Malaysian Bar says NO to 'contractor for labour' and advocates just employment relationship

Malaysian Bar at their 66th Annual General Meeting on 10/3/2012 adopted unanimously a Resolution for a just employment relationship. worker and trade union rights in Malaysia. They oppose the 'contractor for labour' or the presence of any third party in an employment relationship that should be between employer (being the principal or owner of the workplace...) and the workers who work there...

Resolution on maintaining a just employment relationship, worker and trade union rights in Malaysia

Motion proposed by Charles Hector and seconded by Francis Pereira, dated 1 Mar 2012

(As amended)

Whereas:

(1) There has been a withering away of the rights of workers and/or their unions in Malaysia over the past years, and the most recent of this is the employment relationship, where Malaysia is in the process of amending (or has amended) the Employment Act 1955 vide the Employment (Amendment) Bill 2011, the result of which would be the legalisation of the “contractor for labour”, a third party, in an employment relationship which justly should be a two-party direct relationship between owner/operators of workplaces and their workers, who reasonably must be their direct employees.

(2) What the Malaysian government has done, earlier through policy and practice and now being legalised through the amendment of the Employment Act 1955, which was passed at the Dewan Rakyat on 6/10/2011 and the Senate on 22/12/2011, goes contrary also to international standards and principles concerning Decent Work and worker rights.  Avoiding employment relationship was being done by various means, agreements and contracts, which have been criticised even by the International Labour Organisation (“ILO”). Sadly, Malaysia goes even further by legalising evasion of employment relationships.

(3) Employment relationship in Malaysia, as also evident in our Employment Act, prior to this new amendment, was a two-party relationship between employer and worker (employee) between whom there will be a contract of service, whereby “the person or class of persons employed, engaged or contracted with to carry out the work shall be deemed to be an employee or employees and (a) the principal or owner of the agricultural or industrial undertaking, constructional work, trade, business or place of work; or (b) the statutory body or local government authority, shall be deemed to be the employer”.  Sadly, the Minister had the power to create exceptions to this general principle.

(4) The current amendments to the Employment Act 1955 now statutorily recognises a new third party in the employment relationship, being the “contractor for labour”, who unlike Private Employment Agencies, continue to remain the employer of workers that they supply to the principal or owner of the workplace, and as such the said principal or owner of the workplace effectively can avoid becoming employer of the workers working for them, and hence all employer obligations.

(5) This practice of using workers of third parties, without the entry of an employment relationship and/or contract of service, even though there was no provision in law that specifically allowed this, started on or about 2005 with essentially migrant workers through what was known as “outsourcing agents”, but as of 2010, it was no more just migrant workers but also local workers including those from Sabah and Sarawak.

(6) This new reality causes discrimination amongst workers, with regard to wages and other benefits, including also the right to join existing unions and/or to benefit from Collective Agreements, being agreements between worker-employees and their employers – the principal or owners of the workplace.

(7) In some workplaces, the workers who still are employees of the principal or owners of the workplace is about 50% or less, the rest workers there being  workers supplied to work by third parties, at a workplace. This results in an effective weakening of trade unions and their bargaining powers when it comes to collective agreements, including their struggle for better wages and work conditions.  The law does not provide any restrictions as to the number of non-employees at a workplace, and as such this may lead to a situation where even all workers in workplaces may one day be no more employees of the owner or principal of the workplace.

(8) Given the reality, that the workplace and all workers therein is still under the effective control and supervision of the principal or owners of the workplace, matters related to work and work condition, so many workers at the workplace, now treated as not employees of the principal or owner of the workplace, is deprived the right that any worker must have to be able to fight for better working conditions and work-related rights.  The third party suppliers really have no effective control or ability when it comes to improving working conditions and matters at the workplace.

(9) The reality today is also that these principals or owners of workplaces are getting workers from not one, but many different suppliers of workers (“contractors for labour”), which again would result in further discrimination. 

(10) The reality also is that suppliers of workers (“contractors for labour”) are supplying workers to many different workplaces, in many different sectors, and as such even if the workers (now considered) employees of these suppliers were to try to form a union, it is near impossible given this reality.  They also cannot join existing regional or national trade unions in Malaysia, given the fact that in Malaysia, unions are registered based on sectors, and it will be difficult for these worker/employees of the third party to form or join existing unions, given also that the flexibility of the situation that can result in overnight changing of which sectoral unions that they can join.  Effectively, these workers if they are employees of these suppliers have lost their basic freedom of association and the right to form and/or join trade unions.  Prior to this any new employee of the workplace can easily form/join trade unions, irrespective of whether they are local or migrant workers.

(11) The Private Employment Agency, as provided for in the Private Employment Agencies Act 1971, does the service of finding workers for workplaces, and once the workers are supplied, these workers automatically are employees of the principal or owners of the said workplace, and the private employment agency is paid a statutorily fixed rate for their services. This is certainly a better practice, not detrimental to a just employment relationship and worker rights. All suppliers of workers must be private employment agencies, confined to the providing of service of supplying workers, and not be made into employers themselves of the workers after they have supplied them to the principal or owners of workplaces.

(12) It must be pointed out that the Employment Act 1955 amendments were proceeded with and passed in both houses of Parliament, despite the fact that there was strong opposition and protest from workers, trade unions including the Malaysian Trades Union Congress and the International Trade Union Confederation (“ITUC”), and civil society groups.

We hereby resolve:

(1) That the Malaysian government immediately repeal the amendments to the Employment Act 1955 with regard to the employment relationship and the contractor for labour, introduced vide Employment (Amendment) Bill 2011, and pending repeal not put into effect the said amendments.

(2) That the Malaysian government do the needful to maintain existing 2-party employment relationships between principals or owners of workplaces as employers, and workers that work in the said workplaces as employees of the said principals and owners.

(3) That the Malaysian government promotes and protect worker and trade union rights in Malaysia, and not permit any form or discrimination at the workplace or related to work amongst workers doing the same work and/or working at workplaces of principals or owners.

(4) The Malaysian Bar takes the stand that labour suppliers and/or contractors of labour should never be or continue to be employers of workers after they are supplied, accepted and start working at the workplaces of principals or owners. Thereafter, these workers shall be employees of the principal or owners of the workplace.

(5) That the Malaysian Bar continues to struggle for the promotion and protection of worker and trade union rights in Malaysia, including for just employment relationship, basic living wages and freedom of association consistent with the Principles of Decent Work and other universally recognised standards and principles.

The motion, as amended, was unanimously carried.

Source: Malaysian Bar Website

Why 'Sexual Harassment' proposed amendments to Employment Act must be withdrawn?

Why 'Sexual Harassment' proposed amendments to Employment Act must be withdrawn?

Let us look at the proposed amendments regarding 'sexual harassment' to be inserted in the Employment Act, and some of the reasons why these proposed amendments should not be passed are as follows:-

1) Inquiry by the employer? - should it not be by the Labour Department (or some other independent body) with the requisite training and skills to deal with questions of sexual harassment. - This proposed inquiry by the employer is even when the complaint relating to sexual harassment made....(ii) by an employee against any employer; or (iii) by an employer against an employee. (the only exception is when the employer is a sole proprietor.

- If the employer does not inquire - you complain to the Director General of Labour (DG) - and then if the DG feels that there should be an inquiry will direct the employer to conduct an inquiry..Again it is the employer who conducts the inquiry...

2) What happens if the worker is unhappy with the decision of the employer or the outcome of the inquiry - can the worker go for an appeal against the decision or a 'judicial review' in the Labour Court/High Court? Well, it looks like there is NO RIGHT OF APPEAL against the decision of the 'Employer Inquiry" or even the decisions of the DG on sexual harrasment except it falls under 81d(4), being where alleged perpetrator is employer who is a sole proprietor, and the DG has conducted the inquiry.

The amendments are purposely silent about this right of appeal and/or 'judicial review', and since this right of appeal are expressedly provided for certain other provisions in section 77 of the Act (which the new amendment proposes to also amend), we may conclude that there is NO avenue of appeal/judicial review with regards (a) decision of employer not to conduct inquiry; (b) decision of employer following inquiry; (c) decision of DG not to direct employer to conduct inquiry.

Even if there is to be an appeal or judicial review - are we going to only rely on the notes of the employer's inquiry or their grounds of decision - should there not be a re-hearing (or re-trial) before an independent body like a Court?

3) What happens to the perpetrator?

Well, if it is an employee, it is some what clear - but what if it was an employer or some other 3rd party - the amendments say "recommend that the person be brought before an appropriate disciplinary authority to which the person is subject to.." - what does this mean really? Maybe, in a partnership or a company, that authority be the panel of partners or Board of Directors... and what will they do ... impose 'fines"???? Should we not be talking about reporting to police... or is 'sexual harassment' not a crime???

And for perpetrators, both employees or employers..., there is no talk about paying suitable compensation to victims, and/or even making an apology to the victim.

What if the perpetrator is in the supervision or in the management or a director/partner of the company, what is the liability of the company/partnership/sole proprietor to the worker victim? No liability is certainly not acceptable - the should be vicarious liability at least...

Now, they want to introduce 'contractors for labour' - what happens if the perpetrator is an employee of some other employer ( i.e. contractors, sub-contractors or this new 'contractor for labour' (the outsourcing agent), if they allow it) - what will happen? With regard to these 'outsourced workers' of an outsourcing agent - who is sexually harassed by an employee of a factory - so who conducts the inquiry? the employer of the victim or the employer of the perpetrator???

If the harassment is committed by a 'visitor' to the factory on a worker in the factory premises- what happens? Will the factory be liable too? If the victim was an 'outsourced worker'(worker of some 3rd party), will the factory be liable? Is sexual harassment to be treated like 'occupational safety and health' whereby the owner/operator of the workplace is also definitely liable.

4) What happens to the victim?

Well, the victim certainly gets nothing - no compensation or apology from the perpetrator at all, etc - In fact the proposed amendments is totally silent about this except in cases where inquiry conducted by DG when perpetrator is 'sole proprietor' employer, whereby one can laugh at what the victim gets... victim can resign without giving notice, get 1 months notice pay and other benefits like 'termination benefits"....

81e. (1) Where the Director General decides under subsection 81d(4) that sexual harassment is proven, the complainant may terminate his contract of service without notice.

(2) If the complainant terminates the contract of service under subsection (1), the complainant is entitled to—

(a) wages as if the complainant has given the notice of the termination of contract of service; and

(b) termination benefits and indemnity,

as provided for under the Act or the contract of service, as the case may be.

5) Note the unquestionable power vested on the employer (and the DG) not to inquire into the complaint of sexual harassment - " is of the opinion that the complaint of sexual harassment is frivolous, vexatious or is not made in good faith." and this apparently cannot be challenged in court by way of appeal or 'judicial review' except maybe for cases where the alleged perpetrator was a sole proprietor.

77. Appeal against Director General's order to High Court.

(1) If any person whose financial interests are affected is dissatisfied with the decision or order of the Director General under section 69, 69B, 69C or 73 such person may appeal to the High Court.

Proposed Amendment of section 77

25. Subsection 77(1) of the principal Act is amended by substituting for the words “or 73” the words“,73 or subsection 81d(4)”.

One wonders whether a victim of sexual harassment is a '...person whose financial interests' is affected?? If not, then NO right of appeal.

What happens to persons unhappy with decisions made pursuant to subsection 81b(5)...or even 81c(1) or 81d(1)- should they also not have the right to appeal to the High Court under section 77?

6) The biggest worry for the victim of sexual harassment, especially the worker, is whether these amendments to the Act will effectively shut all other doors and avenues to access justice in cases of sexual harassment? Would the victim be compelled to first...or (only use) the clear avenues of access for justice in cases of sexual harassment which will be in this Employment Act only, if amended? Would these 'new' explicit procedures in the Employment Act prevent the taking of a civil suit claiming for compensation and punitive damages...or act to prevent the police investigation or a person being charged in court or even SUHAKAM conducting an inquiry?

If the inquiry finds that A is guilty of sexual harassment - would that be sufficient for criminal prosecution or even a civil case - or will we have to start all over again proving and establishing 'sexual harassment' ?

******************

SELECTED PORTIONS OF THE EMPLOYMENT (AMENDMENT) BILL 2011...

New Part XVa

27. The principal Act is amended by inserting after Part XV the following Part:

“Part XVa SEXUAL HARASSMENT

Interpretation

81a. For the purposes of this Part, “complaint of sexual harassment” means any complaint relating to sexual harassment made—

(i) by an employee against another employee;

(ii) by an employee against any employer; or

(iii) by an employer against an employee.

Inquiry into complaints of sexual harassment

81b.(1) Upon receipt of a complaint of sexual harassment, an employer or any class of employers shall inquire into the complaint in a manner prescribed by the Minister.

(2) Subject to subsection (3), where an employer refuses to inquire into the complaint of sexual harassment as required under subsection (1), he shall, as soon as practicable but in any case not later than thirty days after the date of the receipt of the complaint, inform the complainant of the refusal and the reasons for the refusal in writing.

(3) Notwithstanding subsection (2), an employer may refuse to inquire into any complaints of sexual harassment as required under subsection (1), if—

(a) the complaint of sexual harassment has previously been inquired into and no sexual harassment has been proven; or

(b) the employer is of the opinion that the complaint of sexual harassment is frivolous, vexatious or is not made in good faith.

(4) Any complainant who is dissatisfied with the refusal of the employer to inquire into his complaint of sexual harassment, may refer the matter to the Director General.

(5) The Director General after reviewing the matter referred to him under subsection (4)—

(a) if he thinks the matter should be inquired into, direct the employer to conduct an inquiry; or

(b) if he agrees with the decision of the employer not to conduct the inquiry, inform the person who referred the matter to him that no further action will be taken.

Findings of inquiry by employer

81c. (1) Where the employer conducts an inquiry into a complaint of sexual harassment Received under subsection 81b(1) and the employer is satisfied that sexual harassment is proven, the employer shall—

(a) in the case where the person against whom the complaint of sexual harassment is made is an employee, take disciplinary action which may include the following:

(i) dismissing the employee without notice;

(ii) downgrading the employee; or

(iii) imposing any other lesser punishment as he deems just and fit, and where the punishment of suspension without wages is imposed, it shall not exceed a period of two weeks; and

(b) in the case where the person against whom the complaint of sexual harassment is made is a person other than an employee, recommend that the person be brought before an appropriate disciplinary authority to which the person is subject to.

Complaints of sexual harassment made to the Director General

81d. (1) If a complaint of sexual harassment is made to the Director General, the Director General shall assess the complaint and may direct an employer to inquire into such complaint.

(2) The employer shall inquire into the complaint of sexual harassment when directed to do so under subsection (1) and submit a report of the inquiry to the Director General within thirty days from the date of such direction.

(3) If a complaint of sexual harassment received by the Director General is made against an employer who is a sole proprietor, the Director General shall inquire into such complaint himself in a manner prescribed by the Minister.

(4) Upon inquiry by the Director General of the complaint of sexual harassment under subsection (3), the Director General shall decide if sexual harassment is proven or not and such decision shall be informed to the complainant as soon as practicable.

(5) Notwithstanding subsection (3), the Director General may refuse to inquire into any complaint of sexual harassment received under subsection (3), if—

(a) the complaint of sexual harassment has previously been inquired into by the Director General and no sexual harassment has been proven; or

(b) the Director General is of the opinion that the complaint of sexual harassment is frivolous, vexatious or is not made in good faith.

(6) Where the Director General refuses to inquire into the complaint of sexual harassment received under subsection (3), he shall, as soon as practicable but in any case not later than thirty days after the date of the receipt of the complaint, inform the complainant of the refusal and the reasons for the refusal in writing.

Effects of decisions of the Director General

81e. (1) Where the Director General decides under subsection 81d(4) that sexual harassment is proven, the complainant may terminate his contract of service without notice.

(2) If the complainant terminates the contract of service under subsection (1), the complainant is entitled to —

(a) wages as if the complainant has given the notice of the termination of contract of service; and

(b) termination benefits and indemnity,as provided for under the Act or the contract of service, as the case may be.

Offence

81f. Any employer who fails—

(a) to inquire into complaints of sexual harassment under subsection 81b(1);

(b) to inform the complainant of the refusal and the reasons for the refusal as required under subsection 81b(2);

(c) to inquire into complaints of sexual harassment when directed to do so by the Director General under paragraph 81b(5)(a) or subsection 81d(2); or

(d) to submit a report of inquiry into sexual harassment to the Director General under subsection 81d(2); commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.

Concluding Remarks:-

1- These proposed amendments is bad is merely a 'feel good' activity for the BN government so that maybe they can happily proclaim that they have dealt with the issue of 'sexual harassment' at the workplace...or is it only at the workplace and does it also extend to outside the workplace especially to worker hostels, etc..?

2- Again the proposed amendments have been hurriedly tabled in Parliament without the required and necessary public consultation and discussion, and in this case it should go beyond the NLAC and should also include other civil society groups including also women rights groups and the Bar Council?

3 - What is worst is that the proposed amendments do not provide justice for the victim - no talk about compensation or damages..

4- What the BN government and Parliament should do is maybe develop and legislate a Sexual Harassment Act, and maybe even make sexual harassment a crime under the Penal Code. For sexual harassment at the workplace, the obligation and duty should be firmly placed on the employer, i.e. the owner/operator of the workplace to ensure as part of an employers obligation to provide an environment for workers that is free from sexual harassment, and if they fail to do this, then these employers/companies (including the Directors and all Partners) must be made personally liable to the victim, and required to do the needful to ensure real justice not to the victim - not "OK, you are a victim of sexual harassment so now you can leave your employment without giving notice and you will get the 1 month's notice pay plus any termination/retrenchment benefits" - this is not justice. Worker victims certainly do not want this - they certainly want to continue to work but in an environment free of sexual harassment - not the right to lose your job.

5 - Immediately withdraw these bad proposed amendments now...

MTUC : New Laws needed to ensure justice for workers in Malaysia MTUC’s proposed National Retrenchment Fund Could Have Assisted former Nikko Electroni

New Laws needed to ensure justice for workers in Malaysia

MTUC’s proposed National Retrenchment Fund Could Have Assisted former Nikko Electronics workers

Recently, it was reported that the retrenched workers of Nikko Electronics Bhd protested outside Penang State Assembly.(Star, 2/12/2009), seeking the State governments assistance to get their benefits and compensations. These were amongst the 1,000 odd workers that were retrenched suddenly without notice by their employer in July 2008. Apparently, their plea to the Minister, the Federal and State government have not been successful to date. If there was a National Retrenchment Scheme, as proposed by MTUC in 1998, in place, they could have resorted to this to get some compensation. Malaysian laws also need to be amended to ensure justice for all workers, especially those who lose their jobs and source of income.

There must be a new law that provides for compensation to workers in Malaysia that are terminated, retrenched or laid off by the employers as the current Employment (Termination And Lay-Off Benefits) Regulations 1980 is no longer just or sufficient given the fact of changes in the employment patterns in Malaysia.

Today, a lot of employers hire workers, be it local workers or migrant workers, on a short fixed term basis which may range from 1 to 2 years. Thereafter, a new contract may be entered into for some.

There is also the practice of contracting out some of the jobs to private contractors, and in this case the workers become employees of the contractor, and not the owner of the place that they work with.

This changing employment practices has had serious implications for workers, for they not only lose job security but also rights as workers, including the right to join existing unions.

The current Employment (Termination And Lay-Off Benefits) Regulations 1980 is for the long-term worker, and this is also reflected in Regulation 3(1) that states ‘…that an employer shall be liable to pay termination or lay-off benefits payment calculated in accordance with regulation 6 to an employee who has been employed under a continuous contract of service for a period of not less than twelve months…’ . This means that short-term fixed contract employees who have worked for less than a year is not entitled to any benefit under the regulations.

Eventhough Regulation 3(2) provides that, ‘For the purpose of this regulation a continuous contract of service for a period of not less than twelve months shall include two or more periods of employment which are not less than twelve months in the aggregate if the intervening period or periods between one period of employment and another does not in the aggregate exceed thirty days…’, unscrupulous employers have been known evade this by entering into new short-term contracts after the lapse of 30 days, or even causing the worker to enter into new contractors with some labour provider.

Regulation 6, which provide for the calculation of benefits, that state as follows, :-

‘…the amount of termination or lay-off benefits payment to which an employee is entitled in any case shall not be less than —

(a) ten days’ wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for a period of less than two years; or

(b) fifteen days’ wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for two years or more but less than five years; or

(c) twenty days’ wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for five years or more,

and pro-rata as respect an incomplete year, calculated to the nearest month…”

clearly will not provide justice for the short-term fixed contract workers, and workers working in the establishment allegedly under some other labour provider or contractor.

To aggravate matters, unionized workers, when they most need the assistance of their unions become no longer members of the union by a bad law, being section 26(1A) of the Trade Unions Act 1959, which states, “No person shall join, or be a member of, or be accepted or retained as a member by, any trade union if he is not employed or engaged in any establishment, trade, occupation or industry in respect of which the trade union is registered…”. This provision must be repealed, and membership of the union after being retrenched, laid-off or terminated should continue for so long as necessary for as rights of these members as workers are pending.

MTUC after the 1998 economic crisis, being fully aware of the fact that many a worker were not paid their requisite compensation and benefits by reason of the fact the employers did not have any more money, proposed to the Malaysian government to set up a National Retrenchment Scheme.

When these companies renege on their legal and contractual obligations to their workers by defaulting on statutory contributions to the Employees Provident Fund (EPF) and to the Social Security Organisation (SOCSO) as well as payment of retrenchment benefits pursuant to the Employment (Termination and Lay–Off Benefits) Regulations, 1980, then this National Retrenchment Fund could come in to immediately assist these workers.

Although in March 2009, The Malaysian government has ruled out setting up a retrenchment fund (Sun, 4/3/2009, No plan for retrenchment fund, MTUC urges that the government to reconsider this decision, and immediately set up this very much needed National Retrenchment Fund, which will surely benefit workers like those from Nikko Electronics Bhd.

Syed Shahir Syed Mohamud,
President
Malaysian Trades Union Congress
Subang Jaya, 03/12/2009

A lot of points were raised in the above statement, but this is what NST reported.

There must be a new law to provide compensation to Malaysian workers who are terminated, retrenched or laid-off by employers, says Malaysian Trades Union Congress (MTUC) president Syed Shahir Syed Mohamud. He said this was because, the current Employment (Termination And Lay-Off Benefits) Regulations 1980 was no longer just or sufficient, given the fact of changes in the employment patterns in the country.

"Today, a lot of employers hire workers, be it local workers or migrant workers, on a short fixed-term basis which range from one to two years.

Thereafter, a new contract may be entered into, for some.

"There is also the practice of contracting out some of the jobs to private contractors, and in this case, the workers become employees of the contractor, and not the owner of the place that they work with," said Syed Shahir in a statement here today.

He said this changing employment practice has had serious implications for workers, for they not only lose job security but also rights as workers, including the right to join existing unions. - Bernama- New Straits Times, 3/12/2009, New laws needed to ensure justice for workers: MTUC

Nepali Government takes stand that there will be no more deduction of wages of Nepali workers for LEVY.

LEVY - rightly, it is the employer that has to pay the levy.

BUT...if the worker agrees that his/her salary can be deducted to enable the employer to recover the amount the employer paid for levy, AND the Labour Minister of Malaysia gives a special permission that the said employer can deduct from the salary of the said workers the amount the employer had paid for levy.

What is sad is that the worker is forced to sign an agreement that he allows his salary be deducted for the employer to recover the wages paid before he gets employed...or as part of his/her employment condition. This is so wrong. The worker has no choice. Say 'No' to deduction of salaries, and you do not get employed. Say 'Yes' and you get employed.

Many workers do not even realize that they do have a choice in the matter... Can workers after they are employed write to the Labour Minister and say that they do not agree to their wages being deducted for the employer to recover the levy that the employer was required to pay for hiring a foreign worker? I believe that the worker can ...and the Labour Ministry/Department should cancel that special permission.

When does a worker become a worker? After there is a valid employment agreement... and after he/she has started working. Agreement for the employer to be able to deduct the worker's salary to recover the levy paid must come from the worker only at that stage... i.e. after he/she has started working. What do you think.

Why does the Ministry of Labour (Labour Department) give these special permissions for employers to be allowed to deduct wages of workers to recover the LEVY that the employer is made to pay for employing foreign workers (rather than local workers). The giving of that special permission for the deducting of wages makes a mockery of that very government policy that requires employers of foreign workers to pay levy for each and every foreign worker that the said employer employs.

Rather than give special permission for employers to deduct worker's wages, the government should just give special waiver for the payment of levy for certain workers. That would be so much more just. Now, Malaysian government partakes in the oppression of foreign workers by allowing these additional deductions.. Some migrant workers, do not get any pay for about 6 months or more because the employer is 'deducting wages...' for levy, etc...and Malaysian government has implicitly endorsed this practice... [The law stipulates that the maximum deduction cannot be more than 50% of the salary...so, how come employers get away with not paying salary for so many months?]

DEDUCTIONS FROM WAGES

24. Lawful deductions. (Employment Act 1955)

(1) No deductions shall be made by an employer from the wages of an employee otherwise than in accordance with this Act.

(2) It shall be lawful for an employer to make the following deductions:

(a) deductions to the extent of any overpayment of wages made during the immediately preceding three months from the month in which deductions are to be made, by the employer to the employee by the employer's mistake;

(b) deductions for the indemnity due to the employer by the employee under section 13(1);

(c) deductions for the recovery of advances of wages made under section 22 provided no interest is charged on the advances; and

(d) deductions authorized by any other written law.

(3) The following deductions shall only be made at the request in writing of the employee:

(a) deductions in respect of the payments to a registered trade union or co-operative thrift and loan society of any sum of money due to the trade union or society by the employee on account of entrance fees, subscriptions, instalments and interest on loans, or other dues; and

(b) deductions in respect of payments for any shares of the employer's business offered for sale by the employer and purchased by the employee.

(4) The following deductions shall not be made except at the request in writing of the employee and with the prior permission in writing of the Director General:

(a) deductions in respect of payments into any superannuation scheme, provident fund, employer's welfare scheme or insurance scheme established for the benefit of the employee;

(b) deductions in respect of repayments of advances of wages made to an employee under section 22 where interest is levied on the advances and deductions in respect of the payments of the interest so levied;

(c) deductions in respect of payments to a third party on behalf of the employee;

(d) deductions in respect of payments for the purchase by the employee of any goods of the employer's business offered for sale by the employer; and

(e) deductions in respect of the rental for accommodation and the cost of services, food and meals provided by the employer to the employee at the employee's request or under the terms of the employee's contract of service.

(5) The Director General shall not permit any deduction for payments under subsection (4)(e) unless he is satisfied that the provision of the accommodation, services, food or meals is for the benefit of the employee.

(6) Where an employee obtains foodstuff, provisions or other goods on credit from a shop the business of which is carried on by a co-operative society registered under the Co-operative Societies Act 1993, it shall be lawful for his employer, at the request in writing of the employee and with the agreement of the manager of the co-operative shop, to make deductions from the wages of the employee of an amount not exceeding the amount of the credit and to pay the amount so deducted to the manager in satisfaction of the employee's debt.

(7) Notwithstanding subsections (2), (3), (4) and (6) the Director General, on an application by an employer or a specified class or classes of employers, may permit any deduction for a specified purpose from the wages of an employee or a specified class or classes of employees subject to such conditions as he may deem fit to impose.

(8) The total of any amounts deducted under this section from the wages of an employee in respect of any one month shall not exceed fifty per centum of the wages earned by that employee in that month.

(9) The limitation in subsection (8) shall not apply to-

(a) deductions from the indemnity payable by an employer to an employee under section 13(1);

(b) deductions from the final payment of the wages of an employee for any amount due to the employer and remaining unpaid by the employee on the termination of the employee's contract of service; and

(c) deductions for the repayment of a housing loan which, subject to the prior permission in writing of the Director General, may exceed the fifty per centum limit by an additional amount of not more than twenty-five per centum of the wages earned.

[Subs. Act A1026]

Let it be made very clear that the person that is required to pay the levy is the EMPLOYER...not the worker. {As such, I do not see how the Director General of Labour can give special permission under this section to enable employers to cut workers' wages to recover the Levy that the employer of foreign workers had to pay...}.

It is good that the Nepal Government has made a strong stand that their workers are no longer going to pay levy on behalf of the employer.

The Department of Foreign Employment (DoFE) has stopped providing foreign employment permits to individuals who agree to pay a levy to the Malaysian government in their work contract.

Issuing a notice to all the associated stakeholders, the DoFE said that the decision had been effective since Sept. 15.

Mohan Krishna Sapkota, director general of the DoFE, said that as per the new decision of the Malaysian government, only the recruiting companies in Malaysia will be responsible for paying the workers' levy and it will not come out of their salary.

"Thus, no such contract agreeing to pay the levy by the workers themselves will be permitted," he said.

Malaysia, where around 400,000 Nepali migrant workers are working, made this decision last April.

According to the DoFE, it had stopped issuing approvals to such candidates after receiving the direction from the Nepal Embassy in Malaysia, which works to ensure the rights of workers and reduce their financial burden.

Foreign employment entrepreneurs said that the decision by the Malaysian government was praiseworthy as it helps reduce the financial burden of Nepali workers there.

Earlier, as per the labour contract signed between Nepal and Malaysia, Nepali workers had to pay Ringgit 100 as levy per month and the basic salary was only Ringgit 481.

Tilak Ranabhat, president of the Nepal Foreign Employment Agencies Association, said that the foreign employment agencies had been encouraged by this provision.

"Now Malaysia has also agreed to fix the basic salary at Ringgit 546," he said.
Malaysia has an estimated three million foreign workers from South Asia, including Nepal, India and Bangladesh and from neighbouring Indonesia, the Philippines and Thailand.

Kumud Khanal, managing director of Fusion International, a foreign employment consultancy, claimed that the Malaysian government had made the decision to attract more Nepali workers to the country as it started to receive less human resources from other major workforce supplying countries like Bangladesh and Indonesia.

He said that demand for workers in the furniture, food and plastics industries was increasing with the salary ranging between Ringgit 750 to 1,000. "These sectors have not been affected even during financial crisis," he said.

He said that it was the right time to send more qualified workers to Malaysia and lobby for further increasing the salary.

Meanwhile, the DoFE has also stopped issuing employment approvals for house maids and construction workers for Malaysia after the direction from the Nepal Embassy. Now onward, besides women applying for foreign employment in Malaysia, even individuals applying to work as security guards have to get their necessary documents attested by the Malaysian Embassy in Nepal. - Ekantipur.com, 18/9/2009, Nepalis in Malaysia not liable for levy

Worker Rights Education

RIGHTS EDUCATION PAMPHLET

MIGRANT WORKER & WORKER RIGHTS IN MALAYSIA

Which workers are covered by the Malaysian Employment Act?
All workers whose earnings do not exceed RM1,500.00 a month. All manual workers irrespective of how much they earn per month. These are workers with a contract of service.

What is a contract of service?
A contract of service is an agreement whereby a person agrees to employ another as an employee and the employee agrees to serve his employer as an employee;
A contract of service can be either oral or writing; The worker has the right to get and keep a copy of the contract of service (or employment agreement)

Are Migrant Workers covered by the Employment Act 1955?
Yes, Migrant workers are covered

What kind of rights are found in the Employment Act 1955?
All kind of worker rights including maximum hours of work, overtime work and rates of payment, annual leave, paid holidays, paid sick leave, wages and what employer can lawfully deduct from the wage and maternity leave and benefits.

If the worker has signed a contract with the employer, can the worker still rely on the Employment Act 1955?
Yes, he can. If the rights contained in the Employment Act is better that what is provided in the contract, then the workers must be given the better rights. If the rights in the contract are better than what is in the Employment Act, then the worker can claim those better rights in the contract.

What is the meaning of "normal hours of work"?
“Normal hours of work” means the hours of work as agreed between an employer and an employee in the contract of service to be the usual hours of work per day. The normal hours of work should not exceed :
i. 8 hours a day excluding a period of rest;
ii. 5 consecutive hours of work without a period of rest of not less than thirty minutes; and
iii. 48 hours in a week.

Upon mutual agreement, hours of work can exceed 9 hours a day but it cannot exceed 48 hours in a week.

What does it mean by ‘overtime’?
Overtime means the hours of work carried out in excess of the normal hours of work per day.

At what rate should an employee who work overtime be paid?
Overtime rate should not be less than the following:
On normal day, 1 1/2 times the hourly rate of pay.
On rest days, 1 1/2 times the hourly rate of pay on a rest day.
On public holiday's , 1 1/2 times the hourly rate of pay on a public holiday.

Is there any restriction on the overtime hours that an employee could work in one month?
An employee should not be required to work overtime exceeding a total of 104 hours in a month.

Is it compulsory for a contract of service to specify a wage period? What should be the length of the wage period?
A contract of service shall specify a wage period not exceeding one month. If the contract does not specify this, the wage period would be deemed to be one month.

When should wages be paid to employees?
Wages (less any lawful deductions) are payable not later than the seventh day after the end of wage period. The employer may apply for extension of payment of wages time from the Director General of Labour Department.

What are lawful deductions?
These are only those that are permitted in law like the Employees Provident Fund (EPF/KWSP) and SOCSO. The Employment Act also allows for deductions to the extent of any overpayment of wages made during the immediately preceding three months, deductions for the recovery of advances of wages not more than 1 months wages.

What is the total amount of lawful deductions allowed by law?
The total of any amounts deducted under this section from the wages of an employee in respect of any one month shall not exceed half the wages earned by that employee in that month. The employee must receive at least half monthly wages.

When should wages be paid to an employee upon a normal termination of contract of service?
Wages should be paid to an employee not later than the day when the contract of service is terminated.

What are the types of work that women are prohibited from doing under the Act?
The types of work that women are prohibited are: underground work, industrial and agricultural undertaking between 10.00 pm – 5.00 am without exemption from the Director General of Labour.

How many rest days should an employee be entitled to under the Act?
An employee should be entitled to one whole day of rest day in each week.

Is it lawful for an employer to require his employee to work on a rest day?
An employee can be required by his employer to work on a rest day under the following circumstances: accident, actual or threatened in the workplace; work which is essential to the life of the community; work which is essential to the defence or security of the country; urgent work need to be done to the machinery or plant; an interruption of work which was impossible to foresee; work to be performed by employees in any industrial undertaking essential to the economy of Malaysia or any essential service as defined in the Industrial Relations Act 1967.

How should an employee who is required to work on a rest day be paid?
An employee who is required to work on a rest day shall be paid one additional day wages at his ordinary rate of pay. (i.e. 2 times normal wages)

How many paid holidays should an employee be entitled to in one year?
An employee should be entitled to paid holidays of not less than 10 days in a year. The 10 paid Public Holidays are Workers Day (May 1), King's Birthday, Independence Day (August 31), State Sultan's Birthday or Federal Territory Day, and 6 other public holidays that the employer must choose and inform the workers by notice by the start of the year.

How should an employees who are required to work on holidays be paid?
An employee who is required to work on holiday shall be paid two additional days wages at his ordinary rate of pay. (i.e. 3 times normal wages)

How many days of paid annual leave should an employee be entitled to?
Less than two years of service: 8 days per year
Two or more but less than 5 years of service: 12 days per year
Over five years of service:- 16 days per year

Where an employee who is on paid annual leave becomes entitled to sick leave or maternity leave while on such annual leave, the employee shall be granted the sick leave or the maternity leave, as the case may be, and the annual leave shall be deemed to have not been taken in respect of the days for which sick leave or maternity leave is so granted.

How many days of paid sick leave is an employee entitled to in one year?
Paid sick leave per calendar year: Less than two years of service 14 days
Two or more but less than five years of service 18 days
Over five years of service 22 days

Where hospitalisation is necessary up to 60 days

What are the circumstances under which an employee is not entitled to sick leave pay?
An employee is not entitled to paid sick leave during maternity leave or for any period during which he/she is receiving periodical payments under Workmen's Compensation or SOCSO.

Under what circumstances is a contract of service deemed to be broken by an employee?
A contract of service is deemed to be broken by an employee if the worker has been continuously absent from work for more than two consecutive working days without prior leave from the employer, unless the worker has a reasonable excuse for such absence and has informed or attempted to inform the employer of such excuse prior to or at the earliest opportunity during such absence.

Under what circumstances is a contract of service deemed to be broken by an employer?
A contract of service is deemed to be broken by an employer if an employer fails to pay wages within seven days after the wages period.

Can an employer terminate a local worker and then employ a migrant worker?
No, the employer cannot terminate the contract of service of a local worker for the purpose of employing a migrant worker. (section 60M)

Can the employer treat migrant workers and local worker differently?
No, they cannot. The law says if a local employee is being discriminated against in relation to a foreign employee, or if a foreign employee is being discriminated against in relation to a local employee, by the employer in respect of the terms and conditions of employment, then the worker can complain to Labour office.

When it comes to retrenchment, who will be terminated first?
Generally, it is the worker who is last to be employed who will be first to be terminated.

However, when it comes to migrant workers, section 60N of the Employment Act states that, "Where an employer is required to reduce his workforce by reason of redundancy necessitating the retrenchment of any number of employees, the employer shall not terminate the services of a local employee unless he has first terminated the services of all foreign employees employed by him in a capacity similar to that of the local employee." We say that this is unjust, and also goes against Malaysian Federal Constitution, which guarantees equality. We say this law is bad and invalid.

What is the regulation made pursuant to the Act that provides for the entitlement of termination and lay-off benefits?
The Employment (Termination and Lay-off Benefits) Regulations 1980

NOTE:- This pamphlet contains the basic law, as understood by us, and it is best to refer to the Employment Act 1955 (Akta Kerja 1955) for the exact wording. Workers can also go to the Labour office to get advice and assistance. Assistance also can be obtained from the Bar Council Legal Aid Centres and also the Malaysian Trade Union Congress (MTUC) .

* This is a result of a collaboration between Workers Hub For Change (WH4C), Burma Campaign, Malaysia and Network of Action for Migrants Malaysia (NAMM)