labour situation in m'sia

7/29/2019 labour situation in m'sia

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place of employment means

any place where work is carried on for anemployer by an employee;

employee means

any person or class of persons

(a) included in any category in the First Schedule tothe extent specified therein; or

(b) in respect of whom the Minister makes an order

under subsection (3) or section 2A;

EMPLOYMENT ACT 1955


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EMPLOYMENT SENARIO Place

of employment

Types ofEMPLOYERSTypes ofWORKERS

Types ofCONTRACTS


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Types of EMPLOYERS

employer means any person who has enteredinto a contract of service to employ any other

person as an employee and includes the agent,

manager or factor of such first mentioned person,

and the word employ, with its grammatical

variations and cognate expressions, shall be

construed accordingly;

EMPLOYMENT ACT 1955


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Principal means any person who in the course ofor for the purposes of his trade or business

contracts with a contractorfor the execution by orunder the contractor of the whole or any part ofany work undertaken by the principal;

Contractor means any person who contractswith a principal to carry out the whole or any partof any work undertaken by the principal in thecourse of or for the purposes of the principalstrade or business;

EMPLOYMENT ACT 1955


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Sub-contractor means any person who contracts with acontractorfor the execution by or under the sub-contractor ofthe whole or any part of any work undertaken by the

contractor for his principal, and includes any person whocontracts with a sub-contractor to carry out the whole or anypart of any work undertaken by the subcontractorfor acontractor;

Sub-contractor for labour means any person who contractswith a contractor or sub-contractor to supply the labourrequired for the execution of the whole or any part of anywork which a contractor or sub-contractor has contracted tocarry out for a principal or contractor, as the case may be;

EMPLOYMENT ACT 1955


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LocalWORKERS

DirectApplication

(orwalk-in)

Job MalaysiaMOHR JTK

PrivateEmployment

Agency

FACTORY(Principle Employer)

PLACEMENT

PROBATIONfollowed by

PERMANENTContract

Temporary(FIX TERM)

contract

LOCAL Workers seeking employment

PRIVATE EMPLOYMENT AGENCY ACT 1981

20% commission of 1st Monthswage charged on placement. Paideither by employer or the worker.


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MigrantWORKERS

Contract of Service/Temporary(FIX TERM)

contract


MIGRANT Workers employment

EMPLOYMENT (RESTRICTION) ACT 1968

Non-citizen shall not be

employed unless there has

been issued valid

employment permit.


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MigrantWORKERS

Contract of Service/Contract for Service

Temporary(FIX TERM)

contract

Labour Contractors(Outsource Company)




TODAY

TOMORROW

THE DAY AFTER

MIGRANT Workers employment

No Law to regulate?Outsourcing License No.,Recruitment No. KHEDN.

Labour Contractors(Outsource Company)Labour Contractors

(Outsource Company)

NOW.LOCAL Workers also

follow the same flow!


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LocalWORKERS

PROBATIONfollowed by

PERMANENTContract

Temporary(FIX TERM)

contract


Job MalaysiaMOHR JTR

CONTRACTOR(Outsource Company)

Directapplication

PrivateEmployment

Agency

Placement

Contract of Service/Contract for Service

Temporary(FIX TERM)

contract

RM$wages

RM$wages

Workers seeking employment

MigrantWORKERS

FACTORYPrinci le Em lo er



Workers seeking employment in Malaysia

TODAY

THE DAY AFTER

TOMORROW


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Types of WORKERS

Employed directly by Employer or Principal :

1. Permanent workers

2. Local contract workers (Fix-term)

3. Foreign contract workers (Fix-term)------------------------------------------------------------------------------------------------------------------------------

Supplied by Labour Contractorsbut work for Principalemployer PAID BY Labour Contractor:

4. Local contract workers (Fix-term)

5. Foreign contract workers (Fix-term)


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Types of CONTRACTS

1. Employment Contract is a CONTRACT OFSERVICE

(Kontrak Perkhidmatan)

2.Service Contract is a

CONTRACT FOR SERVICE

(Kontrak untuk Perkhidmatan)

(not an employment contract)


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Contract OF Service


Any agreement between two parties an employer and

an employee, where by:

The employer agrees to employ another as anemployee; and the employee

agrees to undertake certain duties under the

direction and control of the employer.

agrees, in return for a specified wage or salary and

benefits under a terms & conditions of employment

from employer.


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Terms and Conditions of Employment

The employer cannot change the terms andconditions of employment unless employee agreesto it.

Any terms and conditions, in a contract of service,that is less favourable than the relevant provisionunder the Employment Act (1955) is illegal, null andvoid.

Provision in the Act will take precedence over aparticular contractual term that is less favourable.


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An apprenticeship contract or agreement is also

considered a contract of service

Agreement, whether oralor in writing and

whether express or implied.

Oral contract in writing? How?


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Employment Act in 1955

With the introduction of the EA, the then British Administrationeffectively abolished the indenture labour, bonded labour and the

kanggani system in Malaya, as it was known then.

The totality of the Employment Act 1955 established two veryimportant principles of law.

They are:

Security of tenure ensuring permanence of job and

Proprietary right to the job where termination of worker, shallbe with just cause and excuse & by due process.

These principles are trite law and are considered sacrosanct.

MUST be protected at all cost!


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Permanent Contract (permanent workers)

Direct hire (Company workers)

- local workers

Fixed Term Contract -

(temporary orcontract workers)

Direct hire (Company workers)- Locals & Foreign workers

Types of

Contract OF Service


contract FOR service


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engaged as an independent contractor

(such as a self-employed person or vendor) .

engaged for a fee to carry out an assignment, duty or aproject for the company.

there is no employer- employee relationship, therefore,

NOT covered by the Employment Act

contract FOR service(not an employment contract)



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TERMS & CONDITIONS of work

for CONTRACT workers

Hours of Work: 1 Shift 12Hours Wages: basic RM 400 RM 450

Overtime: fixed amount, does not follow rates fornormal days, rest days & public holidays OR none.

Annual leave, Public holidays pay, Sick leave, Maternityleave - Not mandatory.

No payment for legally mandated breaks.

Pay cut for absent or late for work or on sick leave or onannual leave.

Toilet breaks monitored 2x for 12 hour shift Accommodation & Transport provided FoC.


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Fixed Term Contract -

(temporary orcontract workers)

workers hired by Outsourced Company to work in

the principle company.

- Locals & Foreign workers

Types of

contract FOR service



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There is no single conclusive test to distinguish a contract of employment from a contractfor services. Some of the factors to be considered in identifying a contract ofemployment include:

i) Control

Who decides on the recruitment and dismissal of employees? Who pays for the employees' wages and in what ways?

Who determines the production process, timing and method of production?

Who is responsible for the provision of work?

ii) Ownership of Factors of Production

Who provides the tools and equipment? Who provides the working place and materials?

iii) Economic Considerations

Does he carry on business on his own account or carry on the business for the employer?

Does he involve in any prospect of profit or is he liable to any risk of loss?

How are his earnings calculated and profits derived?


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Essential Clauses of Contract of Service :

Commencement of employment;

Appointment job title and job scope;

Hours of work;

Probation period, if any;

Remuneration;

Employee's benefits (e.g. sick leave, annual leave,

maternity leave);

Termination of contract notice period; and Code of conduct (e.g. punctuality, no fighting at work).


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LAWS ON PROTECTION OF

RIGHTS OF WORKERS

STATUTE Employment Act 1955

Industrial Relations Act 1969

Trade Unions Act 1959

Workmens Compensation Act 1952

Occupational Safety and Health Act 1994 Social Security Act 1969

Immigration Act 1959/63

Contract of Employment

The contract of employment stipulates terms and conditions on duration,wages, work shift, days off, sick leave, medical fees, payment of levy, visa,medical and travel.


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1. Companies advertise job vacancies in front of theirfactory gates.

2. Companys own Human Resource officer interviews

and identify potential candidates.

3. Identified candidates - sent to sign a contract with anoutsource company, usually without receiving a copy.

Is the contract a contract for service orcontract of service?

Modus operandiin getting permit for foreign workers.


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The successful candidate

4. Handed over to company Human

Resource officer.5. Provided with the company badge with a

unique Number to denote contract workers.

6. One week orientation and work

process training.7. Successful candidates sent to the Assembly

line supervisor to start work ascontract

labour.Workers not aware of the type of contract!

N i b l i d


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Not wanting to be exploited..

Locals QUITin PROTEST!(albeit SILENTLY !)

Applying for PERMIT

Due to the high attrition of contract labour.

company applies to the government agencies (MOHR &

KDN) for permit to bring in foreign workers.

The reasons often cited local workers are not keen on menial jobs,

that they are pampered and like to lepak. TREATEN to relocate operation to third country


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Tidak berminat berkerja lebih masa dan syif Terlalu memilih kerja

Minat ganjaran yang tidak setimpal dengan produktiviti

Tidak bersedia belajar kemahiran baru dan kerja pelbagatugas

Sukar menerima sistem kerja baru

Mementingkan masa untuk riadah dan keluarga

Sikap Pekerja Tempatan


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Facts not mentioned are:

that the wages and benefits are intentional madeunattractive,

with unfair and archaic terms and conditions ofservice (Pre-Employment Act era).

The silent protest.

B kd f t f Em l m t t t i Am i S mi d t A mbl

Breakdown of types of Employment contract in an American Semiconductor Assembly


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Plant of semi-skilled workers and Production Operators in Dec 2007

Company

1028 48 %Permanent Contract of Service

for local workers

110 5 %Temporary Contract of Service

for local workers

(3 to 6 months renewable)

810 38 %Temporary Contract of Service

for foreign workers

(2 years renewable)

Employment

Agency210 10 %Local contract workers

TOTAL 2158 100 %


Plant of semi-skilled workers and Production Operators in Dec 2007

Cost Comparison - Local vs Migrant worker/per month (RM)


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Cost Components Local worker Migrant worker

Basic Salary (as at end-2007) 503 503

SRA 47 47

Contractual Bonus (1 mth) 42 42Performance Incentive (1 mth) 42 42

Shift Allowance 76 76

Life Insurance 3 3

Medical coverage 64 64

Transportation 215 193EPF 89 nil

Levy & Visa nil 110

Recruitment Fee nil 30

Medical (Fomema) nil 16

Hostel accommodation nil 230Workman Compensation nil 6

Air fare nil 40

Total (RM) 1,081 1,402

Percentage 100% 130%


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PURPOSE OF COMPANY

to make profit.

Corporate headquarters sets target that

labour cost should not exceed 6% of themanufacturing cost.

Hiring foreign workers will escalate cost of

labour by 30%.


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Local Management to achieve the target

Wages & benefits are controlled :

to subsidise the 30% additional labour cost in

hiring foreign labour.

maintain the 6% labour cost.

without affecting the companys bottom lineprofit.

Leading to current reality


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Bruno Periera 33Race to the Bottomunabated

Leading to current reality..

wages & benefits of the local workers are depressed

artificially.

type of employment contracts have deteriorated

progressively

replace local permanent contract

with foreign contract labour.

substitute with local contract labour

Standard of living deteriorates while cost of livingescalates.

Compan achie es


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Company achieves:

Low wage cost.

Disposable labour - hire & fire.

Flexi-labour Multi-skilling/Multi-tasking.

Plug & play workers. (minimal training)

No union (No negotiation powers)

Subservient workforce.

Convert workers wages into profits.

Huge wages & bonus payout- Top Mgmt

Perlumbaan menuju ke dasar .

High contract labour % improves NAV


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High contract labour % improvesNAV(Net Asset Value) of company.

by transferring labour cost to overhead /operation cost putting Companys stock

price looking good to shareholders.Creative accounting.


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Problem solving technique


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Problem solving technique.

INVESTIGATE (Past):

How did the problem start?

Who started the problem?

When did the problem start?

Why did the problem start?

Where did the problem start?

-------------------------------------------------------------PLAN OF ACTION (Future):

How to overcome the problem?

Who overcome the problem?

When to overcome the problem?

Why should we overcome the problem? Where to begin the change?


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HOW IT ALL STARTED?

It always starts small.

and grows .. and grows

finally accepted as NORMAL

PEKERJA ASING (PA)


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PEKERJA ASING (PA)

LATAR BELAKANG

1992- Kerajaan meluluskan PA daripadaASEAN, Bangladesh, India dan Sri Lanka

untuk sektor pembinaan dan perladangan.

2000 - Diperluaskan kepada sektor perkilangandan perkhidmatan (hotel dan restoran).

2002 - Meliputi semua sector

Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM

OUTSOURCING


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OUTSOURCING(MEMBEKAL & MENGURUS)

2005

Mesyuarat Jawatankuasa Kabinet mengenai

Pekerja Asing (JKK-PA) ke-33 Bil. 2/2005 pada

5 Julai 2005 telah BERSETUJU untuk

menggaji PA melalui konsep

OUTSOURCING.


Outsourcing concept:Outsourcing is a concept where the management and supply services are


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g p g pp yundertaken bycompanies selected by the government. The governmentshall select and supervise these companies who are reliable to beresponsible to recruit, supervise and manageforeign workers and presentthe workers to customers who need them under the outsourcing concept.

Aim:

The implementation of outsourcing aims to assist to overcome the problems ofshortage of workers and small companies who do not have the resources tomanage foreign workers full time will save cost. It will also helpcompanies/management who needs large workforce from time to time

especially to fulfill additional increase in contractual obligations,for peakseasonal collection of harvestand so on.

Management:

The management of foreign workers shall be managed in an orderly andsystematic manner. Accommodation, transportation, payment of wages ofRM400, medical examination including insurance coverage shall be underthe outsourcing company.

Sumber:LaporanPesidangan Meja Bulat Mengenai Penggajian PA Di Msia - 5-Apr 2007 ISMK - KSM

2006 Terdapat jumlah 1 800 000 PA


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2006Terdapat jumlah 1,800,000PA

Negara sumber utama: Indonesia 1,174,000 (63%)

Nepal 214,000 (11%)

India 138,000 ( 7%)

Myanmar 109,000 ( 6%)

Vietnam 106,000 ( 6%)

Bangladesh 63,000 ( 3%)

Lain-lain 64,000 ( 4%)

Pembahagian PA mengikut sektor


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g g

Pembuatan - 646,000 (35%)

Perladangan - 354,000 (19%) Pembantu Rumah - 311,000 (17%)

Pembinaan - 268,000 (14%)

Perkhidmatan - 167,000 ( 9%)

Pertanian - 123,000 ( 7%)

Jumlah PA = 1,800,000 (100%)

IMPAK P k j A i


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IMPAK Pekeja Asing

Dari Segi Ekonomi:

Kesan Positif:

Menyumbang RM 17b (5.1%) kepada KDNK RM 8.3b (5.2%) kepada perbelanjaan persendirian

RM 1.2b levi kepada hasil kerajaan (2004)


Kesan Negatif:


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Kesan Negatif:

Remit RM 5-7b setahun ke negara asal

Kos perkhidmatan kesihatan RM117j Kemunculan semula penyakit tibi, malaria dan

untut serta membawa penyakit baru seperti kala

azar (Leishmaniasis).

Mengurangkan tekanan kepada majikan bagi

memperkenalkan automasi dan mekanisasi

Mengurangkan tekanan ke atas kenaikan gaji


Dari Segi Sosial:


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Kesatuan sekerja terancam

Mengekang kadar upah dan jejas peningkatan

taraf hidup rakyat

Menjejaskan kerukunan sosial



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Demographics (Dept. of Statistics, 2006)


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POPULATION 26.63m

- Women 13.07m

- Men 13.56m

EMPLOYMENT 10.9m

- Private sector 5.2m

- Public sector 1.1m- Informal sector 4.6m

Labour Participation rate:

- Women 46% 4.0m

- Men 86% 6.9m

UNEMPLOYMENT 3.5%


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Percentage of Foreign Workers againstPrivate sector employees:

1.8m/5.2m = 34.6%



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NOW it grows to

take over

employment fromlocals!

New Straits Time - July 20, 2008i t i ith D t k I h k M h d

Malaysian Trades Union CongressLABOUR BULLETIN July 2008


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interview withDatuk Ishak Mohamed,Enforcement Director Immigration Department

Q: Should foreign labour outsourcing be banned?

A: Outsourcing is the best solution for the governmentto manage foreign workers.

Q: Why?A: There are two scenarios

One is that as companies get bigger, they will need more

manpower and with outsourcing they can get workers in amore organized way.Two, outsourcing is good as it will attract foreign directinvestment. Investors will not want unions to be formed intheir establishments.

Through outsourcing, it would be difficult for unions to beformed as outsourcing company, and not the factory, would bethe employer.


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Monday, September 21, 2009, 02.03 PM

Labour director-general Datuk Ismail Abdul Rahimsaid yesterday.

We have introduced a quota system, where for

the manufacturing sector dealing in exports it is twoforeigners to one local and

one local to one foreignerfor all othersectors," he said.

Cabinet Committee on Foreign Workers


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Deputy PM: Tan Sri Muhyiddin Yassin.

The Laboratory*, had been directed to putoutsourcing companies under the microscope toensure that they stick to their role as providers of

workers and NOT as EMPLOYERS.

277 registered outsourcing companies.

Laboratory 8 ministries and 15 agencies.

The Star Tue 23-Feb 2010

and Illegal Workers.

Malaysian Labour Markets


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Labour Market : Regulated by Employment laws.

Employer to submit returns (S62 EA) statistics Do not include outsource / contract workers

Transparent.

Labour Black Market : Not sanctioned by law.

Statistics not available.

Involves outsource / contract workers.

Existing parallel to Labour Market

Undergroundillegal?

Statement by

THE HONOURABLE DATUK DR.S.SUBRAMANIAM


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MINISTER OF HUMAN RESOURCES, MALAYSIA

AT THE 98TH SESSION OF

THE INTERNATIONAL LABOUR CONFERENCE GENEVA.THURSDAY, 11 JUNE 2009.

------------------------------------------------------------------------------

It is imperative that we take this crisis (Global Economic Crisis) as anopportunity to reaffirm our commitment to the principles of DecentWork and through such commitment the dignity and the rights ofworkers, as enshrined in the principles of Decent Work should continueto form the basis of the national agenda for our respectivegovernments.

In Malaysia, we have instituted high ranking tripartite monitoringmechanisms very much early in the crisis to ensure that the economicconsequences of this crisis does not step on the rights of our workersas prescribed in the Constitution and in the laws of the country.

Principles of Decent Work


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Decent work is captured in four strategic objectives:

fundamental principles and rights at work andinternational labour standards;

employment and income opportunities;

social protection and social security; and

social dialogue and tripartism.

Decent work is central to efforts to reduce poverty, and is

a means for achieving equitable, inclusive and sustainabledevelopment.

D k h i i f l i h i

Principles of Decent Work


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Decent work sums up the aspirations of people in theirworking lives. It involves

opportunities for work that is productive and delivers afair income,

security in the workplace and social protection forfamilies,

better prospects for personal development and socialintegration,

freedom for people to express their concerns, organizeand participate in the decisions that affect their lives and

equality of opportunity and treatment for all women andmen.

CONTRACT LABOUR SYSTEM

i AGAINST D k d


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is AGAINST Decent work agenda.

DOES NOT provide opportunities forwork that is productive.

DOES NOT deliver a fair income.

NO security in the workplace and social

protection for families.

NO prospects for personal developmentand social integration.

Employment Act in 1955


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With the introduction of the EA, the then British Administrationeffectively abolished the indenture labour, bonded labour and thekanggani system in Malaya, as it was known then.

The totality of the Employment Act 1955 established two veryimportant principles of law.

They are:

Security of tenure ensuring permanence of job and

Proprietary right to the job where termination of worker, shallbe with just cause and excuse & by due process.

These principles are trite law and are considered sacrosanct. MUST be protected at all cost!


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Bruno Periera

labour situation in m'sia

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