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Serious lack of concern for workers in Budget 2015

A workers' protest in Malaysia

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If the situation of precarious employment does not change, Malaysia may very well continue to be listed as one of the worst countries for workers and trade unions, warns Charles Hector.


It is a sad day for workers in Malaysia, more so for those in the private sector, when our Prime Minister, in his Budget 2015 speech seemed to have forgotten to make serious allocations to end the exploitation and precarious state that workers and unions find themselves in today.

Workers should have been a major priority in the light of the US State Department Trafficking in Persons Report 2014, which downgraded Malaysia to Tier 3 from its previous standing of Tier 2 Watch List; the main reason was because of worker exploitation.

Workers should have been a major priority when Malaysia was ranked among the worst countries in the world to work in, according to the recently released International Trade Union Confederation (ITUC) Global Rights Index

Minimum wage – Only three employers taken to court?

Malaysia’s priority previously, and maybe still is, was to draw in foreign investors to Malaysia. What Malaysia offered was cheap docile labour. It was only in 2012 that Malaysia finally made the mininum wage mandatory. Even then, so many employers were given exemptions, and the final deadline was to be 1 January 2014.

But recently, Deputy Human Resources Minister Ismail Abd Muttalib stated that about 10,000 employers in the private sector had not yet implemented the minimum wage scheme since it was enforced on 1 January (Malay Mail, 20 September 2014, ‘Malaysia nearly 10,000 employers yet to implement minimum wage scheme’).

The Deputy Minister tried to belittle this failure to protect workers by stating that this was only five per cent of the 200,000 employers. But the real question is, how many thousands or millions of workers have been denied this right to receive a basic wage of RM900 per month, or RM800 per month for those in Sabah and Sarawak which they surely should have been enjoying since July 2013, if not for the exemptions given and the lack of enforcement.

The disturbing fact is that only three employers out of that 10,000 have been taken to court. I would want to believe that this lack of enforcement and failure to take action against errant employers could only be due to a lack of human and other resources in the Ministry of Human Resources. I would not want to believe that this was because of a lack of political will or a ‘pro-employer’ bias – i.e. not being bothered about the workers’ policy of the Malaysian government.

Propagating an environment of worker exploitation?

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The Deputy Minister suggested that workers should lodge complaints. Alas, workers are just too afraid that their employers would simply terminate them if they did so. What is needed is active enforcement. This means the Human Resource Ministry officials must play an active role in ensuring that all employers are actually paying their workers basic minimum wages and respecting the rights of workers and the law.

Even in 2014, except for the capitals of the states and the Federal Territories, we still do not have an industrial relations department in all the towns for workers who are wrongfully dismissed to lodge complaints. To expect a worker to travel 100-plus kilometres to lodge a complaint about wrongful dismissal and claim justice may lead one to the conclusion that the government really is not interested in justice for workers.

What’s more, some states still do not have Industrial Courts, when it really should be available not just in capitals but also in reasonably sized towns. It should be made easy for workers and their witnesses, who are usually other workers, to be able to go to court.

No allocation for legal aid for workers claiming rights

At the Human Resource Departments (or Labour Office), workers can go and lodge complaints against employers for non-payment of wages, overtime, rest days and various other violations of worker rights.

But ordinary workers badly need legal assistance to be able formulate and quantify their claim, and, more importantly, prove their claim in the Labour Court if and when attempts at reconciliation fail.

In most case, employers are represented by lawyers or those familiar with labour law, and the workers are unrepresented. This unfairness prevents workers from obtaining justice. Legal Aid is needed for workers before and when they submit their claims and when they have to prove their claims. The government can provide resources to make this legal assistance for workers available.

Inadequacy of officers and courts delays justice

Access to justice is available in the Industrial Relations Department and the Human Resource (Labour) Department. If the problem remains unresolved, there is conciliation at the Labour Courts or the Industrial Courts. The biggest complaints by workers and trade unions is the slowness of the entire process. A wrongful dismissal case can take several years which is most detrimental to justice, bearing in mind the workers and their families are the ones suffering while the employer happily carries on with business.and making profits. Again, this state of affairs can only be because of the lack of officers, judges, IRD offices and courts.

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Government failure in curbing precarious employment jeopardises employment and financial security for worker and their families

The Malaysian government failed to ensure that workers continue to enjoy regular employment until retirement. This has opened the door to more precarious forms of employment such as fixed-term or short-term contracts and the ‘contractor for labour’ system. This latter system allows workplaces to be able to use the workers of third parties and hence to avoid employers’ obligations and duties – for, after all, these third party workers are not their employees.

The result: without employment security, workers easily lose their jobs and become unemployed maybe not for long but maybe until they find a new job. The government has to really provide for a government unemployment benefit scheme because even if there is no income, monthly financial commitments continue.

Regular employment until retirement will guarantee growing income and benefits for workers. On the other hand, precarious short-term employment contracts and the ‘contractor for labour’ system throws workers out of the employment market continuously, forcing them to find new jobs. This may mean income and benefits may actually decrease or even stagnate.

Wasted skills due to precarious employment

The government talks about getting more skilled workers, and skill is also achieved at the workplace. Workers in the electronics industry who have gained skills may be let go after their nine-month contracts expire despite the workplace still requiring workers. These workers will then be forced to find other jobs. If there are no nearby electronics factory hiring workers, they may have to find work in a totally different industry – hence a loss of all the skills obtained.

Budget 2015 – Private sector workers not a priority and no financial allocations?

In paragraph 96 of the Prime Minister’s speech, he talked about reviewing labour laws, something that the government has always been talking about. Most amendments of late have generally not been helpful to workers or their unions. He talks about an “employment insurance system aimed at assisting retrenched workers by giving temporary financial assistance as well as providing opportunities for reskilling and upskilling”.

But what about other employed workers who have reached the end of their short-term employment contracts, those who have been allegedly wrongfully dismissed by employers and those who escape exploitative employers or sexual harassment by resigning. Oddly, there is no money allocated for this at all or even within a time frame.

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The point he makes here is with regard to the JobsMalaysia portal, when really workers want employment security which will generally provide increasing income and benefits, and most importantly financial stability for the worker and their families. (There is a provision for educational and vocational training of RM30m for Indian youth.)

Low-interest loans for private sector employees – MBSB

Private sector workers also need to get homes, like public sector employees who have access to low-interest loans, but there is no provision for such loans for the private sector workers.

Now, the money of the private sector workers is in the Employees Provident Fund (EPF), which at present owns Malaysian Building Society Berhad (MBSB), which in turn provides housing loans and could be used to provide housing loans at the same terms as what is now available to public sector employees.

We want rights not discretionary ‘handouts’

In this budget, the government continues to prefer to treat Malaysians, including workers, like beggars through uncertain financial assistance like BR1M, which is not a guaranteed right, but something that depends on the discretion of the government. We may have it in 2015 but in 2016 it may be no more. Malaysians prefer not to be dependent on such ‘charity’ but would rather prefer employment and financial security.

Workers and the marginalised must be a priority

The Malaysian government must never forget that it serves all of us here in Malaysia, and priority should be given to the poor and marginalized – workers included. Like the country, workers desire economic and financial stability: regular employment until retirement will guarantee increasing income and benefits with tenure. When they are denied such rights or are exploited, they demand speedy justice.

Workers also need active proactive enforcement by officers of the Human Resource Ministry, just like our police and local council workers are doing to catch drivers who fail to display their parking tickets. Workers also need unemployment benefits when they are in a state of unemployment. But alas, the Budget speech seems to have failed to address the concerns of the majority of workers who are in the private sector.

If this does not change, Malaysia may very well continue to be listed as one of the worst countries for workers and trade unions.

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