The BN government must keep its July 2012 minimum wage promise to workers, says Charles Hector.
With the adoption of the Minimum Wages Order 2012 dated 16 July 2012, the BN government promised Malaysian workers minimum wages in January 2013. Although employers with five or less workers were exempted from this ruling until July 2013, Malaysian workers were thankful and awaited eagerly to receive an increase of their basic wages to the statutorily fixed minimum wage of RM900.
However, with the announcement of the Minimum Wages (Amendment) Order 2012 on 28 December 2012, over 600 listed Small and Medium Enterprise (SME) employers were permitted to delay paying their workers – until April, July or even October 2013 – the stipulated minimum wage. The latest Order further allows the SME employers to delay payment of minimum wages to their migrant workers until December 2013 (New Straits Times, 20 March 2013). So, even before the Order could be fully implemented, it has been revised and revised.
All workers in Malaysia must be entitled to receive Minimum Wages, and a delay of this right to SME and migrant workers, as stated by the National Wages Consultative Council (NWCC) is unacceptable. The NWCC pronouncement certainly goes against our Federal Constitution that guarantees equality to all persons (Article 8) and also the spirit of Section 60(L) of the Employment Act 1955. Both laws are clearly against any form of discrimination amongst workers, regardless of whether one is a local worker or a migrant worker. It also goes against the core principle of the International Labour Organisation (ILO) that is against any form of discrimination in respect of employment, and of Article 23(2) of the UN Declaration of Human Rights that clearly states that “Everyone, without any discrimination, has the right to equal pay for equal work.”
Equal pay for equal work
When the Malaysian government decided to transfer the obligation of paying levies from employers to migrant workers, it reversed the policy behind the introduction of the levy, which was to deter employers from hiring foreigners rather than local workers, and to protect the employment opportunities of the local worker.
The present move to allow employers who pay migrant workers minimum wages to deduct their wages to recover the levy was strongly and rightly criticised by many quarters. Some 82 groups issued a joint statement entitled, ‘Minimum wages for all workers, including migrant workers – No to wage deduction to recover levy payable by employers’ on 5 February 2013.
Khalid Atan, the President of the Malaysian Trade Union Congress (MTUC) said it best when he stated: “…if workers were asked to pay the levy, the minimum wages policy would not benefit them at all, as whatever little increase in salary they enjoyed, would be wiped out with the levy payment…” [The Star, 10 January 2013, ‘MTUC: Don’t give in to employers’ demand on foreign workers levy’]
Some SMEs are big companies
The Malaysian government seem to be cowing to demands of employers who fall within the category of Small and Medium Enterprises (SMEs). There is talk of delaying minimum wages for migrant workers until December 2013.
I always had the impression that these SMEs were small businesses, but this changed when I visited SME Corp Malaysia’s official website. Instead, I discovered that SMEs included micro-enterprises, small enterprises and medium enterprises. Medium enterprises include businesses having a “sales turnover between RM10m and RM25m” or employing between 51 and 150 full-time workers.
In my opinion, such employers should not be exempted from paying minimum wages to their employees. Likewise, small enterprises include those with “…sales turnover between RM250,000 and less than RM10m OR full-time employees between 5 and 50…”. Thanks to the contractor for labour system, many of these businesses would easily fall within the definition of SMEs by simply having more workers, supplied by contractors for labour, who will not be considered their employees.
BN government must follow the law
A look at the Ministry of Human Resources website, reveal that all this talk is based on only a statement issued by the NWCC, which really has no power but to make recommendations to the government. To date, no order by the Minister has been gazetted. It follows that these SMEs still have to pay all their workers, including migrant workers, the minimum wage, beginning from January 2013, unless they are employers given special exemption vide the 28 December order. Or if they are employers with five or less employees.
If workers were already entitled to receive minimum wages in January 2013, it would also be wrong to try and extinguish that right by some later gazetted order. Even if there be such an order, employers should still pay the minimum wages from January 2013 until such an order comes into effect.
In the same New Straits Times report, the National Wages Consultative Council (NWCC) reportedly said that employers “…would be given blanket approval for deductions of levy and cost of accommodation …” from migrant worker wages. In fact, this matter goes beyond the mandate or powers of the NWCC. Rather, it is a matter covered by law.
Permissible wage deductions are explicitly stated in the Employment Act 1955. For example, deductions to recover the cost of accommodation are permissible. However, the legal requirement is that there must be a request in writing by the employee, and thereafter special permission of the Director General of Human Resources. If the worker does not make such a written request, there can be no wage deduction for such matters.
Unjust to increase liabilities of migrant workers
After a migrant worker has agreed to come to Malaysia to work, usually for about five years, and/or is already working here, it is wrong and unjust to suddenly impose additional and new liabilities on migrant workers – for such liabilities affect their income. Any new liabilities should rightly be imposed on migrant workers who have not yet agreed to come to work in Malaysia. I believe that such awareness of permissible deductions would affect their decision as to whether to come to work in Malaysia. As it is, without these new financial burdens, many migrant workers already incur personal debts of RM4,000 to RM5,000 after they have started working in Malaysia.
Local workers’ rights also violated
Local workers felt cheated too when they discovered that with the implementation of the minimum wages order in January 2013, their take-home pay was less than before. Indeed, many employers removed the pre-existing allowances and other benefits, and re-structured the remuneration of workers; in some cases this was done even without the workers’ knowledge or consent.
This was the grievance of Felda plantation workers in Triang for instance (Sinar Harian, 8 February 2013, ‘Kesal gaji baru makin kurang/Regret that new salary is less’). Workers at a computer parts factory in Senai, amongst others, alleged that their employer, without prior notice, changed normal hours of work from 44 hours to 48 hours! (Sinar Harian, 19 February 2013, ‘Pekerja kilang mogok kerana masalah gaji/Factory workers strike because of wage grievances’).
In other cases, workers were literally forced to sign documents agreeing to these changes; the alternative was possible loss of employment. Workers without unions were most vulnerable to such practices.
What ‘janji ditepati’?
Since 2012 Merdeka Day, Malaysia’s Prime Minister and this BN government have been going on and on about ‘Janji DiTepati (Promises Kept)’, but alas to workers in Malaysia these were nothing but false promises. The July 2012 promise to workers earning wages below poverty-line income or RM900 is certainly a ‘janji TIDAK ditepati (a promise NOT kept)’.
It is sad that Malaysian Trades Union Congress seems to have not come out with any public statement of the breach of not just the promises, but also of the law. Thankfully, Senator Syed Shahir, the immediate past President of the MTUC did come out with a statement, ‘Malaysia must keep its promise to workers made in July 2012 – Stop discriminating workers, including migrant workers’ on 26 March 2013.
BN has caused Malaysian workers to lose employment security and many rights
Workers in Malaysia are losing fundamental rights of employment security – the right to regular employment until retirement age. Regular employment is being replaced by short-term employment contracts, which is discriminatory to workers that claim rights, women (especially when they are pregnant), and older workers.
Fundamental principles that workers should not be discriminated against and/or terminated when they are in the process of forming trade unions or getting unions recognised have been breached when the law was amended allowing employers to get rid of workers when their short-term contracts end. Employers are free to recruit new workers for the same job when the contracts of the short-term contract employees end. The BN government even allows employers to totally avoid an employment relationship by just using workers supplied by contractors for labour.
In short, over the years, the BN government’s policy and laws have been against workers and trade unions. But come every general election, workers in the public sector are awarded a lot of ‘gifts’ and benefits – but not the private sector workers in Malaysia.
Malaysian workers will decide the outcome of the next general elections
Malaysians today are no longer gullible as before. Thanks to the internet and social media, more people are aware of the ‘false promises’ and hidden truths. Workers and parents of future workers are also becoming aware that even fundamental worker rights are no longer protected. Today, workers can even be compelled to work for more than eight hours per day, or more than 48 hours per week, no thanks to the perennial amendment of labour laws during BN’s long rule.
Let us not forget that one of the biggest class of voters in Malaysia is still the workers. Come this election, they may finally exercise their power at the ballot box!