government has to
safeguard the interest of the investors. As such it is difficult to
implement minimum wage. It shows that the Minister has failed to exercise
his political will to safeguard the interest of the workers. Now the
Minister talks about more time to study the proposals.
Income Disparity – Rich and the poor
A study by the Human Resources Ministry on wages in the country revealed
that almost 34 percent or about 1.3 million workers earned less than RM700 a
month, levels below the poverty line of RM720 per month. The Minister also
cited the World Bank study which discovered that the wage trend in Malaysia
had only recorded a 2.6 percent growth annually during the past 10 years
compared with the increasing cost of living during the same period.
The richest 10 percent in Malaysia controls 38.4 % country’s economic whilst
the poorest 10 percent control 1.7 percent.
These alarming statistics demand that the Government take drastic actions to
narrow down the gap between the rich and the poor. One way is to introduce
the Minimum Wage Act or by subsidizing the lower income group.
But right now the modus operandi of the Government of the day is;
i) To implement GST (Goods and Services Tax)– burdening further
the poor who will have to pay higher taxes while the rich will be given a
further deductions of their income and corporate taxes. The fact that only
15% of population is paying income tax, reflects that majority of Malaysian
are in the low income category.
ii) The relegation of the private sector as the engine of growth
in the Tenth Malaysia Plan. Thus lessening the Government’s role and
enlarging the role of private sectors. This move will definitely lead to
more neo-liberal policies to the detriment of the poor.
iii) The reduction and lowering of subsidy – will result in the
relative and absolute escalation of prices with the drop of purchasing
power. Subsequently, the fall or crashing of standard of living. The
total Government expenditure of subsidy is RM 158 billion yearly in which RM
74 billion is subsidy enjoyed by all people whereby RM 84 billion is subsidy
meant for the corporate rich and businesses. The current Government subsidy
cuts are targeted at the RM 74 billion which are enjoyed by all. But the
subsidy for the rich remain unchanged. Thus blatantly helping the rich but
not the poor.
iv) Increasing the FDI (Foreign Direct Investment). Which
virtually regulates of our market; depressing wages and the tighter labour
control / laws to beef up the FDIs
It’s the corporate agenda that is driving these amendments, not the needs or
welfare of workers. Following are the proposed amendments:
Proposal for the Amendments To The Labour Laws
The new amendment includes the following labour laws:
i) Employment Act 1955 / Akta Kerja 1955
ii) Industrial Relations Act 1967 / Akta Perhubungan Perusahaan 1967
iii) Trade Unions Act 1959 / Akta Kesatuan Sekerja 1959
*. Employment Act Amendments
This has been tabled for first sitting without the support of labour groups
such as MTUC and JERIT. Overall the amendment focus upon the increase in
“labour flexibility” and to better define “sexual harassment” in
the work-place.
Labour Flexibility
As for labour flexibility, the biggest ploy will be the issue
of the
contractualisation of labour.
The proposed amendment recognizes a new category of contractor – that is,
the Contractor of Labour, whose job is merely to supply labour. Previously,
“contractor” is also part and parcel of the work of the principal.
Now this amendment recognizes the Contractor of Labour as the
“Employer”rather than subservient or responsible to the principal. These
changes will surely make it easier to summarily lay off workers. In short
the Principal can escape from paying benefits because these wage earners are
not his workers. Also if EPF and SOCSO are not paid properly, the contractor
can say that he is not the actual employer – that he is not responsible. In
summary, the workers are short changed in this “catch-22” drama.
Section 12 – Notice of Termination of Contract
To standardize the notice period for the termination of contract for
employees to 4 weeks irrespective of the years of service. With this
amendment, long serving workers get much lesser time to prepare for
termination and hence will be compensated less. **
Section 19 – Time of Payment of Wage
To allow employers to delay payment of overtime work for as long as 30 days...
Currently it must be paid within 7 days. Most Malaysia workers rely on OT to
make ends meet. With this amendment, they will be only paid their rightful
dues three weeks later
*Below are safeguard provisions which were placed to safeguard workers
interest. The Government amendments plans to do away with these safeguard.
Among the safeguards are:*
Section 25A – Payment of Wages through Bank
The current provision requires employers to acquire consent of workers to
change the mode of payment of salaries. If the only mode of payment is going
to be banks, than it is going to bring further hardship, inconvenience and
also further cost to the workers. And in *Section 28* – Restriction on
places at which wages may be paid, the amendment can mean that the employer
can give wages to workers in brothels, pubs and toddy shops.
Also currently under *Section 34* - Prohibition of night work, there is a
provision for the DG to allow based case to case. With the removal of these
provision, it would mean workers especially female workers can be called in
odd hours without much rest to do work.
Section 44 and Section 61 requires a Register of allowances paid and
workers details be kept and this can be checked upon request. Under the new
amendment, employer can keep soft copies in computers which can be subject
to abuse
Section 60A – Hours of Work. The provision allows employers to set
unreasonable working hours where the employer can set work starting as early
as 5am.
Sexual harassment at the work place
We welcome this provision as it will address to the problems of sexual
harassment in Employment Act. Coverage is for all employees irrespective of
their wages or occupations. While the amendment is welcomed, but there is a
need to enact a comprehensive laws on sexual harassment because the offence
do not occur at work place alone.
*. Industrial Relations Act 1967
The IR Act was amended not too long ago in 2007 (during Dato Fong Chan Onn)
which has chiped away some rights of the workers. The table below shows some
of the amendments made.
Previous Amendments
1. Apart from limiting back wages to 24 months, the courts are now
mandated to take into account post termination gainful employment and
contributory conduct.
2. However, the amendments did not mandate the courts to impose
punitive damages in cases where in all fairness there must be another
provision for the court to take into account the pain and suffering of
workers when dismissed. Nor are there provisions for punitive damages where
employers acted wantonly in dismissing workers whose only misconduct may be
to promote or participate in a trade union in the workplace.
3. To limit backwages for probationers to 1 year. Probationers could
have left secure jobs to take up new employment (on probation)
The current Minister is proposing the following amendments which will
further deteriorate the rights of workers. The amendments are as follow:
Section 20 – Representations on dismissals
- Employees with less than one year of service (probationers) are
excluded from seeking reinstatement via section 20 of IRA;
- Employees earning a basic salary of RM 10,000 or more are excluded from
seeking reinstatement via section 20 of IRA;
- Employees with fixed term contract are excluded from seeking
reinstatement via section 20 of IRA if termination is as per contract terms.
This would mean more workers will be excluded protection under Section 20
Other Amendments
i. Mandatory conciliation at Industrial Relations Department
(IRD) - Dismissal cases would not be referred to Industrial Court under
certain circumstances such as:
- Employee has accepted mutual separation package;
- Expiry of fixed term contract;
- Termination of employee beyond the mandatory retirement age of the
company;
- Where the employee rejects reinstatement;
- Cases of amicable settlement and employee has accepted settlement.
ii. To allow HR specialist / consultants to represent parties at the
conciliation proceedings and hearing in the Industrial Court
iii. To enable Industrial Court to strike out frivolous or vexatious
cases
iv. To allow for direct appeal to High Court pursuant to Industrial
Court Award on dismissals by way of rehearing instead of judicial
review currently. This gives unfair advantage to employees given their
financial resources. Unions and workers with limited or no resources
cannot afford to engage lawyers to represent them at the High Court.
Besides the amendment to the Employment Act and IRA, there seems to be
further plans to curb Trade Union Activities.
Under Section 5(2)(B), Executive & Security categories are now prohibited
from being members of trade unions besides that there are plans to empower
the DGIR to review status of union which has been given recognition. upon
request after a minimum period of five years. The proposed amendment will
enable employers to perpetually deny workers collective bargaining rights
PSM & JERIT DEMANDS :
*. Immediate steps must be introduced to narrow the gap between the rich
and the poor and the need to;
i. Introduce the Minimum Wage Act
ii. Reduce subsidies to Industries and Businesses but maintain subsidies
for the poor
iii. Stop all measures to implement the GST and to maintain or increase the
corporate tax
*. Stop Tabling Anti-labor legislation
i. Stop all amendments to Labour laws
ii. Introduce laws such as Retrenchment fund , Minimum wage Act,
Automatic registration of Trade Unions and Priority of Wages &
Termination benefits over other Debts (to over ride Companies Act)
1. It is time the Government review its fundamental philosophy. The Tenth
Malaysia Plan calls for major role to be played by the Private Sector. It is
proven that it is the social and political responsibility of the State to
ensure the well being of its workers and the rakyat. We call for Government
to safeguard key public sectors such
i. Public hospitals and health care system
ii. Free and affordable Public education system
iii. Affordable and decent homes
iv. Efficient and cheap public transport
Released by :
Parti Sosialis Malaysia & Jaringan Rakyat Tertindas
(JERIT)