Home 2007: 5 Workers prefer dialogue but…

Workers prefer dialogue but…

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….what are they to do when one Prime Minister after another repeatedly denies them their just and reasonable demand for a minimum wage, wonders K George.

Iwish to refer to the Datuk Seri Najib Tun Razak’s statement on 26 June 2007 pertaining to the nationwide picketing organised by the Malaysian Trades Union Congress (MTUC) the previous day. Najib’s advice to trade unions is to resolve problems amicably.

I was deeply involved in trade union activities for more than 35 years. Even now I keep in touch with the MTUC and even Cuepacs.  The leaders of these organisations are committed to dialogue in solving issues and problems.  It is an established practice that no dialogue can commence with one party alone.


Let me put in writing some of my recollections. The first Prime Minister had never ever refused to meet the MTUC leaders.  He would jokingly tell us, “All the money is with the Finance Minister (Tun Tan Siew Sin); anyway I will try to persuade him.”

Tun Abdul Razak had insisted on maintaining a mutual relationship.  Occasionally, he would invite the union leaders for a get-together at his home.

As far as Tun Hussein Onn (Najib’s uncle) was concerned, there was no difficulty for the MTUC leaders to meet him. Here I must mention that a number of Cuepacs leaders were also MTUC leaders.

Now the fourth Prime Minister, Dr. Mahathir Mohamad, told the MTUC in response to a request to meet him: “I have nothing to offer you and so I don’t want to waste your time!”

He also had a field day persistently criticising the MTUC. He even went so far as to support the setting up of rival organisation known as the Malaysian Labour Organisation (MLO). Fortunately for the labour movement, it did not take long for MLO to go out of existence.

Mahathir’s deputy, Datuk Seri Anwar Ibrahim, however, maintained very close rapport with the MTUC.  He was wise enough to recognise that the MTUC was an organisation championing the cause of the working people irrespective of race, religion, caste and creed.

All of a sudden in 1998 Mahathir changed his mind. The MTUC received a call from the PM’s office asking the leaders to attend a meeting with Mahathir, which was held in August 1998.  You may ask me the reason for Mahathir’s apparent change of mind. Well, he was preparing the ground for getting rid of Anwar and teaching him a lesson.

Enter Datuk Seri Abdullah Ahmad Badawi in Putrajaya as the fifth Prime Minister on 31 October 2003. In keeping with the practice, the MTUC addressed a letter to Abdullah, the new Prime Minister requesting for a meeting three years ago. Subsequently three reminders were sent but there was no response whatsoever. A memorandum was also submitted proposing a minimum wage of RM900 per month many months ago.  Again there was no reply. Haven’t you heard Abdullah emphasising the importance of an efficient delivery system? You can now well imagine how efficient the delivery system is in the Prime Minister’s department!  Is it any wonder that the delivery system is no better in the rest of the country?

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The struggle for a minimum wage is a long one stretching over many decades.  And when there was no indication that this issue was going to be viewed sympathetically, the MTUC staged demonstrations to push for the implementation of the minimum wage.

Mildest form of protest

Abdullah on returning from a honeymoon-cum-official visit to a few countries on 26 June 2007 commented on the picketing organised by the MTUC by claiming that foreign investors would be reluctant to invest in Malaysia.

I should emphasise that picketing is the mildest form of protest.  It lasts just a couple of hours – usually lunch time or just before closing for the day.  Foreign investors are not normally scared of picketing.  Within the first five months of the year, the manufacturing sector alone attracted RM25.5 billion foreign investment.  They come and invest because wages are reasonably low and the trade unions have never been a threat for a number of  years now.

While it is all right for the government to provide reasonable facilities to foreign and local employers, there must also be sufficient protection for local workers so that they will not be exploited.  But too often our workers are exploited simply because they are not allowed to be  unionised.

Addressing this year’s May Day rally in Putrajaya, the Prime Minister praised the workers.  He said, “The workers in Malaysia are an asset”.  In my recent article on May Day, I, as an ex-trade unionist, expressed my appreciation for the Prime Minister’s high regard for workers.

Now that the Prime Minister has proposed negotiations on the demand for a minimum wage enactment, I am happy to mention that the MTUC president told me that he and his colleagues are waiting for an appointment with the PM. Bro. Syed Shahrir, the president, said that since the issue is very important, the MTUC wishes to meet the PM face to face.

Numerous nations – both developed and developing – have adopted a minimum wage legislation.  It must be emphasised that the MTUC is on record for having waged a relentless struggle for minimum wage for more than 44 years.  Occasionally, the matter used to be raised during the tripartite meetings of representatives of the government, employers and trade unions but the issue was never addressed seriously and was allowed to drag on frustrating the workers.

The RM900 figure

The sum of RM 900 as minimum wage was proposed in August 1998 when Mahathir met the MTUC leaders at the meeting called for by him.  At that meeting, Mahathir surprisingly maintained that RM 900 was not enough for an average family of five persons to survive for a month.  Instead, he proposed that the minimum wage should be RM1,200. His excuse for not implementing his proposal of RM1,200 immediately was the financial crisis at that time in Malaysia.  But when the economy started to improve gradually, Mahathir left the scene in October 2003 without resolving the minimum wage issue.

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In the meantime, a few months after the August 1998 meeting with Mahathir, the then president of the MTUC, Zainal Rampak was offered a  senatorship which he accepted without any consultation with his own union or the MTUC.  May I also mention that the Malaysian union leaders had a long time ago accepted an unwritten understanding that they would not accept “pangkats” (honorifics) such as Datukships, Tan Sris, and appointments as senators from the government in order to maintain their credibility as workers representatives fighting sincerely for the welfare of the workers without giving any impression that they could have compromised themselves.

I asked the MTUC as to why they stuck to RM 900 and did not take up the suggestion of Mahathir which was RM 1,200.  The answer was straightforward and convincing: “It is the first claim submitted to the government after Abdullah became the Prime Minister.”

Unscrupulous employers not happy

I understand from reliable sources that the majority of employers do not want a Minimum Wage Act enacted not because the proposed RM900 is too high a wage.  Then, what could be the reason?  

Well, all private sector employees are entitled under the law to EPF contributions from their employers at the rate of 12 per cent of their basic salary  while the employees themselves contribute another  11 per cent of their basic salary. Both contributions must be sent to the Employment Provident Fund office monthly. This is a form of retirement benefit fund to enable workers to retire with reasonable savings to carry on with their life with peace of mind.  For example if your basic salary is RM1,000 a month, the employer must contribute 12 per cent, which is RM 120, and the workers should contribute 11 per cent, which is RM110, from their salary, making a total of RM 230 savings a month (plus interest).

When the workers are protected by trade unions, the law is strictly followed but the most pitiable and unfortunate situation in Malaysia is that union protection is not largely available.  Not even 10 per cent of the workers in the private sector are members of trade unions.  It is a fact that both local and foreign employers would try their best to deny their workers their right to membership of a union. The government connives with them by closing one eye.  There are also employers who try their best to discourage their workers from becoming members of trade unions, in spite of the fact that it is illegal to do so.

Let me come back to the workers who get RM1,000 a month.  Some unscrupulous employers will cheat the workers by preparing a pay slip stating that the basic salary is RM300 for example and the remaining amount of RM700 will be listed as allowances for overtime, transport and for working on weekends and public holidays etc. Thus the EPF contribution by the employer is based on RM300 rather than on the actual pay of RM1,000.  As a result, the employers’ contribution is drastically reduced to RM36 instead of RM120 and the workers contribution is reduced to RM33 instead of RM110.  In other words, the workers lose out RM84 per month in the savings account for their old age.  Of course, the employees concerned could report this matter but they would not because they would be afraid of losing their jobs as a consequence of their action.

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If there was a minimum basic wage, the employer cannot play with the figures but will be forced to  calculate not only the EPF contribution but also any payment for overtime and for working on weekends and public holidays based on actual salary.

Finally, a minimum wage law is usually applicable nationwide, not based on industries or on the cost of living in certain states or regions.  Such problems could be taken care of by introducing special allowances and/or other facilities on a temporary basis.

Low-wage developed state?

As I was about to conclude this piece, I came across a press statement by the Selangor Menteri Besar.  He said that the introduction of a minimum wage will prevent foreign investors from participating in Selangor’s anticipated new business enterprises.  Khir Toyo is a Tan Sri and a doctor. Does he know that a minimum wage is neither a super wage nor a fair wage?  You are on record as having declared that Selangor is a developed State in a developing nation – Malaysia.  If that was the the case, then you must follow the wage structure of our nearest neighbour, Singapore.  But will you set the example of a developed state for others to follow?

Malaysia is by and large a rich nation with petrol, gas, tin mines, palm oil, rubber and, over and above that, foreign investments.  Corruption, misappropriation, incompetence, inefficient management and money politics have been eating away our wealth at the expense of the poor workers who contribute tremendously towards the development of this nation.

It is time we protect the interests of workers who generate growth and enrich the country.

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