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

ALIRAN

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

Pusat KOMAS

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)

Tenaganita

Workers Assistance Center, Inc (WAC),

WH4C (Workers Hub For Change)

Yayasan LINTAS NUSA Batam – Indonesia

Parasites of workers’ sweat and toil (ALIRAN Monthly)

Parasites of workers’ sweat and toil

By admin, on 18 May 2011

[Translate]

More employers are now turning to labour outsourcing agents for workers, prompting Charles Hector to call for a restoration of a proper employer-employee relationship.

sulekha.com

Workers’ rights in Malaysia are slowly being eroded by a government that places more importance on the well being of companies and corporations, rather than workers, be it local or foreign. One such phenomenon is the rise in the practice of workers being supplied to employers by outsourcing agents and companies, whereby the supplied workers do not enter into an employment relationship with employers that own and control the workplace.

One wonders whether the usage of the term ‘outsourced’ was intentional as it is so easily taken to be all right as the practice of outsourcing work is now a common occurrence accepted generally. In Malaysia, for instance, most of the banks have already outsourced internet banking, phone banking and even cheque processing and clearance to other companies.

The material difference between outsourced work and outsourcing agents/companies is that the latter are dealing with human workers – not specific types of work. On the request of companies and owners that have factories, plantations, agricultural undertakings and other workplaces, outsourcing agents supply human workers, who then work at these workplaces without allegedly entering into any working relationship with the employers that own the place where they work. For the work done by these outsourced workers, the workplace owners would pay these outsourcing agents who in turn will pay the outsourced workers after of course keeping a portion for themselves. The more hours the workers toil, the more these outsourcing companies earn.

Private employment agencies and ‘outsourcing’ of labour companies

Private employment agencies and/or ‘head hunters’, who also do get workers and supply them to companies and owners of workplaces, are very different in that once the workers are accepted at the workplace, an employment relationship is entered into with the employers. The employment agencies get paid by the workers and/or the employers a certain fee, known as a placement fee. Private employment agencies are governed by the Private Employment Agencies Act 1981, and the fee that can be charged is also fixed. For a local placement, the fee is 20 per cent of the initial month’s pay, and for an overseas placement it is 25 per cent.

In contrast, ‘outsourcing’ agents and companies parasite on the fruits of the sweat and toil of these workers indefinitely. These workers at the workplace, doing usually the same work as all other workers in the factory, would also be naturally discriminated not only with regard to wages and other employment benefits guaranteed by Malaysian law, but also be deprived of the right to be members of unions that exist at these workplace. The negotiating power of the other workers and the local unions will thus be weakened when it comes to collective agreements.

Malaysian workers are also now victims of ‘outsourcing’ agents

For a long time, many Malaysians, apart from unions such as the MTUC, have not paid much attention to this development, which seeks to avoid employment relationship. It is an affront to justice, as it involves only foreign migrant workers. Today, many local workers, including those from Sabah and Sarawak, are also falling into this sub-class of workers,

Some companies have stopped direct employment preferring to get even local workers through outsourcing agents and companies in an attempt to avoid employment relationships.

Employment Act 1955 – historical victory for workers in Malaysia

In 1955, the then British administration saw fit to do away with all these kinds of bad employment practices and other forms of precarious employment, including indentured labour, bonded labour, the kanggani system, forced labour, ‘slavery’, the middle man (or ‘contractor for labour’) and this was a good thing for workers. The Employment Act 1955 also clearly established four very important principles in employment relationships in Malaysia:

• Job security, including security of tenure until retirement age;
• Legally guaranteed minimum worker rights, which included working hours, fully paid rest days, annual leave, public holidays, sick and hospitalisation leave, maternity leave, overtime rates, termination and lay-off benefits, and wages.
• Due process to deal with worker misconduct and/or termination. Termination can only be by reason of just cause or excuse, and there has to be a domestic inquiry, where the worker has a right to be heard.
• Access to justice, including the right to lodge complaints with the Labour Department (Labour Courts), and the Industrial Relations Department (Industrial Courts).

Return of bad employment practices to the detriment of workers

Over the past few years, slowly a new employment practice crept in: outsourcing agents and companies, who supply workers to different employers – individuals, businesses or companies – to work at the workplaces of these employers. Unlike the private employment agencies, these outsourcing agents and companies do not stop at just supplying the workers, collecting their placement fees and leaving, but continue to take significant portions of wages paid to these workers by the employers.

As an example, an employer may pay a remuneration of RM36 for the work done by a particular worker for nine hours. The outsourcing agents take RM16 and gives the workers only about RM20. The same happens with regard to overtime and Sunday or public holiday work payments. Just taking this RM16 per worker per normal day’s work, an outsourcing agent and company can make almost RM500,000 per month for 100 workers supplied. Some of these outsourcing agents and companies bring in thousands of workers and earn millions of ringgit living off the sweat and toil of workers. The employer, who does not consider these workers their own workers, would happily end up discriminating against these workers in terms of wages, work benefits and other worker rights.

Termination is also easily done, without the need for any due process. All that employers need to do is tell the outsourcing agent and company that they do not want worker A, and worker A will be taken away and another may be sent in their place. Generally, these workers only get paid for the days or hours that they work. They will not get the legally guaranteed workers’ rights, including paid rest days, paid annual leave, 10 paid public holidays per year, paid maternity leave and other benefits, and paid sick and hospitalisation leave.

Outsourcing agents’ practices are illegal

What is most disturbing is the fact that what is practised by these outsourcing agents and companies and their employers may be illegal under present laws in Malaysia, especially the laws with regard to employment.

These outsourcing agents and companies are really, what one would call ‘contractors for labour”. Our current Employment Act does not allow such ‘contractors for labour’. The current law, however, does allow for ‘sub-contractors for labour’, which is defined as “any person who contracts with a contractor or sub-contractor to supply the labour required for the execution of the whole or any part of any work which a contractor or sub-contractor has contracted to carry out for a principal or contractor, as the case may be.

The definition clearly does not include ‘contractor for labour’, and cannot legalise outsourcing agents (and/or the practices employed by them) and some employers today.

Government’s attempts to legalise outsourcing of labour companies thwarted

The Malaysian government finally came to a realisation and tried to legalise the ‘middle man’ in an employment relationship through D.R.25/2010 Employment (Amendment) Bill 2010, which was tabled in parliament in July 2010. The proposed amendments included a definition for ‘contractor for labour’ to mean a person who contracts with a principal, contractor or sub-contractor to supply the labour required for the execution of the whole or any part of any work which a contractor or sub-contractor has contracted to carry out for a principal or contractor, as the case may be.

But this time the Malaysian trade union movement and members of the public strongly protested the move and finally the government withdrew the bill in October 2010 (The Star,13 October 2010, ‘Employment Bill withdrawn’). This meant that what was acknowledged as being illegal is still illegal today.

In my opinion, the only Act that may assist matters is the Private Employment Agencies Act 1981. This means that once workers are supplied to employers, an employment relationship is created, and the employer is now responsible for all these workers, and will have to ensure that all rights and benefits recognised in law are provided to all these workers. One may want to consider this given the fact that we may now have over 200 ‘illegal’ outsourcing of labour companies in Malaysia.

Guarantee of equality in Malaysia extends also to workers

Article 8 of the Federal Constitution, which applies to all persons not just citizens, guarantees equality. This means that workers who do the same work are certainly entitled to the same wages and other work benefits as all other workers at the workplace. Note also that the Employment Act 1955 provides specifically that there should not be any discrimination based on whether one is a citizen or a foreign worker.

The past and better practice of employing foreign workers

Previously, when employers faced a shortage of workers, they needed to first seek the approval of the relevant body governing the particular sector. In the construction sector it was the Construction Industry Development Board(CIDB). The employer would have to satisfy the board that efforts have been made to get local workers and indicate the number of foreign workers that it would require to employ. Upon getting approval, the employer would start identifying and getting these foreign workers. For this purpose, they may use the services of agents in the country of origin and sometimes also agents in Malaysia. Some companies, would even go to the country of origin to conduct interviews and tests to ensure that the workers that they bring in have the necessary skills and aptitude for the work.

The contracts of employment will then usually be signed with the workers in the country of origin and then the process begins to obtain the required work pass/visa from the Malaysian immigration authorities, and then the workers are brought into Malaysia. Malaysia also imposes a levy that employers need to pay for every worker brought in, and the workers are also required to have a clean bill of health before they are allowed into country. In some countries, such as India, the government of India also gets involved through the Protector of Emigrants (POE), and a standard employment agreement is signed by the workers before an agent of the POE, while the employer signs the agreement in front of the staff of the Indian High Commission in Malaysia.

In short, under this system there was no ‘third party’ and when the workers arrived, they came as workers of the employer, and were entitled to all the protections accorded under Malaysian law for workers.

The legality of ‘fixed term contracts’ of employment is also questionable

With the advent of migrant workers into Malaysia, what also happened was the creation of a new employment relationship. This took the form of fixed-term contracts usually for a period of at least three years only – something that was really not permissible under the existing Employment Act 1955, which generally provided for employment until retirement. Earlier termination of the employment contract was only possible by resignation of the worker, lay-off/retrenchment and termination due to closure of the employer’s business or change in the manner of operations that made some workers redundant or due to termination after due inquiry into serious misconduct committed by the worker.

The employment laws have not yet been amended to provide for ‘fixed term contracts’, including clear remedies for earlier terminations of these fixed-term contracts. Even now, the lay-off and termination benefits provided for in our Employment Act looks at length of service as a factor in the calculation of benefits, a clear indication of the intention of the Act that the employment relationship should be until retirement. As such, for effective remedies, workers under fixed-term contract may have to look at laws outside existing employment laws, like the Contract Act for effective remedies, and their access to justice may have to be the civil courts.

Domestic workers and the emergence of recruitment agents

When the demand and need for domestic workers arose, it became impractical for employers to personally do all that was required for the employment of one or two domestic workers and they had to rely on licensed recruitment agents here in Malaysia. The same was the case when there was an increase in the number of smaller employers requiring just a few workers, usually in small shops and restaurants.

July 2005 – Government allows employment through ‘outsourcing’ concept

Then, suddenly in July 2005, the government decided to allow for the employment of workers through the outsourcing concept. But it must be pointed out that the government intended for these outsourcing companies to merely supply workers to employers, and not to become the employers of these workers.

Government never wanted the ‘outsourcing companies’ to be the employers

Deputy Prime Minister Muhyiddin Yassin clearly stated that “employers are the people who should be responsible for their foreign workers. Outsourcing companies are only responsible for bringing them in. After that, employers must assume full responsibility” (New Straits Times, 21 May 2010, ‘Higher levies for foreign workers’).

Clearly, what has been practised by outsourcing agents and companies, and employers is not only illegal, but also something that clearly goes against the intention of the Malaysian government. No employer can today escape an employment relationship with its workers by simply stating that these are not my workers but are those that are supplied by some ‘outsourcing’ agent or company. As employers, they are not only obligated to ensure that all workers’ rights are recognised and respected, but they also have to fulfil all obligations that the law places on the employers.

With regard to migrant workers, employers have the additional obligations of not only providing accommodation but also providing social security protection. Such protection will not just cover the workplace but the workers’ entire stay in the country. The Workmen’s Compensation (Foreign Workers’ Compensation Scheme) (Insurance) Order 1998 provided for additional benefits for not only death and personal injury sustained in an accident which arises out of and in the course of employment but also accidents that occur outside working hours. This is also clear indication that when it comes to migrant workers, the employer’s obligation to these workers’ welfare extends well beyond the workplace and working hours.

Poor enforcement and inadequate laws allowed injustice to continue

Poor enforcement and inadequacies in the present government’s administration are much to blame for this. All matters concerning workers and employment matters should rightly come under the Ministry of Human Resources. Today, when migrant workers claim their rights, employers can very easily just terminate them and immediately send them back to their home country. All that they need to do is go and tell the Immigration Department that they want to cancel the workers’ pass/visa, and the Immigration will do that without even talking to the migrant worker to find out whether they really want to leave before the end of their fixed-term contract or determining whether there are any outstanding labour issues, such as non-payment of wages and other claims/matters outstanding. They do not even check to determine whether there are any complaints lodged with the Labour Department, the police and/or the Human Rights Commission.

Sometimes, employers may just rush workers off to the airport and put them on board a plane back to their home country. The employers and/or their agents then go to the Immigration Department and say that the workers had gone back, and the Immigration Department happily cancels the visa/pass. A better practice would be that if workers are to be sent back especially before the expiry of their contract period, they should be personally interviewed by the Labour Department, using an interpreter. Such an interview should not be in the presence of their employer or agent and should establish that there are no outstanding unsettled claims and/or pending action, and if the Labour Officer is satisfied, he or she should issue and sign a certificate to that effect. .

Sadly, the Employment Act 1955 has no provision that makes it an offence for employers to discriminate against and/or terminate workers who have lodged complaints with the Labour Department, Industrial Relations Department, the police and/or the Malaysian Human Rights Commission. It is useless to have mechanisms for access to justice without the right laws to prevent employers from lodging complaints against workers for complaining.

Maybe the new Whistle Blowers Protection Act 2010 can be relied on, but it is best that the Employment laws are also amended to clearly prevent employers from acting against the interest of justice and making a mockery of existing laws.

Attempting to avoid the employment relationship a global phenomenon

The practice of trying to avoid the employment relationships and the duties and obligations that come with it are not just a phenomenon in Malaysia, but is happening worldwide. The international community frowns against such bad practices which affects worker rights, and even the International Labour Organisation (ILO) came up with a Resolution Concerning the Employment Relationship, and thereafter The Employment Relationship Recommendation No. 198. In 2007, ILO came out with a 75 page document entitled, “The Employment Relationship: An annotated guide to ILO Recommendation No. 198”

For a long time, it was only foreign migrant workers that were affected by the unjust practices of outsourcing agents and companies, and employers but today it also involves local Malaysian workers, many of whom are from Sabah and Sarawak. To be fair, some employers prefer to directly employ their migrant workers, which is still possible in Malaysia, but is becoming more difficult as some immigration officers are pushing them to go to the outsourcing agents/companies to get their workers.

Too many workers have been denied justice in Malaysia

This matter has never been brought to court because most affected workers then were mainly migrant workers, who were terminated and sent back would not be able to commence or even maintain action. Even if they had made complaints or commenced action, the complainants and/or the plaintiffs under the law are required to be in court for cases to proceed.

So many workers in Malaysia have been denied justice while violators of human rights and workers’ rights continue to prosper.

The government of the day and Malaysians should strive even harder to ensure justice for all in Malaysia, irrespective of whether they are citizens or foreigners, poor or rich. One thing that must be done immediately is to end the unjust practices of outsourcing agents and some bad employers.

Charles Hector, an Aliran member, is a human rights lawyer based in Pahang.

Anti-Worker Amendments are being planned by Malaysian government - MTUC Position Paper, 21/4/2010

* The Malaysian government is planning to introduce some very anti-worker laws, but unfortunately, as usual, they do not tell the public what these proposed amendments are - let alone consult with the ordinary Malaysian. Suddenly, the Bill will be tabled in Parliament, and before you know it, it has become law. This MTUC Position Paper gives us a glimpse of some of these proposed amendment of the laws, see " 7. MTUC’s comments and response to Ministry’s proposal" (I have copied and converted the MTUC position paper from its PDF format, into the HTML format - and note that there may small errors created in the process.

* It must be pointed out that as at 2007, only 6.3% (i.e. 802,339) of the 12,744,000 strong workforce are unionized, - the rest are not represented by unions. Given this fact, it is important that these 93% (about 12 million) workers who will be affected by any amendments also be consulted by the government. A referendum is always a good way of getting the people's views - the 12 million worker's view.

KONGRES KESATUAN SEKERJA MALAYSIA

REVIEW OF LABOUR LEGISLATIONS BY THE MINISTRY OF HUMAN RESOURCES

PROPOSED AMENDMENTS TO EMPLOYMENT ACT 1955, INDUSTRIAL RELATIONS ACT 1967, TRADE UNIONS ACT 1959

POSITION PAPER
MTUC

21 APRIL, 2010

A. BACKGROUND

1. We have lagged behind in efforts to move up the value chain. We now have become a country dependent on foreign workers - who remit most of what they earn - losing the country foreign exchange and further weakening domestic demand and consumption. This has put our economy at the mercy of exports and performance of other countries.

2. Our brain drain is getting worrying; our purchasing power parity is weak - car price and petrol prices are amongst the most expensive in the world. We cannot compare prices simply by using the exchange rate. E.g. a Singaporean who earns $1000 only pays $1.28 a litre, while a Malaysian who earns RM800 has to pay RM2.05per litre. Our per capita income has lagged behind.

3. On the other hand, we have seen evidence in the country that where Unions are strong, effective, representative and independent, real wages has increased, and what is more important the industry/enterprise that they exist in, has flourished, where profitability and productivity is amongst the highest.

4. The banking Industry is a good example. With high rate of unionization all employees including executives are covered by collective agreement and the productivity and profits are amongst the highest. Banks in Malaysian lead in terms of technological advances, investment and human resources development.

5. The banking industry has shown that by investing in technology and more important in effective human resources, we do not need any foreign workers in what was once a very labour intensive industry.

6. It can be seen that presence of strong and effective unions is a prerequisite to a high-income nation.

7.Malaysian banks can now compete successfully with foreign banks and have also expanded regionally.

8. This is inline with the New Economic Model as announced by the government recently.

9. There is no point to spend billions to produce graduates and professors if employers continue to suppress wages that our best brains migrate to other countries.

10. We call on the government to once and for all banish the antiquated policy to keep wages low by stiffing the trade union movement and give in to the fancies of those employers who only know how to lobby for more foreign workers but do not spend anything on research and development.

B WHAT THE REVIEW SHOULD FOCUS ON

To achieve that aspiration of the NEM, any review of the labour laws must be geared towards
* Enhance Trade Union rights and collective Bargaining
* Building strong independent workers and employers organization with technical capacity and knowledge for effective participation in the social dialogue process.

C THE CURRENT SITUATION

Horizontal Segregation of Trade Unions
1. Under the Trade Unions Act (TUA), unions are segregated by regions,and by trade, establishments, occupation or industry and even split amongst Pen Malaysia, Sabah & Sarawak. The relevant part of section 2 reads as follows:

“trade union” or “union” means any association or combination of workmen or employers, being workmen whose place of work is in West Malaysia, Sabah or Sarawak, as the case may be, or employers employing workmen in West Malaysia, Sabah or Sarawak, as the case may be.(a) within any particular establishment, trade, occupation or industry or within any similar trades, occupations or industries;

2. Under section 2 of the Act, a trade union can have its members who are from similar industries. The Act does not demand that the workmen must be from the same industry. However the DGTU usually adapt a very narrow and strict interpretation. This has resulted in multiplicity of trade unions – ie 600 unions representing just a little over 800,000 workers.

Vertical Separation
3. Apart from horizontal segregation, the law also imposes segregation by job positions.

4. TUA used to allow executives to be members of the union even though under section 9 of the Industrial Relations Act they may not be included for the purposes of the Collective Bargaining. Section 9 states as follows:
No trade union of workmen the majority if whose membership consists or workmen who are not employed in any of the following categories:Managerial, executive, security and confidential, may seek recognition or serve an invitation under s 13 in respect of these workmen

5. This already made workmen employed in these categories reluctant to join unions as they will not be entitled to the benefits of a CA. They can still be members and hold post in these unions. The latest amendments to S5 (2) (b) - Executive & Security Categories to the law now prohibit them from even being members.

6. The amendments to exclude those in executive categories to be members or officers of a trade union that caters for other workers is certainly regressive and is a further restriction to the progress and development of trade unions. It will further limit much needed competent and knowledgeable employees in managing trades in a professional way.

7. Further there is no clear definition of executives which has resulted in employers abusing the situation where executives are paid no higher than unionized employees and who do not have executive powers the Minister has regarded as executives for example Junior Bank officers.

Recognition

8. Disputes arising out of recognition claims used to be under the ambit of the Industrial Court prior to 1971. The power to decide was transferred to the Minister, with the hope to offer quick solutions to what should be simple recognition issues, and to avoid lengthy court proceedings. Unfortunately the end result is an equally
frustrating recognition process and has not stopped parties going to the courts through certiorari (usually employers who has the financial clout to challenge any
decisions).

Arbitrary powers of DGTU

9. There is little doubt that the Trade Unions Act bestows the DGTU with wide powers over the registration de registration and function of trade unions. He has general powers to exercise all powers, discharge all duties and perform all tasks as may be necessary f or the purposes of giving effect and carrying out the provisions of the Act.

10. Generally he has exercised his wide powers to the detriment of the trade union movement as can be seen below;

TRADE UNION DENSITY
11. As we can see trade union density in the private sector is very poor. It must be noted as well that not all unions in the private sector have obtained recognition and even for those with recognition, not all have collective agreements.

Malaysian Trade Union Membership & Density - 2007

	No. of Unions	Membership	Average Members	Workforce	Density %
Private	407	431,207	1059	11,544,000	3.74
Public/Statutory Bodies	222	371,132	1672	1,200,000	30.93
Total	629	802,339	1276	12,744,000	6.30

Malaysian Trade Union Membership & Density - 1992

	No. of Unions	Membership	Average Members	Workforce	Density %
Private	258	384,970	1492	6,900,000	5.58
Public/Statutory Bodies	176	306,719	1743	850,000	36.08
Total	434	691,689	1594	7,750,000	8.93

TRADE UNION MEMBERSHIP & DENSITY

12. Total number of workers covered by new collective Agreement over a 3-year period 2005, 06 & 07 is only 254,209.00 (MOHR Figures). CA covers a 3 year period so the figure will be representative of the number of workers covered by a current up to date CA in the Country. This shows that only 2.11% of workers in the country are covered by a CA.

13. Between 1992 and 2007 there is a huge increase (58%) in the number of trade unions from 258 to 407 but the actual membership increased by only 12%. Average membership declined by 40% from 1492 to 1059 15 years ago. And all this happened during the years where the workforce actually increased by 67% .

14. There are less than 10 unions with more than 10,000 members and majority have less than 500 members. Quite a lot of Unions have less than 50 members. Under such a situation can we ever hope for strong effective and viable unions?

Financial
15. With membership fees averaging RM5.00 a month, it is difficult for Unions to survive, much less be able to invest in training, research and to employ competent and professionals to manage the unions.

16. To compound matters, check off is not a trade dispute since 1984 (non metallic case) and it is now at the mercy of employers who will usually use it to impose a CA on the union.

Previous Amendments
17. The Second Schedule only take into account the interest of employers only and discriminates against employees especially those earning low wages.

I. Apart from limiting backwages to 24 months, the courts are now mandated to take into account post termination gainful employment and contributory conduct.

II. However, the amendments did not mandate the court to impose punitive damages in cases where in all fairness there must be another provision for the court to take into account the pain and suffering of the poor worker when he was dismissed. Nor are there provisions for punitive damages where employers acted wantonly in dismissing their employees.

III. Now all an employer has to do is to pay a maximum of 24 x $500 = $12,000 to get rid of workers whose only misconduct may be to promote or participate in a trade union in the workplace. See Trienekens case.

IV. As the poor worker has to earn a living while waiting for up to 7 years for his case in the industrial court he may end up with nothing! He also cannot claim cost. This is surely not conducive to industrial harmony.

V. To punish the poor worker because the Ministry takes more than 1 year to refer dispute to the court and for court to take years to resolve the case is beyond decent work, it is just indecent.

VI. Damages and remedy must be left to the discretion of the courts. Just because of one or two cases of highly paid directors/general managers being awarded huge sum by the industrial court does not justify the law to be amended to discriminate against poor workers.

VII. To limit to one year for probationers please note that probationers could have left secure jobs to take up new employment on probations. The amendments are contrary to the government aim to create a highly mobile and productive workforce and to encourage employability instead of job security- people are now reluctant to change jobs. Please note that probationers could have left secure jobs to take up new employment on probations.

MTUC’s Proposal dated 1st March 2010

1. In response to the Ministry’s request, on 1st March 2010 MTUC submitted the following proposal:

D. INDUSTRIAL RELATIONS ACT 1967

Malaysian Trades Union Congress hereby propose that the Industrial Relations Act 1967 be amended as follows:-

1. Section 8 – Reference of complaint to Industrial Court

1.1 Enforcement of the provisions of Section 4 Rights of workmen and employers and section 5 Prohibition on employers in respect of certain act remains most unsatisfactory and inefficient. Complaints of breach of section 4 and 5 are rarely referred to the Industrial Court.

1.2 Therefore we propose that Section 8 clause (2) be amended to require the Director General to refer the complaint to the Industrial Court within 90 days.

2. Section 9 - Recognition And Scope of Representation of Trade Unions

2.1 We propose that clause 1 (C) be amended to require the Director General to refer any dispute relating to scope of membership to the Industrial Court within 90 days. Stipulating a time limit will remove the inefficient and unsatisfactory procedure currently practiced.

2.2 Clause (4) – be amended to increase the 14 days to 21 days for the union to report the matter to the Director General for Industrial Relations.

2.3 Clause (5) Currently it takes 12 months to 36 months to resolve a recognition
claim. Therefore we propose that a 90 days time limit be stipulated.

2.4 It is not always practical to conduct a secret ballot to ascertain the representative status of the union claiming recognition: Therefore the provisions be amended to enable the DGIR to determine based on practicality:
- whether to conduct a secret ballot or
- carry out membership verification

2.5 Where secret ballot is conducted the status shall be determined by the
number of votes cast. Under the present system, voting take place 12 months to 36 months after the date of claim for recognition during which a substantial number leave employment. In order to upset the balloting and evade recognition, employers can terminate and repartriate most of their foreign workers. Current procedure is designed to deny union recognition and collective bargaining.

2.6 The question posed on the ballot paper should be DO YOU WANT TO BE REPRESENTED BY UNION?

2.7 Where balloting is conducted and union’s majority representative status is confirmed, recognition shall be deemed accorded.

3. Part IV – Collective Bargaining and collective agreements

3.1 In order to ensure sanctity of collective agreement, clause (2A) Sub clause (b) should be deleted.

3.2 To give effect to the voluntary system of Industrial Relations, we propose that the entire limitation on the scope of collective agreement under 13 (3) (a) to (f) be deleted.

3.3 The definition of collective agreement be extended to include provisions for deduction of union dues from salary.

3.4 Section 18 Reference of disputes for conciliation. Clause (5) be amended to require the DGIR to refer the dispute to the Industrial Court within 90 days.

4. Section 20 Representations on Dismissals

4.1 Section 20 (2)

Under the current procedure it takes the DGIR and the Minister as long as 24 months to 36 months to refer a complaint of unfair dismissal to the Industrial Court. Therefore we propose that clause (2) be amended to require the DGIR to refer the complaint to the Industrial Court within 90 days.

4.1 Clause (9)
The 2008 amendment is unfair and completely one sided. If it is the intention of the Government to find a speedy solution then a clause should be inserted to state that where an employer attends none of the conferences under paragraph (8) (b) without any reasonable excuse, the employer shall be deemed to have withdrawn the dismissal.

5. Section 22 – Constitution of the Court
Clause 5 be amended to require a panel.

6. Second schedule

We propose that the entire second schedule be removed. The limitations and restrictions severely interferes with the independence of the court and department of Industrial Relations and the Minister will be encouraged to perpetuate their inefficient procedures which causes inordinate delays.

7. Section 30 Awards
We propose that the mandatory 6 months limitation imposed on the court on retrospective effect of a collective agreement be removed. With such limitation the Minister can unreasonably delay reference of disputes to the Industrial Court.

8. Section 56 Non compliance with Award or Collective Agreement
Section 56 should be amended to empower the Industrial Court to enforce their award. The current provisions requiring the workman to go to the High Court to enforce an award is time consuming and
extremely expensive.

9. Employment Appellate Tribunal
We propose that serious efforts be made to establish and Employment Appellate Tribunal within the Industrial Court.

E. TRADE UNIONS ACT 1959
1. Numerous restrictions and provisions under the Trade Union Act 1959 curtailing freedom of association is contrary to the provisions of Article 10 of the FEDERAL CONSTITUTION.

2. We acknowledge that under the provisions of article 10 (2) Parliament may by law impose on the right conferred by paragraph (c) of Clause (1), such restrictions as it deems necessary or expedient in the interest of the security of the Federation or any part thereof, public order or morality.

3. We concede that at the time when the Trade Unions Act 1959 was formulated, Federation of Malaya was facing communist insurgency and the Government, in the interest of security wanted to closely monitor all mass based organizations such as trade unions. The situation has completely changed for the better in the last fifty years.

4. The Trade Unions Act severely restrict trade unions right to organize and as a result, hundreds of thousands of workers are denied the right to collective bargaining. The Act permit the Director General of Trade Unions to capriciously decide on the unions’ scope of membership.

5. The controversial enforcement of the provisions of Section 26 (1A), especially in the last two years, has created serious apprehension that this provision will be extensively used by anti union employers to unfairly victimize and even get rid of union activists with impunity. Denial of right of a dismissed worker to remain as a member of the union whilst his unlawful dismissal is being pursued has nothing to do with the security of the nation.

6. We therefore propose that the Trade Unions Act 1959 be revamped in compliance with the provisions of Article 10 of the Federal Constitution ensuring that: -
* Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to join organizations of their own choosing without previous authorization.
* Workers’ and employers’ organizations shall have the right to draw up their constitutions and rules, to elect their representatives in full freedom, to organize their administration and activities and to formulate their programmes.
* The public authorities shall refrain from any interference which would restrict this right or impede the lawful exercise thereof.
* Workers’ and employers’ organizations shall not be liable to be dissolved or suspended by administrative authority.

F. EMPLOYMENT ACT 1955

Malaysian Trades Union Congress hereby propose that the following provisions of the Employment Act 1955 amended:-

1. Scope of coverage
The legal safeguards and the minimum standards should be applicable to all employees including domestic workers whose wages do not exceed five thousand ringgit a month.

Based on the Prime Minister’s 1 Malaysia concept the minimum standards and safeguards should be extended to all employees including employees in Sabah and Sarawak.

2. Part III – Payment of wages
We propose that Section 18 be amended to provide for a RM900 minimum monthly salary for all employees within the scope of the Employment Act. The quantum shall be increased periodically based on consumer price index.

3. Section 60 D Holidays
Every employee should be entitled to a paid holiday on all gazetted public holidays by the Federal Government and the state. There is no justification for the government to continue the discriminatory practice against employees in the private sector. All employees in the private sector as well have the right to celebrate their
festivals and national events of significance.

4. Section 60E Annual Leave
The minimum number of annual leave entitlement should be raised to 12 days.

5. Section 60F Sick Leave

Although a vast majority of the employers do provide medical attention and medicine at their expense some employers argue that based on the provisions of section 60F(1) they are required to pay for cost of examination only. The Labour Department has confirmed that indeed employers are not required to pay for the cost of medicine. Government is fully aware that in our country all medical practitioners provide examination and treatment and charge the person accordingly.

Therefore Section 60F(1) should be amended that employer pay for medical examination and treatment.

6. Section 31 Priority of Wages over other debts

The provisions of section 31 should be amended and appropriately worded to ensure that:-
* Wages contractual bonus, retrenchment benefits, termination and lay off benefits and all statutory contributions are accorded priority over all other debts.

The amendment should categorically remove any conflict with the provisions of the companies act. We wish to draw the attention of the Ministry that more than
10,000 workers were deprived of the entitlement under the termination and lay of regulations.

7. Section 37 Maternity Protection
Length of paid maternity leave should be raised to 90 days.

8. Termination Benefit
Termination benefit for employees who are terminated in accordance with the Employment (Termination and Lay-Off Benefits) Regulations 1980 should increased to one month’s salary based on the last drawn salary for every year of service.

9. Retirement Age
In the absence of specific provisions under the Employment Act most employers in the private sector arbitrarily set retirement age at 55 years for male and 50 years for female employees.

In view of the significant increase in the life expectory age, government should set a retirement age of 60 years for all employees.Government has repeatedly stated that employees who are dependant on their savings with the EPF have nothing left after the fourth or fifth year of retirement. By raising the retirement age employees will be able to save more through contributions to the EPF and the length of dependency period will be shortened.

G. LACK OF RESPONSE FROM THE MINISTRY

1. The Ministry did not hold any meeting with MTUC to discuss the above proposal.

2. The National Labour Advisory Council (NLAC) established in accordance with the principles of tripartism has been completely sidelined in dealing with this very important topic which has far reaching implications on the ten million working people in the country.

3. On Friday 9th April, 2010 MTUC together with two other trade union organizations were invited to attend a meeting chaired by the Secretary General of the Human Resources Ministry.

4. During the 90 minutes meeting, Ministry officials presented an outline of the amendments to the Employment Act 1955, Industrial Relations Act 1967 and Trade Unions Act 1959.

5. We need to stress that the presentation concentrated on the concept of the amendments and NOT the actual amendments. In the absence of the actual wording of the amendments, our understanding on the full implication of the amendments were severely restricted: Therefore our comments and response have to qualified.

6. During the said meeting, Ministry officials did not respond or give any explanation on the status of MTUC’s proposal submitted on 1st March 2010. We still maintain our proposal and seek an urgent meeting with the Ministry so that we can justify our proposal.

7. MTUC’s comments and response to Ministry’s proposal

7. 1 Definition of employees under EA - employees whose wages do not exceed RM2000 irrespective of their occupations;

MTUC’s comments

Scope of coverage
The legal safeguards and the minimum standards should be applicable to all employees including domestic workers whose wages do not exceed five thousand ringgit a month. Based on the Prime Minister’s 1 Malaysia concept the minimum standards and safeguards should be extended to all employees including employees in Sabah and Sarawak.

7. 2 Better protection for employees such as domestic servants by having specific regulations;

As stated under para 8.1 hereabove domestic workers should be entitled to all the minimum standards. We should stop using the term “servants”. To avoid any confusion they can be referred to as “Home Workers”.


7.3 Priority of wages and termination benefits over other Debts
(Section 31 of EA) for employees who are the most Vulnerable of the parties during closing of business and/or termination due to redundancy (this matter would be discussed with SSM and KPDNKK)

Wages, contractual bonus, retrenchment benefits, termination and lay off benefits and all statutory contributions are accorded priority over all other debts. The amendment should categorically remove any conflict with the provisions of the companies act.

7. 4 Contract of Service in writing with salient employment matters such as salary, working hours, probation period, retirement age, termination benefit and minimum benefits as provided in EA;

We agree in principle but we need to see the actual working.

7.5 Maternity protection

Ministry’s proposal is vogue we propose that Section 37 be amended to extend paid maternity leave to 90 days.

7.6 Employees with less than one year of service (probationers) are excluded from seeking reinstatement via Section 20 of IRA;
Employees earning a basic salary of RM10,000 or more are excluded from seeking reinstatement via Section 20 of IRA;
Employees with fixed term contract are excluded from seeking reinstatement via Section 20 of IRA if termination is as per contract terms.

The above proposal’s are most retrogressive and are clearly in contradiction with the decisions of the Industrial Court and landmark judgements of our courts.Most of the collective agreements stipulate initial probationery period of 3 months which can be extended to another 3 months. Currently even probationers have the right to seek redress if their termination is wrongful. Ministry’s proposal to deny those earning RM10,000 or more, the right to challenge unfair dismissals is unacceptable. Many of our affiliates who represent executive staffs have salary scales exceeding RM10,000. We do not see any justification for the Ministry to subject this category of employees to be vulnerable to the whims and fancies of their employers.

Ministry should carefully study all the awards handed down in the past 24 months to get a better understanding of the arbitrary attitude of bosses in the private sector.
Ministry’s proposal to deny access to justice to workers with fixed term contract will encourage employers to adopt such contracts so that they can be terminated with impunity.

We find rather shocking that government officers who are guaranteed of a lifetime employment have drafted such inconsiderate proposal.

7. 7 Mandatory conciliation at Industrial Relations Department for dismissal cases;
We cannot understand the purpose of this amendment. Parties attending the conciliation may disagree with conciliation officials but a overwhelming majority attend the proceedings. By inserting such a provision,is the ministry proposing to impose penalty on those who fail to attend conciliation proceedings? Otherwise the said clause will serve no purpose.

To effectively strengthen the conciliation process we propose the following:
* If a workman or trade union fail to attend conciliation proceedings, their report will be deemed as withdrawn.
* If an employer fail to attend conciliation proceedings, the complain would be referred to the Industrial Court.

7.8 Dismissal cases would not be referred to Industrial Court under certain circumstances such as:-
Employee has accepted mutual separation package;
Expiry of fixed term contract;
Termination of employee beyond the mandatory retirement age of the company;
Employee refusing reinstatement; and
Cases of amicable settlement and employee has accepted settlement.

We do not see any necessity for the above.

7.9 To enable Industrial Court to strike out frivolous or vexatious cases.

This proposal suggests that the Industrial Relations officers, Director General of Industrial Relations and the Human Resources Minister who referred the dispute to the Industrial Court after 12 to 24 months study were inefficient and incapable.

7.10 To amend Section 12 of EA for the notice period of termination of contract for employees be standardized to 4 weeks irrespective of the years of service; and Ministry officers must be mindful that in the private sector workers do not have any job security: Even workers who have continuously served the company for as long as 20 years, can be terminated on grounds of redundancy, reorganization and restructuring. Section 12 was intentionally amended to ensure that workers with long service are given longer notice of termination – What is the need for such retrogressive amendment?

7.11 For any disputes relating to claims and other matters that has been reported under the provision of IRA, to have a standard operating procedure for DGIR where settlement reached at conciliation be spelled out in detail.

We need to see the actual wording of this clause before we can comment on the proposal.

7. 12 Section 17A/Section 19/Section 22/Section 25A/Section 34/Section 60A and 60C

We strongly object to the proposed amendments. The supervisory role of the Director General of Jabatan Tenaga Kerja must be maintained. Our experience shows that such important issues cannot be left in the hands of the employers to adopt self regulation.

For example:
We have employers in our midst who require female employees to report for work at 4.30 am. We have employers who end night work at 2.30am without any consideration for the female workers’ safety traveling at such odd hours of the night.

The amendment to Section 19 to allow employers to delay payment for overtime work for as long as 30days is unnecessary and unacceptable. With all the technological advancement employers can easily comply with current requirement.

Section 25A . The current provisions requiring employers to acquire consent of workers to change the mode of payment of salaries is still very much relevant. The plantation workers throughout the country are paid in cash. As many plantations are located far from banks it is not practical to pay wages through banks.

Section 60A. The proposed amendment is completely one sided and the convenience of workers have been completely ignored. This provisions can empower employers to set unreasonable working time requiring employees to start work at 5.00am when there is no public transport available.

The proposal to compel workers to take annual leave without any consideration of the employees’ needs goes against decided principles Ministry must be mindful that workers’ entitlement under the Act is as low as 8 days – 40% of this would be 3.2 days leaving the workers with only 5 days for the whole year. Furthermore the EA guarantees only 10 paid public holidays.

New Provisions
7.13 To provide provisions on sexual harassment in the Employment Act (coverage is for all employees irrespective of their wages or occupations);
We welcome any effort by the Ministry to eliminate sexual harassment in the workplace. We need to see the actual wordings of the Section before we can give our endorsement.

7.14 To allow for direct appeal to High Court pursuant to Industrial Court Award on dismissals by way of rehearing instead of judicial review currently.

We do not believe that this provision will help to shorten the duration. Furthermore this would give unfair advantage to the employers because with their financial resources almost all cases will end up at the High Court.

Unions and individual workers with limited resources cannot afford to engage lawyers to represent them at proceedings before the high court.

We believe that this amendment is intended to accord unfair advantage to employers.

7.15 Payment of wages in legal tender through banks that requires employee consent (Section 25); Restriction on places at which wages are paid (Section 28); Prohibition of female employees working beyond 10pm (Section 34);The need to keep a ‘hard copy’ of employee register by the employers is reviewed so as to allow for soft copies (Sections 44 and 61)

The above provisions are still very much relevant and for the reasons we have stated under para 8.12 hereabove the safeguards must be maintained.

Clarification of ambiguous provisions and Introduction of New Provisions

7.16 Definition of manual worker in the EA;
Definition of managers and executives in IRA;

We request the Ministry for the actual wording before we can give our comment.

7.17 The need to review on the status of union which has been given recognition.(Power given to DGIR to review upon request after a minimum period of five years)

The proposed amendment will enable employers to perpetually deny workers collective bargaining rights. Since union recognition is a pre-requisite to commence collective bargaining this amendment will encourage employers to challenge Minister’s decision to accord recognition.

In the past five years a significant number of employers have challenged Minister’s decision to accord recognition. Pending a decision on their appeal at High Court and Court of Appeal which takes about five to ten years the employer need not commence negotiations.

During the five to ten year waiting period union members leave employment or relinquish their membership out of frustration over the union’s inability to negotiate on better wages and conditions.

And finally when the courts uphold the decision of the Minister to accord recognition, with the proposed amendment, the employer can immediately mount a challenge to question the representative status of the union. When the DGIR and the Ministry go through the process and make a new decision, companies who are anti union can proceed to the High Court to challenge the new decision.

Secondly, the Ministry must be mindful that even under the present conditions, the Department of Industrial Relations takes as long as 24 months to 36 months to resolve recognition claims. With the proposed amendments the situation will worsen further.

7. 18 To allow HR specialists/consultants to represent parties at the conciliation proceedings and hearing in the Industrial Court.

We cannot understand the purpose of this proposal. Is this intended to help retired Ministry officials or close friends of Ministry officials who have set up HR Consultancy business?

MTUC and MEF as organization of trade unions and employers are signatories to the Code of Conduct for Industrial Harmony. And both organizations have signified their commitment to promote and maintain industrial harmony in the country.

Both organizations represent the interest of their respective group in the National Labour Advisory Council. By virtue of their partnership role, both MTUC and MEF are obliged to play a constructive role in finding amicable solution to industrial disputes.

We know of HR Consultants who deliberately create disputes in order to make a living. We attach herewith a copy of the letter addressed to the company in Penang by an HR consultant.

We wish to highlight the following from the HR Consultants letter:
* The DGIR and DGTU after months of work advised the company to accord recognition;
* The HR consultant advise the Company to challenge the DGIR and if the DGIR fail to concede then they should appeal to the HR Minister;
* If the Minister decides to accord recognition then the Company should file an application at the High Court to challenge the Minister’s decision’s;
* The consultant claims that he was an official of the Ministry of Human Resources and has close contact with senior officials of the Ministry.
* By stating that, he is giving the impression to the employer that Ministry officials are under his influence.
* He names a list of companies where had successfully removed the union;
* He stipulates his fees for his services to successfully remove the union;
* The company accepted the HR consultants offer and advise and appointed him;
* As advised by the consultant the company challenged the Minister decision to accord recognition. After a long delay of six years, in 2009, the High Court upheld the decision of the Minister.
* This is a clear case to show that the consultant is thriving by creating disputes and industrial disharmony.
* This matter was brought to the attention of the Secretary General of the Human Resources Ministry on 28 July 2003, KSU’s reply to MTUC was “we have no control over the conduct of consultants but you can be assured that such persons will not be permitted to appear at proceedings at any department under the HR Ministry”.

7.19 To have provision in the Act for trade unions to inform DGTU when it forms or closes branches; To have provisions requiring trade unions to have their annual
general meeting on a timely basis; To have extra qualifications for a worker to become union officer;

There are adequate provisions under the Rules and Constitution of every union to cover all aspects mentioned hereabove: Therefore we are of the view that there is no necessity for the amendments.

7.20 To amend provisions relating to membership of public officers in trade unions as may be determined by KSN;

Section 27 of the Trade Union Act elaborately covers all aspects relating to membership of Public Officers and employees of statutory authorities. The proposed amendment to empower the KSN can lead to arbitrary and ad-hoc decisions.

7.21 To have provision to resolve trade unions in ternal disputes at Trade Union Department;

Current provisions to resolve trade unions internal dispute are adequate. There is no need for amendments to empower the Trade Union Department to intervene.

7.22 To restrict trade unions from using their funds for risky investment.

Most unions do not have sufficient funds to manage their administration costs. Under Section 19 of the Trade Unions Act unions are required to obtain prior written approval of the Minister to invest. Therefore the proposed amendment is redundant.