Sunday, February 7, 2016

Reducing worker savings for old age - to allow them to spend now to save Malaysia is Wrong?

EPF:- Workers suffer again BN Government proposes reduction of EPF contribution?

Najib Tun Razak and the BN government is now proposing that the workers contribution to the Employees Provident Fund(EPF) will be reduced by 3%. 

Sounds great - but wait a minute. This would mean that the amount of monthly monies paid into the Worker's EPF Account would reduce...and this is not right as the EPF is the 'Simpanan Hari Tua' (Savings for old age) - this money is to sustain the livelihood of the worker and his family/dependents in their old age when the worker is no longer able to work and earn....until the day he/she dies.

Public servants generally will get pensions right up to the day they die, and thereafter pension will still be paid out to their spouses, and children who have yet to reach the age of majority. These workers, under the EPF scheme, do not have this guaranteed pension payments. It will be the money that they have in their EPF accounts that is expected to support them in the old age.
As it is, it has already been acknowledged, that for most workers in Malaysia, the amount of money that will be in their accounts will now be insufficient to be able to provide for the livelihood of the worker in his old age, In fact, I believe the government is trying to deal with this very real problem with some form of a 'pension scheme' - but it is all work in progress.

So, this BN government is asking poor workers to reduce the save for their old age - and spend that money now. This is so irresponsible.

If Najib is saying that the workers mandatory contribution is reduced by 3%, whilst the employer's contribution is increased - which results in the same amount of monthly contribution to the EPF accounts, then it is OK.

If Najib is saying that the worker's mandatory contribution is reduced by 3%, and the government will bank in the said 3%- which results in the same amount of monthly contribution to the EPF accounts, then it is OK.

But certainly not, this 'save less for your old age' proposal is absurd, and at the end of the day, it is workers under the EPF/KWSP scheme that loses out in the long run.
WHY? So workers will have more money to spend to help the Malaysian economy. This logic was also used in the past by the BN government in the past - when they started allowing workers to take out money from the 'old age savings account'(EPF Account) to spend now for houses, etc...Then also, the rationale, I believe, was to ensure that more money will be spend now by these workers for the sake of the Malaysian economy... 
How much really should a worker be having in his/her EPF account when he/she reaches 55/60/65 to allow him to be able to survive and sustain his/her and dependents livelihood until he/she dies? RM250,000 - RM300,000? Well, we know that for most workers, they will not have even that amount. Factor in the ever increasing cost of living, and also the other monthly loan-repayment obligations. Some workers who purchased homes, will still be repaying loans even after they reach the age they can withdraw from the EPF (old age savings account).
A perusal of the workers, who have already withdrawn from the EPF account, will also show that many of them now do not enough money to sustain their lives until they die.
Hence, Najib's proposal is short-sighted and do not take into account the future lives of workers and their families.
Remember, the EPF scheme affects all private sector workers - and, this BN government, has been shown to be not bothered. While, government employees minimum wages are raised now to RM1,200, the private sector minimum wage will be raised maybe in the middle of the year to just RM1,000. Government employees have COLA[Cost of Living Allowances], private sector workers do not have this. Government employess enjoy access to very low interest loans, but private sector workers do not.
Government employees generally enjoy regular employment until retirement - but in the private sector the government is allowing the unfettered rice of precarious employment practices - short fixed term employment contracts, the unjust contractor for labour systems,...
Now, Saudi Arabia allegedly gave Najib a RM2 billion 'donation' - but he allegedly returned a large amount of it to the donor - that could have been donated by Najib Tun Razak to the government...?
Our target must be that the workers earn MORE and that is sufficient for the livelihood, and for their spending now. They should not be forced, to reduce the contribution to their 'savings for their old age'.
It is the government itself that is to be blamed for the increase of cost of living - so, what needs to be done is to reduce that, so the monies earned by workers now is sufficient...
When a worker takes a loan, he pays high interest to the bank - but if he saves his money in the bank, he receives such low interest. Then, the government allowed banks to impose other charges for withdrawals, for bank statements, etc .. In short, it looks like the Malaysian BN government discourages savings and encourages spending...and for the future of the worker and their family, this smells trouble...
So, Malaysia must increase subsidies for the basic minimal items required by the worker and family for survival. 
Maybe, the government should abolish road tols... reduce water and electricity rate...
Maybe, the recent increase in MP, Senators and ADUNs allowances should be reduced... PM and Ministers pays should be cut. GLC CEOs, Directors and
Sadly, the rich feels it not - but please do consider the majority who are poor... 

Worker earning RM1,000 - with reduction of EPF contribution by 3%, he will take home an extra RM30 a month, RM360 a year. 

RM360 a year - with, say an EPF interest of 6%, he gets  RM21 in interest per year.

So, happily the government said that all this will be spent - RM8billion. Hello, that is the workers' money not being saved but spent... 

REVISED BUDGET 2016: Workers’ EPF contribution cut 3%

EPF contribution by employees will be reduced by 3% under the revised Budget 2016. – The Malaysian Insider file pic, January 28, 2016.EPF contribution by employees will be reduced by 3% under the revised Budget 2016. – The Malaysian Insider file pic, January 28, 2016.


Prime Minister Datuk Seri Najib Razak announced the following measures under Putrajaya's recalibration of Budget 2016:
  • EPF contributions by employees to be reduced by 3% from March this year until December 2017. Contribution rate by employers, however, remains the same.
  • Najib said the reduced contributions would boost spending by an estimated RM8 billion.
  • Tax exemption of RM2,000 for Malaysians earning RM8,000 and below for the financial year of 2015, a move that would affect two million tax payers.
Food and cost of living
  • To reduce the cost of daily food items, approved permits (APs) for agricultural products, including coffee beans and meats, will be liberalised.
  • The Federal Agricultural Marketing Authority (Fama) will open MyFarm outlets to sell produce direct from farmers to consumers at prices between 5 to 20% cheaper.
  • Domestic Trade and Consumer Affairs Ministry to increase the number of affordable shopping outlets like hypermarkets.
  • RM50 incentive for every metric tonne of rice for paddy farmers.
  • MyBeras programme introduced – 20kg of free rice for every registered hardcore poor household.
  • GST to remain at the same rate (6%).
  • Cash aid programme BR1M will be continued: "The government will not compromise on what is right for the country and people," Najib said.
  • For new housing developments, sale of houses priced not more RM300,000 to be limited to first-time house buyers.
  • Bank Simpanan Nasional and Bank Rakyat to offer assistance packages at 4% for homes costing RM35,000 under the People's Housing Projects or PR1MA.

Human resources
  • 30% of levy contributed to the Human Resources Development Fund will be used to improve workers' skills and competency, including for those retrenched.
  • Government to continue fine-tuning foreign worker management system. Foreign workers' levy will be clustered into two categories but will not include domestic helpers.
  • To implement a relocation and rehiring programme for undocumented workers so that they can get valid work permits.
Datuk Seri Najib Razak addresses senior government officials in Putrajaya today to announce changes to Budget 2016. – The Malaysian Insider pic by Afif Abd Halim, January 28, 2016.Datuk Seri Najib Razak addresses senior government officials in Putrajaya today to announce changes to Budget 2016. – The Malaysian Insider pic by Afif Abd Halim, January 28, 2016.Improving revenue collection
  • Government to increase action against tax evaders; late-filing penalties to be reduced.
  • Sale of alcohol and cigarettes on tax-free islands to be limited to licensed, tax-free stores, in order to reduce leakage of up to RM1 billion in revenue.
  • Tighten taxes on exemptions for imported vehicles on tax-free islands.
  • Optimise revenue from telecommunications by redistributing bidding processes.
  • Develop government-owned strategic areas through a bidding process. 
Development spending
  • Priority to be given to affordable housing, hospitals, schools, roads, public transportation and security.
  • Non-physical projects and projects that are still at planning stage will be postponed. This move is expected to save the government RM5 billion.
Civil service and government-linked companies
  • Government to keep its promise of July 1, 2016 additional salary increase for civil servants.
  • Government will not touch civil service emoluments and will not stop the services of contract staff in the public sector.
  • GLCs urged to reduce salary gap between top management and staff. This will be monitored by the Economic Planning Unit.
  • Government to keep its promise of July 1, 2016 additional salary increase for civil servants.
Education and scholarships
  • Government to continue the following four Public Service Department (JPA) scholarships for 2016:
1. The National Scholarship Programme (Program Biasiswa Nasional) will allow 20 top SPM-scorers to pursue their studies in universities abroad;
2. The Engineering Special Programme (Program Khas Kejuruteraan) for 200 students to pursue their studies in Germany, France, Korea and Japan;
3. The Bursary Programme (Program Lepasan Bursary) for 744 students to pursue their undergraduate degrees in public and private higher education institutions in the country; and
4. Scholarships for 8,000 students to pursue undergraduate degrees locally.
  • The National Higher Education Fund Loan (PTPTN) allocation of RM5 billion will remain.
  • Offers to enroll in MyMaster programme to increase by 15,000, MyPhd by 5,000 and IPTA (public universities) Academic Training Scheme by 300. Government to boost allocation by RM300 million.
  • MyBrain1 and the Bumiputera Academic Training Scheme will be continued. – January 28, 2016.
- See more at:

Thursday, 28 January 2016 | MYT 12:11 PM

Najib presents revised 2016 Budget

PETALING JAYA: Prime Minister Datuk Seri Najib Tun Razak (pic) has announced a revised Budget 2016 to optimise the country's developmental and operational expenditures in the face of slower economic growth.
The revised budget will include precautionary and proactive measures in managing national revenue and expenditures, while ensuring that the well-being of the people remained a priority.
Najib said the recalibration is necessary due to a slump in global oil prices and a slower economic growth in the United States and China.
When Budget 2016 was unveiled in Parliament last October, the crude oil price was at US$48 (RM203) per barrel.
However, the current price per barrel stands at US$30 (RM127), a sharp fall since the Budget was presented.
- The 2016 global economy expected to be more challenging and economic groweth expected to fall from 3.6% to 3.4%.
- Malaysia not alone in facing global economic challenges. Current crude oil price stands at US$31 (RM131) per barrel.
- Latest developments indicate that the global economy is at a very volatile stage and requires a proactive move to revise Budget 2016.
- We are not in a recession, neither are we in a technical recession.
- Eleven recalibrated measures announced.
- 1. EPF contributions by employees to be reduced by 3%. This is expected to increase private sector spending by RM8bil.
- 2. Tax relief of up to RM2,000 to those with income RM8,000 a month or lower. Two million taxpayers to benefit.
- 3. To reduce cost of living, Govt to liberalise APs for agricultural products including coffee beans and meats.
- 4. Domestic Trade, Cooperatives and Consumerism Ministry ordered to increase enforcement and action against unethical traders.
- 5. 30% of contributions to the human resource development fund to be utilised for skills training, including those who are unemployed.
- 6. MyBeras programme to be introduced until Dec 2016. Each hardcore poor family will be given 20kg of rice every month.
- 7. The Government will update the management system of foreign workers, with levies clustered into two categories, not including foreign maids.
- 8. Government will exercise prudent spending on supplies and services and to continue with grant rationalisation.
- 9. Development budget to focus on projects and programmes that place the people first, have high multiplier effect and reduce imports.
- 10. Development financial institutions and Government venture capital funds to increase allocations by RM6bil for benefit of start-ups and SMEs.
- 11. GLCs urged to implement initiatives to reduce the income gap between senior management and workers, to be monitored by the Economic Planning Unit.
Najib said Thursday's recalibrated budget was based on the approach of "shared responsibility" by certain segments of society.
He said lower-income groups will not be affected, and continue to benefit from measures such as the 1Malaysia People's Aid (BR1M).
"The present rate of the Goods and Services Tax (GST) will also be retained at 6%. The Government has no plans to increase this," said Najib at the Putrajaya International Convention Centre (PICC).
He also said that Malaysia would not resort to imposing capital controls and pegging the Ringgit, such as was done during the 1997-1998 financial crisis.
"The Government remains committed to maintaining the fiscal consolidation measures for 2016, which is to achieve a GDP target of 3.1%.
"Our country's debt will be reduced and will not exceed 55% of the GDP. The Government also has no plans to impose capital controls and peg the Ringgit," he said.
Najib also made mention of the Trans-Pacific Partnership Agreement (TPPA), which had been debated at a special Parliamentary sitting on Tuesday and Wednesday.
He provided assurances that with the signing of the free trade agreement, there would be no compromise on the country's sovereignty.
"The Bumiputera agenda remains intact. In fact, it is no longer a national agenda. With the TPPA, it has reached a global scale," he added. - Star, 28/1/2016

Immoral to take RM2.5 billion from 2.1 million migrant workers - LEVY more than doubled?

Higher levy for migrant workers - to pay more than RM200 per month? - UNJUST

Forced Labour? Bonded Labour? - well, when Malaysia raised the levy payable by migrant workers to RM2,500 on 1/2/2016, the amount payable monthly will be more that RM200, and with many migrant workers earning RM900 per month(Minimum Wages), will now be earning less than RM700-00, and that is so unjust. 

Hence, to survive, these migrant workers will be forced to work overtime. Malaysian laws, as it is, provide for a very unjust legal overtime limit of 104 hours - meaning for every working day, workers can be made to work an overtime of 4 hours - meaning they could be working 12 hours every working day. - See earlier post - OT - workers in Malaysia have a choice to refuse? Reduce draconian OT limit of 104 hours/month to 50 hr/mth Interestingly, the Malaysian government is said to be thinking of increasing OT limits even further.

LEVY should be paid by employers choosing to employ migrant workers rather than local workers - it acts as a DETERRENT to employers. That was the object when migrant workers levy was introduced. Labour Director-General Datuk Ismail Abdul Rahim was quated saying that, “…The rationale behind getting employers to bear the levy was to discourage them from employing foreigners…” [Star, 16/4/2009]

But alas, some employers were recuperating the monies spent for levy and other expenses, by getting permission of the Director General of Human Resources to give workers higher than permitted wage advancements OR  higher wage deductions, and then recovering vide these advancements and/or deductions the monies employer spend on migrant workers including sometimes the levy. Finally, 0n April 2009, the Malaysian stopped this practice - making it very clear once again that levy was to be paid by the employer not the workers.

Then with the coming of Minimum Wages, and responding to employers of migrant workers that their cost had increased, on or about January 2013, the government changed their position saying that now migrant workers will have to pay the levy amount ( see earlier post -KSIEWTSM makes it 74 saying No to Wage Deduction to recover Levy Payable By Employers

Annual levy payable for a Migrant Worker before was - Manufacturing sector (RM1,250), Construction sector (RM 1,250), Plantation sector (RM590), Agricultural sector (RM410) and Services sector (RM1,250 – RM1,850)(rates as checked on November 2014). Now, as of 1/2/2016, levy payable is RM2,500(manufacturing, construction and service sectors) and RM1,500(plantation and agriculture)

Now there are only two categories. The first is for those in the manufacturing, construction and service sector. Here each worker will be charged the new rate of RM2,500. "For those in the plantation and agriculture, which come under the second category, the rate is RM1,500, per workers." Zahid said domestic workers were exempted.

In brief, levy payable has doubled for construction, manufacturing and service. For plantation and agriculture, it seems to have gone up higher.

Most unjust for foreign workers already here and working now. They came on the basis of the representation as to their financial obligations (levy, work permit, medical insurance, etc) then when they decided to come to Malaysia to work, and many came to Malaysia for work for 3-5 years. To suddenly be imposed with a new obligation of having to pay themselves the Levy in 2013, and now to have to pay even more is most unjust. 

Unlike, local workers, these migrant workers have incurred many other expenses even before they came which resulted in the taking out of loans, etc (estimated about RM5,000 or more), and are now to be burdened even more financial obligations is grossly unjust. 

They are bound by contracts, and early return to their home country is problematic and not an option to many - if they elect to do so, they may lose out on entitlements like travel home cost, etc. 

For many, they have no choice, and are stuck - forced to work under ever increasing unjust conditions...(see also post, which states levy rates applicable in 2014, and I believe, there was no change until now) - Unjust to compel Migrant Workers in Malaysia to pay higher rates for healthcare in government hospitals?

Note also that the declining value of the Malaysian Ringgit, seriously impacted them - see earlier post -Dropping Ringgit - Migrant workers worst affected now, but soon all in Malaysia may experience the same?

Hence, in the name of justice, if there are to be new financial obligations, it rightfully should ONLY apply to new migrant workers coming in to Malaysia after this. Then, they will be coming to Malaysia, fully informed on all their obligations, financial and otherwise.

As it is the growing number of undocumented workers, may be because of all these restrictions and financial obligations imposed on the documented migrant worker. As it is contract substitution has always been a problem - what was promised and agreed to before they decided to come to Malaysia to work, and what happened in Malaysia when they started working was different, not just in terms of wages. 

It would be good for the Malaysian government to transparently tell us, how many of the undocumented migrant workers in Malaysia came in initially as documented migrant workers? It would also be good to know why other migrant workers chose to come to Malaysia to work as undocumented workers - rather than coming in through the proper channels as documented workers? 

Now, the reason why they come to Malaysia to work is clearly because there is work here - and there are so many Malaysian employers who are willing to risk employing migrant workers.

While Malaysia's Federal Constitution guarantees equality to all PERSONs (not just citizens) in Malaysia, and even its Employment Act has a specific provision making it illegal to treat migrant workers and local workers differently (see section 60L Employment Act 1955), the guarantee for equality. And, worse still the violator is not the Employer, but rather the Malaysian government.

For migrant workers, access to justice is certainly a problem - to complain normally results in speedy termination and the cancellation of work permits. While most government departments, tribunals and labour courts require the presence of the complainant for the complaints procedure to proceed, migrant workers who lose their right to remain in Malaysia on cancellation of their permits, are forced to leave the country - and justice is not done. Violators of the law easily escape. This is happening not just in labour cases but also criminal cases.

Now, the financial problems facing Malaysia now, should be blamed on the Barisan Nasional government under the Premiership of Najib Tun Razak. A good government, would have foreseen problems, and had in place measures to overcome it. But sadly, this government's solution is transfer the burden to Malaysians, workers and now migrant workers. Subsidies were removed, a new Goods and Services Tax was introduced shifting the burden of collecting these taxes from point of production to the the retailer and the consumer, toll rates have been increased, workers being asked to 'save less for the future' and spend money now policy, increasing levy payment obligations of migrant workers, Interestingly, no proposal to reduce peoples' representatives (Members of Parliament, Senators, ADUNs) wages/allowances that was just increased a lot, or reduce the number of Ministers in a very large Cabinet, ...



RM2.5 billion expected from new foreign workers’ levy rate system, says Zahid

Datuk Seri Ahmad Zahid Hamidi says a new levy system for foreign workers will be bringing in RM2.5 billion to the country. – The Malaysian Insider file pic, January 31, 2016.Datuk Seri Ahmad Zahid Hamidi says a new levy system for foreign workers will be bringing in RM2.5 billion to the country. – The Malaysian Insider file pic, January 31, 2016.Datuk Seri Ahmad Zahid Hamidi said the government's decision to restructure the levy rate system for foreign workers into two categories was expected to bring an extra income of RM2.5 billion to the country.
The deputy prime minister said today the new rate would come into effect beginning tomorrow, February 1.
Previously, he said the foreign workers were charged different rates were based on the sectors where they worked such as manufacturing, construction, service, plantation and agriculture.

"Now there are only two categories. The first is for those in the manufacturing, construction and service sector. Here each worker will be charged the new rate of RM2,500. "For those in the plantation and agriculture, which come under the second category, the rate is RM1,500, per workers."
Zahid said domestic workers were exempted.
According to statistics, he said there were now some 2.135 million registered foreign workers in the country.
"Our Prime Minister Datuk Seri Najib Razak had in his 2016 national recalibrated budget speech touched on this restructuring.
"This is in accordance with the development in the country's economic scenario and that at international level."
He said the government needed to come up with the new rates as the foreign workers were also enjoying various benefits such as subsidised prices for food and other necessities, which were only meant for the country's citizens.
"They are enjoying our good infrastructures too but we are also acknowledging the vital roles they play in our nation-building and to our economy." – Bernama, January 31, 2016.
- See more at:

Wednesday, November 18, 2015

Government-Owned MAB, the new Malaysian Airlines Operator, Must Recognize Unions and Not Deny Freedom of Association (62 Groups)

Joint Statement – 19/11/2015

Government-Owned MAB, the new Malaysian Airlines Operator, Must Recognize Unions and Not Deny Freedom of Association.

We, the 62 undersigned trade unions, civil society organisations and groups are shocked that Malaysian government owned Malaysian Airline Berhad (MAB), the company that took over Malaysian Airlines, chose to ignore the application for recognition by the National Union of Flight Attendants Malaysia(NUFAM). 

In Malaysia, before a Union can proceed to negotiate and enter into a Collective Bargaining Agreement(CBA), the employer needs to recognize the said Trade Union.  MAB’s failure to immediately recognize NUFAM reflects badly on Malaysia who has the duty to respect worker rights especially the freedom of Association, which is also a right enshrined in the Malaysian Federal Constitution.

In accordance to the existing law, NUFAM applied to MAB for recognition vide a letter dated 11/9/2015.

Section 9(3) Industrial Relations Act 1967 states that, ‘…An employer or a trade union of employers upon whom a claim for recognition has been served shall, within twenty-one days after the service of the claim- (a) accord recognition; or (b) if recognition is not accorded, notify the trade union of workmen concerned in writing the grounds for not according recognition…’

MAB did not even have courtesy of replying to NUFAM within the stipulated 21 days, which can be considered conduct unbecoming especially of a Malaysian government owned company. 

As required by law, vide letter delivered on 6/10/2015, NUFAM then reported the matter in writing to the Director General for Industrial Relations to take such steps or make such enquiries to ascertain the ‘… the competence of the trade union of workmen concerned to represent any workmen or class of workmen…’ in MAB, and to determine ‘…by way of secret ballot, the percentage of the workmen or class of workmen, in respect of whom recognition is being sought, who are members of the trade union of workmen making the claim. The result of the secret ballot must demonstrate that more than 50% of the qualified employees are for the Union, whereby those that never had the opportunity to vote are taken as being against the Union.

More than 40 days has lapsed, and the DG for Industrial Relations has not yet responded to NUFAM. Given that many employees are hired as fixed-term contract employees, speedy efficient action is required by the authorities. Delay prejudices workers.

Even when Unions in Malaysia are successful in demonstrating that they have the support of more than 50% of all qualified employees in a secret ballot, and the Minister decides that recognition is to be accorded by the employer, some employers are challenging this decision in court and as a result rights that come with recognition is put on hold for many years to the detriment of workers and their union. 

When the Malaysian Airlines was previously operated by Malaysian Airlines Systems Berhad(MAS Bhd), NUFAM succeeded at  the secret ballot and the Minister decided that NUFAM is recognized by MAS Bhd. Unfortunately, MAS Bhd commenced a Judicial Review action in court challenging the Minister’s decision, and this case is still pending.

Union Busting – Creating a New Legal Entity

Private sector companies have been known to in the past form a new separate legal entity, and then transfer assets and business from the existing company to this new entity, thereby killing existing unions – forcing workers to start all over again to form, register and get recognition of unions in the new entity. This strategy is also used to get rid of worker leaders and workers brave enough to fight exploitation.

It is disappointing that the Malaysian government is using a similar ‘union busting’ strategy for government owned and/or government-linked companies (GLCs). 

Malaysian Airlines Systems Berhad(MAS Bhd) was the company running the Malaysian Airlines with about 20,000 employees. What was done was that MAS Bhd apparently transferred their assets and the airline business to a newly created separate legal entity, Malaysian Airlines Berhad(MAB), and terminated  about 20,000 MAS Bhd Employees. 
MAB, the new company that took over the Malaysian Airlines, employed new employees, amongst them some 14,000 ex-MAS Bhd employees. All the in-house trade unions that existed in MAS Bhd were effectively killed.

Now, MAB is free of trade unions. 

NUFAM may be the first union that is seeking recognition from MAB – whereby recognition is needed to better represent their worker members in MAB and to enter into a Collective Bargaining Agreement.

Moratorium on all court action involving MAS Bhd
To make matters worse, Malaysia passed a new law – Malaysian Airline System Berhad (Administration) Act 2015, which amongst others, effectively prevented speedy access to justice through the courts. A moratorium was put in place preventing court actions involving MAS Bhd from proceedings. When the moratorium is finally lifted, it would likely be too late. Justice delayed is justice denied.

Malaysian Government Owns The Old And New Company

Malaysian government, vide its strategic investment fund Khazanah Nasional, owns both MAS Bhd and this new MAB. Hence, it is the current Barisan Nasional government under Prime Minister Najib Tun Razak that is now possibly guilty of union busting. The denial of speedy recognition of NUFAM and possibly other unions by the new Malaysian Airline Berhad(MAB) can be said to be anti-worker and anti-trade union conduct.

Malaysian Trade Union Laws are oppressive and anti-worker.

-          The Immediate recognition by Malaysian Airline Berhad(MAB), a Malaysian owned company, of National Union of Flight Attendants Malaysia(NUFAM);

-          The Malaysian government to ensure that all government owned and/or government-linked companies(GLCs) set the highest standards when it comes to respecting worker and trade union rights in Malaysia;

-          That Malaysia immediately ratifies ILO Convention No. 87 Freedom of Association and Protection of the Right to Organise Convention, 1948, which is one of 8 fundamental core conventions;

-          That Malaysia immediately amend and/or repeal trade union laws that are not compliant with international standards especially freedom of association. 

Charles Hector
Mohd Roszeli bin Majid
Pranom Somwong

For and on behalf the 62 organisations, trade unions and groups listed below

Asia Monitor Resource Centre (AMRC)
Association of Maybank Executives
BPSLU (Batangas Pier Stevedores and Dockworkers Labor Union), Philippines
Center for Trade Union and Human Rights (CTUHR), Philippines
Centro De Reflexión Y Acción Laboral (CEREAL), México
Clean Clothes Campaign(CCC)
Committee for Asian Women (CAW)
CBBRC (Crispin B. Beltran Resource Center), Philippines
Daeduck Employees Union- Ind. , Philippines

Eagle Ridge Employees Union, Philippines
Electronic Industry Employees Union (EIEU) Southern Region, Peninsular Malaysia
GoodElectronics Network
Hyesung Workers Union-Ind., Philippines
IDEAL Institute for Development of Alternative Living
Institut Rakyat
Inverclyde Advice and Employment Rights Centre, Scotland
Jaringan Kampung Orang Asli Semenanjung Malaysia /JKOASM
Jaringan Orang Asal SeMalaysia
Jawatankuasa Bertindak Kuala Lumpur Tak Nak Insinerator

Kalikasan People's Network for the Environment, Philippines
Kesatuan Eksekutif AIROD
Kesatuan Eksekutif Canon Opto
Kesatuan Pekerja-Pekerja Mitsui Copper Foil(MCFEU)
Knowledge and Rights with Young people through Safer Spaces(KRYSS)
LINTAS NUSA - Batam Indonesia
MADPET (Malaysians Against Death Penalty and Torture)
Malaysian Youth and Students' Democratic Movement (DEMA)\
Malaysia Physicians for Social Responsibility
MAP Foundation for the Health and Knowledge of Ethnic Labour, Thailand

Migrant CARE
Myanmar Migrants Rights Centre
Nagkakaisang Manggagawa ng Keyrin Electronics-Ind. , Philippines
NAMM(Network of Action for Migrants in Malaysia)
National Union Employees in Companies Manufacturing Rubber Products (NUECMRP)
National Union of Flight Attendants Malaysia(NUFAM)
National Union of Journalist (NUJ) Cawangan Utusan Melayu
National Union of Transport Equipment & Allied Industries Workers (NUTEAIW)
North South Initiative
Paper Products Manufacturing Employees’ Union of Malaysia (PPMEU)

Parti Rakyat Malaysia(PRM)
Pax Romana ICMICA
People & Planet
Perak Women for Women Society
PERMAS (Persatuan Masyarakat Selangor & Wilayah Persekutuan)
Persatuan Kesedaran Komuniti Selangor (EMPOWER)
Persatuan Komuniti Prihatin Selangor dan Kuala Lumpur
Persatuan Sahabat Wanita Selangor (PSWS)
Projek Dialog, Malaysia
Sahabat Rakyat 人民之友

Samahan ng mga Manggagawa sa Eagle Ridge Golf Course and Residential Estate, Philippines
SAVE Rivers
SAWO (Sabah Women's Action Resource Group)
Selangor and KL Hokkien Association Youth Section
Solidarity of Cavite Workers, Philippines
Tenaga Nasional Junior Officers Union (TNBJOU)
The Alternative ASEAN Network on Burma(Altsean-Burma)
Workers Assistance Center, Inc (WAC) , Philippines
WH4C (Workers Hub For Change)

Yayasan Chow Kit
Yayasan LINTAS NUSA - Batam Indonesia

Tuesday, August 4, 2015

64 Groups: Repeal MAS Law That Suspends Or Deny Existing Worker And Trade Union Rights And Access To Justice

Media Statement-    4 August 2015

Repeal MAS Law That Suspends Or Deny Existing Worker And Trade Union Rights And Access To Justice – Laws that deny worker rights to assist businesses should never be enacted

We, the undersigned 64 civil society organizations, trade unions and concerned groups, are disturbed by the Malaysian government’s unjust use of an Act of Parliament to suspend and/or deny existing worker rights in law, including also access to justice mechanisms, for the benefit of a private business and employer, being the Malaysian Airlines System Berhad(MAS Bhd), now wholly owned private company by Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, a company.

Malaysia tabled and passed speedily the Malaysian Airline System Berhad (Administration) Act 2015 [Act 765], which came into force on 20/2/2015. This Act is most unjust to workers and trade unions of employees of the airline.

The Act, in section 11, states that “…on the appointment of the Administrator, a moratorium shall take effect during which… (e) no proceedings and no execution or other legal process in any court or tribunal may be commenced or continued with, and no distress may be levied, against the Administered Companies or their property except with the prior written consent of the Administrator;” – whereby the Administered company includes MAS Bhd, its wholly owned subsidiaries and some partially owned subsidiaries. The Administrator was appointed on or about 25/5/2015, and the period of administration could last for a maximum period of 2 years commencing from the date of the appointment of the Administrator. 

What is disturbing is that when administration and moratorium ends, all monies, assets and business of MAS Bhd would most likely be transferred to a new legal entity Malaysian Airline Berhad(MAB). MAS Bhd would most likely be left an empty shell.

Worker Claiming Rights Cases Against MAS Bhd – Stopped and May Not Proceed 

There are currently many cases initiated and filed, now pending before access to justice mechanisms, including tribunals and courts between workers and MAS Bhd, the employer,   claiming wrongful dismissal and/or other worker rights, or between trade unions and MAS Bhd. The effect of the moratorium is that all these actions and cases will stop, and not proceed further until administration of MAS Bhd ends.  

At the end, when moratorium is lifted, MAS Bhd would most likely be an empty shell – with no work and no money. Hence, it will be workers and trade unions that will suffer. Workers and Trade Unions do not just lose their right to justice, but also will have to shoulder additional loses, including all the monies utilized for lawyer and court fees,  time and others. For many workers, it may also mean loss of wages for the days they could not work because they had to attend at relevant departments, tribunal or court in their pursuit for justice. Hence, not only will workers and trade unions be denied justice, but will suffer even more injustice by reason of this anti-worker legislation.

Right To Join Parties To Satisfy Worker Claims Against MAS Bhd Denied

Normally, when the employer has lost the ability to provide remedies, damages or compensation to satisfy the claims of the worker, to ensure justice, the worker can proceed with an application to join third parties to the suit, possibly the owners (Khazanah Nasional) or others. 

This MAS Act now unjustly prevents this ability to join parties, in amongst others, in section 25(2), which states that “ The Malaysia Airlines Berhad, the appointer and the Administrator shall not be named as a party in any claim or application made or joined as a party in any proceeding commenced or continued by or on behalf of any employees or former employees of the Administered Companies pursuant to the Industrial Relations Act 1967 [Act 177], Employment Act 1955 [Act 265], Sabah Labour Ordinance 1950 [Sabah Cap. 67], Sarawak Labour Ordinance 1952 [Sarawak Cap. 76] or the Trade Unions Act 1959 [Act 262].’

In fact, section 25(1) says clearly, amongst others, that ‘…the Administered Companies, the Administrator, appointer or the Malaysia Airlines Berhad shall not(a) be regarded as the successor, assignee or transferee or a successor employer to the Administered Companies; (b) be liable for any obligation relating to any retirement plan or other post-employment benefit plans in respect of the employees or former employees of the Administered Companies or any predecessor of the Administered Companies that exists prior to the assumption of control or appointment; or (c) be liable for any sum which is calculated by reference to a period of time prior to the Malaysia Airlines Berhad becoming the employer of the person in question…’

Same Owner of both MAS Bhd and new Malaysian Airline Berhad(MAB)

Considering that the it is Khazanah Nasional that is the sole owner of MAS Bhd, and also the new company MAB, clearly all that is happening is really nothing other than the ‘same person changing shirts’ – and justice would demand that the new entity MAB or the owner, Khazanah, should be justly taking over the obligation and responsibility of MAS Bhd especially for cases involving worker and trade union rights

The new MAB and MAS Bhd, both owned by Khazanah, really is nothing other that the same owner forming a new company to escape responsibility and liability to workers, is also supported by the following:-

a.      Christoph Mueller, the new chief executive of MAS Bhd was appointed on 1/5/2015, would later assume the same position with MAB. Same CEO for MAS Bhd, and new MAB?

b.      When the employees of MAS Bhd received their termination letters in early June 2015, those that were offered employment by the new MAB, were offered a different termination package from those not offered employment in MAB. Those offered employment in MAB, which was to take effect from 1/9/2015, were asked to continue coming in to work in MAS Bhd, while the others, about 6,000, were asked to stop coming in to work with the assurance they will continue to receive normal salary but could not commence employment with another employer before 31/8/2015 unless they first get approval of MAS Bhd’s Human Resource Department. For many airline employees, other than basic wages, income from allowances and such if they are working makes up sometimes 50% or more of their monthly take home income. Rightly, all employees of MAS Bhd, irrespective of whether they will be later employed in MAB, should have received the same benefits and ex-gratia on termination by MAS Bhd.

In the name of justice, MAB or Khazanah or the Malaysian government should really take over the obligation of any or all claims of employees and trade unions against MAS Bhd.

Avoiding Just Principles of Lay-Off and Termination

When an employer wants to reduce staff, they would justly retrench the number of workers they no longer need – and there are just  requirements that need to be complied in any retrenchment exercise like the ‘Last In First Out’(LIFO) principle. Here, this is avoided by MAS Bhd simply terminating all employees on 31/8/2015. Justly, the about 6,000 who were no longer required to come into work since June, should have been laid off then and there and paid all their entitlements.

Union Busting?

With the termination of all employees of Malaysia Airlines Systems Bhd (MAS Bhd), it would also mean the demise of about 7 in-house trade unions

The only national trade union, the National Union of Flight Attendants Malaysia, managed to  show support of 62.73% of the qualified employees, and obtain the Minister’s order that made it  a recognized union in MAS Bhd. Rather than accept this, MAS Bhd  went  for judicial review challenging the Minister’s decision. NUFAM alleges that only 2 out 10 executive committee members of the Union, who are employees in MAS Bhd have been offered employment in the new MAB. 

As such, this ‘restructuring exercise of the airline’ and this new law can also be considered a means of union busting.

Loss of Regular Employment Until Retirement

Many workers who are regular employees until retirement in MAS Bhd, who have been offered employment in the new MAB find that they will now become precarious employees on short-term contracts, some even on 3 or 6 months employment contracts. There is no law in Malaysia that stipulates that short-term contract employees will continue as employees if the work they were hired to do still exist. Short-term and other precarious forms of employment also would likely deter union formation or involvement, deter workers from claiming rights and facilitate easier exploitation of workers.

Ignoring Worker and Families Financial Security and Wellbeing

Workers in Malaysia have families and dependents, and also many now have monthly loan-repayment obligations, and justly they should be provided secure regular employment until retirement, whereby they still could be terminated for misconducts, or laid off where the employers has to reduce jobs.

Whilst Malaysia says that it is concerned about the airline business, it has demonstrated a serious lack of concern for the welfare and wellbeing of workers.

We therefore urge:-

That the said Malaysian Airline System Berhad(Administration) Act 2015 be repealed, and the effect this Act has had on workers and trade unions be reversed. No law should be enacted to suspend/deny worker rights for selected employers;

That all pending cases with regard to labour matters, be it with workers or unions, shall be justly resolved or settled forthwith by MAS Bhd, and its owners Khazanah Nasional;

That for all worker and trade union cases against MAS Bhd,  MAB and Khazanah Nasional shall agree to be joined in as parties and assume obligations of MAS Bhd to workers;

That if the Malaysian Airlines is desirous of reducing the number of employees, it be done by letting go employees in compliance with the Last In First Out(LIFO) principle and other established just legal principles;

That if the Malaysian Airlines is to be taken over by another entity, like the Malaysian Airlines Berhad(MAB), workers should be employed by MAB as secure regular employees and not by means of precarious forms of employment like short-term contracts;

That Malaysia considers the rights, welfare and wellbeing of workers and their families are just as important, if not more, than the wellbeing and profits of government-owned or linked businesses.  

Charles Hector
Syed Shahir bin Syed Mohamud
Mohd Roszeli bin Majid
Pranom Somwong

For and on behalf the 64 organisations, trade unions and groups listed below

Airlines Workers' Union Sarawak
Alternative ASEAN Network on Burma (Altsean-Burma)
Asia Monitor Resource Centre(AMRC), Hong Kong
Centro de Reflexión y Acción Laboral, CEREAL (Labour Studies and Action Centre), México
Center for Orang  Asli Concerns (COAC), Malaysia
Clean Clothes Campaign
Club Employees Union Peninsular Malaysia
Committee for Asian Women
CWI Malaysia (Committee For Workers’ International, Malaysia)

Daeduck Employees Union-Ind., CEPZ, Rosario, Cavite, Philippines
Eagle Ridge Golf Course and Residential Estate Employees Union, Cavite, Philippines
Electronic Industry Employees Union (EIEU) Southern Region, Peninsular Malaysia
Electronic Industry Employees Union(EIEU) Northern Region, Peninsular Malaysia
Garment and Allied Workers Union, Haryana, India
Globalization Monitor
Hye Sung Workers Union, CEPZ, Rosario, Cavite, Philippines
Institut PEREMPUAN (Indonesia)
Jaringan Kampung Orang Asli Semenanjung Malaysia(JKOASM)
Kesatuan Pekerja-Pekerja Perodua

Kesatuan Pekerja-Pekerja Mitsui Copper Foil(MCFEU)
Kesatuan Pekerja-Pekerja MHS Aviation Berhad(MHSEU)
Kesatuan Eksekutif AIROD
Kesatuan Pekerja-pekerja Perodua Engine Manufacturing Sdn. Bhd
Kesatuan Pekerja-Pekerja Perusahaan Otomobil Nasional Sdn Bhd (KPP Proton)
Knights For Peace, International
MADPET (Malaysians Against Death Penalty and Torture)
Network of Action for Migrants in Malaysia(NAMM)
Nagkakaisang Manggagawa ng Keyrin(trade union), CEPZ, Rosario, Cavite, Philippines
North South Initiative

Malaysian Humanist and Rationalist Movement ("myHARAM")
Malaysian Trade Union Congress(MTUC)
Metal Industry Employees' Union(MIEU), Malaysia
MAP Foundation, Chiangmai, Thailand
Masyarakat Akar Rumput (MAKAR Indonesia)
Migrante International
Myanmar Ethnic Rohingya Human Rights Organization Malaysia (MERHROM)
National Union of Transport Equipment & Allied Industries Workers (NUTEAIW)
National Union of Flight Attendants Malaysia (NUFAM)
National Union of Hotel, Bar and Restaurant Workers (NUHBRW)

National Union of Journalist (NUJ) Cawangan Utusan Melayu
National Union of Tobacco Industry Workers(NUTIW)
National Union Employees in Companies Manufacturing Rubber Products(NUECMRP)
Non-Metallic Mineral Products Manufacturing Employees Union (NMMPMEU)
NUBE (National Union of Banking Employees)
Paper Products Manufacturing Employees’ Union of Malaysia (PPMEU)
Parti Rakyat Malaysia (PRM)
Peoples Service Organization (PSO)
Perak Women for Women Society (PWW)
PERMAS (Persatuan Masyarakat Selangor & Wilayah Persekutuan)

Persatuan Sahabat Wanita Selangor
Persatuan Kesedaran Komuniti Selangor
Persatuan Komuniti Prihatin Selangor dan Kuala Lumpur
PINAY (Filipino Women's Organization in Quebec), Canada
Railwaymen's Union of Malaysia (RUM)
Sahabat Rakyat (人民之友)
School of Acting Justly, Loving Tenderly and Treading humbly (SALT)
Solidarity of Cavite Workers, Cavite, Philippines
Tenaga National  Berhad Junior Officers Union (TNBJOU)

Workers Assistance Center, Inc (WAC),
WH4C (Workers Hub For Change)
Yayasan LINTAS NUSA Batam – Indonesia