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Thread: The circus around the minimum wage act

  1. #1
    Join Date
    Oct 2008

    The circus around the minimum wage act

    If we understand the Rat Race, we will realize that suppresion of worker wages is a strategic procedure that will lead to finalization of the SUA.

    «›PSM-JERIT Press Statement :

    Reply to all |parti sosialis malaysia PSM
    show details 16:09 (47 minutes ago)


    19 AUGUST 2010



    1. Parti Sosialis Malaysia and JERIT is not amused by the continuous flip-flop and gymnastics surrounding the Minimum Wage Act and also not amused on the proposed amendments to the Labour Laws.2. Over the years the Government has consistently implement anti-labour laws / pro capitalist laws. It is common knowledge that previous Trade Unions laws, Industrial Relations Acts were specifically designed to help the foreign companies investing in Malaysia.
    3. The stark reality is that the Ruling Government’s is not interested in implementing the – Retrenchment fund , Minimum wage Act, Automatic registration of Trade Unions and Priority of Wages & Termination benefits over other Debts (to over ride Companies Act)
    4. What the ruling Government does is to curb workers rights and union rights, in perpetuity. Today this Government unabashedly continues to propose new amendments to please the FDI and perpetuate the Neo-liberal regimes.

    The Failure of the Market PSM is pleased to hear that the Minister has finally realized the failure of the market forces. PSM had over the years cautioned and condemned the Government for relying on market forces to determine the well being of the workers who happen to be the greater majority of the people.We have all the while called for State Intervention in resolving the woes of the workers. The Government who until now have been telling the world that it cannot implement Minimum Wage Act because of their strong adherence to the Market Philosophy as duly noted by the former Human Resources Minister Datuk Wira Dr Fong Chan Onn – ‘ The government will not adopt the minimum wage policy but instead allow market forces determine the salary level. "That was the government's basic philosophy.’
    Now the government has to eat its own words as the current Human Resources Minister Dr S Subramaniam said that the National Employment Return study in 2009 stressed on the need for wages to be increased, especially after the ministry discovered that it was difficult to rely on market forces alone.

    Failure of Human Resource Minister
    Although Datuk Subramaniam, Human Resource Minister has recognized the low wages earned by workers and the importance of minimum wage, he is not taking any concrete efforts to address the matter. It has been two years and yet the Human Resource Minister fails to bring any positive changes for the betterment of the workers. For example, the withdrawal of implementing minimum wage for security guards which should have implemented on 1st July 2010. Recently, the Minister was also pessimistic on the Indonesian Government proposal to introduce minimum wage of RM600 for maids. The Ministry is also seemed to be lacking in seriousness when they conducted a survey on minimum wage through the Ministry’s blogspot. The Deputy Human Resource Minister announced in Parliament that minimum wage can’t be implemented due to poor response by the workers.

    When we met the Minister on 1st July this year, the Minister kept mentioning that the Government has to safeguard the interest of the investors. As such it is difficult to implement minimum wage. It shows that the Minister has failed to exercise his political will to safeguard the interest of the workers. Now the Minister talks about more time to study the proposals.

    Income Disparity – Rich and the poor
    A study by the Human Resources Ministry on wages in the country revealed that almost 34 percent or about 1.3 million workers earned less than RM700 a month, levels below the poverty line of RM720 per month. The Minister also cited the World Bank study which discovered that the wage trend in Malaysia had only recorded a 2.6 percent growth annually during the past 10 years compared with the increasing cost of living during the same period.

    The richest 10 percent in Malaysia controls 38.4 % country’s economic whilst the poorest 10 percent control 1.7 percent. These alarming statistics demand that the Government take drastic actions to narrow down the gap between the rich and the poor. One way is to introduce the Minimum Wage Act or by subsidizing the lower income group.

    But right now the modus operandi of the Government of the day is;

    i) To implement GST (Goods and Services Tax)– burdening further the poor who will have to pay higher taxes while the rich will be given a further deductions of their income and corporate taxes. The fact that only 15% of population is paying income tax, reflects that majority of Malaysian are in the low income category.
    ii) The relegation of the private sector as the engine of growth in the Tenth Malaysia Plan. Thus lessening the Government’s role and enlarging the role of private sectors. This move will definitely lead to more neo-liberal policies to the detriment of the poor.
    iii) The reduction and lowering of subsidy – will result in the relative and absolute escalation of prices with the drop of purchasing power. Subsequently, the fall or crashing of standard of living. The total Government expenditure of subsidy is RM 158 billion yearly in which RM 74 billion is subsidy enjoyed by all people whereby RM 84 billion is subsidy meant for the corporate rich and businesses. The current Government subsidy cuts are targeted at the RM 74 billion which are enjoyed by all. But the subsidy for the rich remain unchanged. Thus blatantly helping the rich but not the poor.
    iv) Increasing the FDI (Foreign Direct Investment). Which virtually regulates of our market; depressing wages and the tighter labour control / laws to beef up the FDIs

    It’s the corporate agenda that is driving these amendments, not the needs or welfare of workers.

    Following are the proposed amendments:

    Proposal for the Amendments To The Labour Laws
    The new amendment includes the following labour laws:
    • i) Employment Act 1955 / Akta Kerja 1955
    • ii) Industrial Relations Act 1967 / Akta Perhubungan Perusahaan 1967
    • iii) Trade Unions Act 1959 / Akta Kesatuan Sekerja 1959

    1. Employment Act Amendments

    This has been tabled for first sitting without the support of labour groups such as MTUC and JERIT. Overall the amendment focus upon the increase in “labour flexibility” and to better define “sexual harassment” in the work-place.
    Labour Flexibility
    As for labour flexibility, the biggest ploy will be the issue of the contractualisation of labour.

    The proposed amendment recognizes a new category of contractor – that is, the Contractor of Labour, whose job is merely to supply labour. Previously, “contractor” is also part and parcel of the work of the principal.

    Now this amendment recognizes the Contractor of Labour as the “Employer”rather than subservient or responsible to the principal. These changes will surely make it easier to summarily lay off workers. In short the Principal can escape from paying benefits because these wage earners are not his workers. Also if EPF and SOCSO are not paid properly, the contractor can say that he is not the actual employer – that he is not responsible. In summary, the workers are short changed in this “catch-22” drama.

    Section 12 – Notice of Termination of Contract
    To standardize the notice period for the termination of contract for employees to 4 weeks irrespective of the years of service. With this amendment, long serving workers get much lesser time to prepare for termination and hence will be compensated less.

    Section 19 – Time of Payment of Wage
    To allow employers to delay payment of overtime work for as long as 30 days. Currently it must be paid within 7 days. Most Malaysia workers rely on OT to make ends meet. With this amendment, they will be only paid their rightful dues three weeks later

    Below are safeguard provisions which were placed to safeguard workers interest. The Government amendments plans to do away with these safeguard. Among the safeguards are:
    Section 25A – Payment of Wages through Bank

    The current provision requires employers to acquire consent of workers to change the mode of payment of salaries. If the only mode of payment is going to be banks, than it is going to bring further hardship, inconvenience and also further cost to the workers. And in Section 28 – Restriction on places at which wages may be paid, the amendment can mean that the employer can give wages to workers in brothels, pubs and toddy shops.

    Also currently under Section 34 - Prohibition of night work, there is a provision for the DG to allow based case to case. With the removal of these provision, it would mean workers especially female workers can be called in odd hours without much rest to do work.

    Section 44 and Section 61 requires a Register of allowances paid and workers details be kept and this can be checked upon request. Under the new amendment, employer can keep soft copies in computers which can be subject to abuse

    . The provision allows employers to set unreasonable working hours where the employer can set work starting as early as 5am.

    Sexual harassment at the work place
    We welcome this provision as it will address to the problems of sexual harassment in Employment Act. Coverage is for all employees irrespective of their wages or occupations. While the amendment is welcomed, but there is a need to enact a comprehensive laws on sexual harassment because the offence do not occur at work place alone.
    Industrial Relations Act 1967
    The IR Act was amended not too long ago in 2007 (during Dato Fong Chan Onn) which has chiped away some rights of the workers. The table below shows some of the amendments made.

    Previous Amendments
    1. Apart from limiting back wages to 24 months, the courts are now mandated to take into account post termination gainful employment and contributory conduct.
    2. However, the amendments did not mandate the courts 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 workers when dismissed. Nor are there provisions for punitive damages where employers acted wantonly in dismissing workers whose only misconduct may be to promote or participate in a trade union in the workplace.
    3. To limit backwages for probationers to 1 year. Probationers could have left secure jobs to take up new employment (on probation)

    The current Minister is proposing the following amendments which will further deteriorate the rights of workers. The amendments are as follow:
    Section 20 – Representations on dismissals

    • 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 RM 10,000 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.

    This would mean more workers will be excluded protection under Section 20

    Other Amendments
    i. Mandatory conciliation at Industrial Relations Department (IRD) - 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;
    • Where the employee rej
    ects reinstatement;
    Cases of amicable settlement and employee has accepted settlement.

    ii. To allow HR specialist / consultants to represent parties at the conciliation proceedings and hearing in the Industrial Court
    iii. To enable Industrial Court to strike out frivolous or vexatious cases
    iv. To allow for direct appeal to High Court pursuant to Industrial Court Award on dismissals by way of rehearing instead of judicial review currently. This gives unfair advantage to employees given their financial resources. Unions and workers with limited or no resources cannot afford to engage lawyers to represent them at the High Court.

    Besides the amendment to the Employment Act and IRA, there seems to be further plans to curb Trade Union Activities.

    Under Section 5(2)(B) , Executive & Security categories are now prohibited from being members of trade unions besides that there are plans to empower the DGIR to review status of union which has been given recognition. upon request after a minimum period of five years. The proposed amendment will enable employers to perpetually deny workers collective bargaining rights


    1. Immediate steps must be introduced to narrow the gap between the rich and the poor and the need to;

    i. Introduce the Minimum Wage Act
    ii. Reduce subsidies to Industries and Businesses but maintain subsidies for the poor
    iii. Stop all measures to implement the GST and to maintain or increase the corporate tax
    Stop Tabling Anti-labor legislation i. Stop all amendments to Labour laws
    ii. Introduce laws such as Retrenchment fund , Minimum wage Act, Automatic registration of Trade Unions and Priority of Wages &
    Termination benefits over other Debts (to over ride Companies Act)

    3. It is time the Government review its fundamental philosophy. The Tenth Malaysia Plan calls for major role to be played by the Private Sector. It is proven that it is the social and political responsibility of the State to ensure the well being of its workers and the rakyat. We call for Government to safeguard key public sectors such

    i. Public hospitals and health care system
    ii. Free and affordable Public education system
    iii. Affordable and decent homes
    iv. Efficient and cheap public transport
    Released by :
    Parti Sosialis Malaysia & Jaringan Rakyat Tertindas (JERIT)

  2. #2
    Join Date
    Aug 2010
    Kuching, Sarawak

    Re: The circus around the minimum wage act

    It would be my gross understatement that BN has not not kept a sensible balance between Capital and Labour, between short term corporate profits and long term sustainable industrial relations.
    A High Wage economy is but hot-air slogan trying to obscure rising costs of living. It cannot come about if there is no political conviction to legislate minimum wage, even though the starting minimum wage may be set relatively low.

    There are now too many serious problems in public policy, problems of own making, which will plaque the nation trying to move forward. Industrial Relations being just one of the major predicaments.

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