Press statement by the Labour Law Reform Coalition on 30 April 2023 in Petaling Jaya
Amid the global economic uncertainty, the risk of higher inflation and geopolitical conflicts, the Bank Negara Malaysia has estimated the economic growth of Malaysia to be 4% to 5%, a sharp contrast with the 8.7% GDP growth in 2022. (BNM 2022 Annual Report)
The economic situation is a serious concern because many workers fell into poverty and survived on debt during the Covid-19 pandemic.
The skyrocketing cost of living after the Ukraine war and the weakening of Ringgit has aggravated the situation. BNM estimated that a 5% change in RM/USD is associated with 0.2% change in core inflation over a year.
Since Bottom 40 households spend 35% of the expenditure on food, the 6.1% increase of the food category of the Consumer Price Index in June 2022 has put enormous economic pressure on low wage earners.
To address these economic challenge and improve the living conditions of workers in Malaysia, the Labour Law Reform Coalition, consisting of 58 trade unions and NGOs, urges the government to accept the 10 workers’ demands in conjunction with the 2023 May day :
- Ensure employers to fully comply with the minimum wage of RM1,500, and provide at least 25% salary increment to workers who served companies for a long time but did not benefit from the minimum wage system since its implementation in 2012.
According to Khazanah Research Institute’s (KRI) working paper titled The Returns to Malaysian Labour Part I : Wage Growth and Inequality from 1995 to 2019, the minimum wage has greatly benefited the low wage earners and caused them to catch up to middle wage earners. However, the impact of minimum wage weakened when the wage scale moves toward median wage. The prominent think tank suggests that it is a phenomenon of “squeezed middle”.
LLRC received complaints from trade unions that thousand workers in manufacturing sectors, after working with companies for 20-30 years with starting wage RM400-500 per month, their current wage is merely RM20 to RM50 higher than the statutory minimum wage RM1,500, which is absolutely unfair because they have 15-20 working experience than the newcomers. The government should seriously look into this issue.
2. Set up a Royal Commission of Inquiry to investigate corruption in the migrant worker management system, including companies involved in the Foreign Workers Centralised Management System, related service providers and foreign recruitment agencies.
The investigation of the Malaysian Anti-Corruption Commission (MACC) against the officers of the Minister of Human Resources is alarming. We need to adopt a holistic approach to address the corruption in the system, no one should treat migrant workers as commodities and make profit out of it.
3. Set up reskilling centres to prepare for industry transformation. The reskilling centre can help workers laid off by companies to gain new skills and search for new jobs. Companies that announced redundancy are duty-bound to use its HRDF fund to provide reskilling for laid-off workers.
Reskilling of the workforce is one of the policy priorities for key structural reforms identified by the Bank Negara Malaysia. The government should get ready skilled workforce to enhance the competitiveness of the Malaysian economy and facilitate smooth transition to high income country.
4. Pass the amendments to the Trade Union Act, Sabah Labour Ordinance and Sarawak Labour Ordinance in the next parliament session. Repeal the proposed 4th schedule of the Trade Union (Amendment) Bill and related clauses that intimidate trade unions.
5. Ratify ILO Convention 87 on Freedom of Association, Convention 189 on Domestic Workers and Convention 190 on Violence and Harassment. Fully enforce the ILO Convention on Collective Bargaining.
6. Revamp trade unions’ claim for recognition procedure, if the turn-out rate of secret ballot exercise is less than 50%, the secret ballot process shall be restarted within two weeks. Trade unions receiving more than 25% votes shall be accorded recognition.
7. Comply with the ruling of the ILO Committee on Freedom of Association in March 2023 (Case No. 3414 Sabah Timber Industry Employees Union against Sabah Forestry Industries) that necessary legislative amendments must be done to ensure managerial and supervisory staff is limited to those persons who genuinely represent the interests of employers, including those who have the authority to appoint or dismiss workers.
The endless judicial challenges and administrative proceedings that lasted for 13 years have denied STIEU’s right to collective bargaining.
8. Revive the previous sectoral practice of the National Labour Advisory Council (NLAC), encouraging trade unions, employers and governments to hold regular social dialogues on issues relating to each sector.
9. Urge the Minister of Human Resources to provide exemption and allow migrant domestic workers to set up a sector-wide trade union and hold union office. Given their vulnerable situation, union closed shop arrangements should be stated in the MOUs between Malaysia and the country of origin.
10. Hold regular meetings with trade unions and migrant worker organisations on the implementation of the National Action Plan on Forced Labour, involve sectoral trade unions and migrant worker organisations in the efforts of eliminating forced labour.
N. Gopal Kishnam & Irene Xavier
Labour Law Reform Coalition