Worker and trade union rights in BN-ruled Malaysia (Part 1)

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In the first of a two-part article, Charles Hector examines how a pro-business government has led to a steady weakening of workers’ rights and their welfare and livelihood.

Photograph: Jerit

Under the rule of the Umno-led coalition, today known as the Barisan Nasional (BN), worker and trade union rights have suffered significantly.

‘Eight hours labour, Eight hours recreation, Eight hours rest’ is a right that many workers in Malaysia have lost. Minimum wages, a norm in most developed and developing countries, is something that is still denied to Malaysian workers.

Existing worker rights in law have been slowly eroded and accesses to justice have not been made effective and simple for the workers. Even obligations as to rights provided in law are still being taken away by the granting of applications by employers whilst denying the fundamental right to be heard or objections before decisions are made. Minister’s decisions are held to be final and uncontestable in court. Workers are being weakened when union leaders are now allegedly being dismissed simply because they criticized their employers – not because of work performance or work-related misconduct.

The right to permanent employment until retirement today is being replaced by short-term fixed duration employment relationships, whereby most of these short-term employment contracts are for one year or less, with no guarantee of renewal. Since 2005, with the emergence of the ‘outsourcing concept’ which started for migrant workers, now expanded to local workers, traditional just employment relationships between those that own and control the workplace, who have work and need workers to do the required work, is also being withered away with the introduction of manpower/labour suppliers who now supply workers whilst continuing to be the employers even after the said workers start working at, and for the workplaces, factories and offices of the principal.

In short, these new ‘employment relationship’ introduces a third party and allows principals and owners to now just utilize the labour free of employer obligations to the rights and welfare of the workers. We shall be looking briefly at the situation of worker and trade unions in Malaysia, but not all, to determine this current government’s performance when it comes to worker rights and welfare.

Right to ‘eight hours labour, eight hours recreation, eight hours rest’ eroded

Action taken by stonemasons on 21 April 1856, followed by many other worker struggles ultimately led to the establishment and maintenance of the Eight Hour Day, that is now recognized internationally, and this right was also given a high priority by the International Labour Organization (ILO) since its creation in 1919. The slogan ‘Eight hours labour, Eight hours recreation, Eight hours rest’ captures the essence of this struggle.

Likewise in Malaysia, this right is to be found in our Employment Act 1955. Any work beyond 8 hours would be construed as overtime work, and this required the consent of the worker and also entitled the worker to be paid extra, at a rate usually not less than one and half times his hourly rate of pay (Section 60A 3(a) Employment Act 1955).

In 1989, the government amended the law (Employment (Amendment) Act 1989 Act A716) allowing for the Minister to waive these rights as to required hours of work, on the application of the employer, but retained the condition that no worker is required to work for more than forty-eight hours in one week, which subsequently was removed by yet another amendment in 1998 (Employment (Amendment) Act 1998 Act A1026).

What was obviously missing was the requirement of the prior agreement of the worker and/or the relevant union, let alone the right to be heard, before decision are made that allowed the employer to deny workers this long struggled for right that limits the required hours of work. The law now provides that after that decision is made, ‘… any person who is dissatisfied with any decision of the Director General … may, within thirty days of such decision being communicated to him, appeal in writing … to the Minister, and any decision or order of the Minister shall be final, thus shutting the door to judicial review – being the court’s authority to examine an executive or legislative act and to invalidate that act if it is contrary to constitutional principles and justice.

There is also an absence of clear provisions in law that requires the provision of any notice whatsoever to workers and/or their unions when the said applications are being made by employers to the Director General, and as such decisions are being made by the government without workers being given the right to be heard. At present such ‘permissions’ are not even publicly and openly disclosed even in the relevant Ministry’s website.

No guidelines and/or simple forms are provided for as to how workers can appeal these decisions, and given that the appeal must be in writing, there being no provision of any right to be heard orally, workers and/or unions, with no required language capabilities or knowledge in law are certainly prejudiced by this present procedure of protest and appeal. Remember, there are about 2 million migrant workers in Malaysia, most of whom do not have the capacity to read and write Bahasa Malaysia, let alone write to the Minister.

The employment law provides minimum rights for all workers in Malaysia, but these rights can so easily and ‘secretly’ be denied to workers as the Director General of Labour permits employers to do so, with no prior notice or right to be heard given to workers. Similar provisions are available all over the Acts providing for various worker rights to be taken away.

As it now stands, workers may be required to work long hours, even more than ten hours per day, and even more than 48 hours per week – so what exactly is the limit? The employers also can require their workers to work on rest days and even on public holidays. Some workers even have to work on May 1st, Workers’ Day!

Some companies do not stop operations, and workers are continuously working in their respective shifts and this also prevents workers from meeting and/or organizing unions and/or developing collective demands. Workers on day shifts, some starting at 8.00 am and ending at 8 pm would not even have the opportunity to go to the Labour Department to lodge complaints, and in Malaysia most of the avenues of complaints and justice for workers only operate during the usual working hours. The same is the case with national/regional unions and the MTUC office, National Human Rights Commission (SUHAKAM) and even the Legal Aid Centres operated by the Malaysian Bar.

Minimum wages

In most developed and in some developing countries, minimum wages for workers have long been fixed by governments and laws. India, for example has had a Minimum Wage Act since 1948. Other examples include Indonesia, Thailand, Vietnam, Philippines, India, Hong Kong, United States of America, Australia, New Zealand, Canada and United Kingdom.

Fast track: Average wages and allowances for local workers

However, the Malaysian government has been avoiding the fixing of minimum wages, despite repeated calls being made by the Malaysian Trade Union Congress(MTUC) and workers for several decades. Even after August 2010, when the government’s own Human Resources Ministry’s study of 1.3 million Malaysian workers found that a shocking 34 percent earned below the poverty line income of RM750 per month (Malaysiakini, 5 August 2010), the government has failed to recommend a minimum wage.

At the same time, the government continued to implement measures, including reducing subsidies, that resulted in an even higher cost of living. Then suddenly, just before the upcoming 13th General Elections, the prime minister announced on Labour Day 2012, that he would be implementing a minimum wage policy.

The Malaysian government, obviously committed to neo liberalism and free trade is perceived to be pro-employer, inclined to ensure that cost of labour is kept low and workers in Malaysia are ‘problem-free’ – all this allegedly to keep Malaysia competitive so as to attract foreign direct investments into the country.

Paradoxically, the Malaysian government may have interfered with market forces that might have improved wages, work benefits and conditions of workers by the introduction of migrant workers, temporary and casual workers into the labour market. However, these workers related policies and laws might have had the effect of weakening the bargaining rights of workers and unions.

Stagnation of workers’ righrts and erosion of justice for workers

The Malaysian government seems to have failed to improve workers’ access to justice too. If an employer cheats the worker by non-payment of agreed wages, overtime and/or makes wrongful deductions, the worker who succeeds in the Labour Department or Court at the end of the day only gets the amount that he was deprived of, not even additional interest or cost including the cost of transportation, the cost of taking leave and hence loss of daily wages when he attends court, and the cost of a lawyer and/or union representatives. When workers want to meet and seek advice or help even from MTUC officials, workers allegedly have to pay them a nominal sum of about RM60 per meeting. At the end of the day, for the lowly paid worker, it becomes more practical that they do not claim their rights. Hence the errant employer gets off scot-free.

For employers, the law favors them for even when it is proven that they have violated worker rights, all that is required of them is to pay the worker what they should have originally paid their workers. As an example, section 100(1) of the Employment Act states:

Any employer who fails to pay any of his employees wages for work done by his employee on a rest day or pays wages less than the rate provided under section 60 commits an offence, and shall also, on conviction, be ordered by the court before which he is convicted to pay to the employee concerned the wages due for work done on every rest day at the rate provided under section 60, and the amount of such wages shall be recoverable as if it were a fine imposed by such court.

This certainly is not just and does not deter employers from breaking the law. It would have been more just and a deterrent if the errant employer is ordered to pay at least 3 times the sum that he cheated the worker.

In the Employment Act, there is also no provision that protects workers who complain or access the avenues of justices, from being terminated and/or discriminated by reason of the fact that he is claiming rights against the employer. It is thus not uncommon that workers who complain or claim rights are summarily terminated; for the migrant worker, it is worse! For a termination will also be the loss of the legal right to remain in the country to claim or to continue pursuing their claims compounded with the fact that migrant worker will also not be allowed to work with any other employer even if he is allowed to stay.

Discrimination based on gender also occurs as when the courts recently affirmed practice of a company that had different retirement ages for men and women workers. Indeed, the Government was silent despite the fact that this certainly goes against our own Federal Constitution which guarantees equality to men and women performing the same job.

Industrial courts – Only court which requires Minister’s permission

When it comes to workers claiming wrongful dismissal seeking reinstatement, they have to lodge their complaint at the Industrial Relations Department(IRD), and if the dispute cannot be resolved, it is then referred to the Minister who has the power to decide whether the case be referred to the Industrial Court for trial or not. The issue is: why should the Minister’s permission be needed? For when a matter cannot be resolved between employee and employer at the IRD, it should immediately br referred to the Industrial Court. An additional hurdle in a worker’s quest for justice is unnecessary; it may also be discriminatory.

The law also provides that if any party is dissatisfied with the decision of the Minister, they may go to the High Court to challenge that decision. But unlike the Labour Courts and Industrial Courts, the High Court will award cost against the losing party, and this can be high and for the ordinary worker, who has been wrongfully dismissed, this may be an added financial risk which is unaffordable. The pursuit of justice in any court, I believe, requires the removal of all monetary risks.

As of February 2008, workers successful in their claim for wrongful dismissal saw the entitlement to wages and benefits, drastically slashed when in lieu of reinstatement all they could get was limited to a maximum of 24 months wages, based on their last drawn salary, less a percentage of post-dismissal earnings. Prior to this, their entitlement was for wages and benefits from date of dismissal until judgment and other matters. This was certainly an anti-worker amendment to the Employment Act.

There is still no Industrial Courts in Pahang, Trengganu, Kelantan, Kedah, Perlis, Melaka, Negeri Sembilan and Selangor. Why did this government not ensure that there are Industrial Courts in all major and medium sized towns, preferably no further than 50 kilometers from the workplace to ensure easy access to justice for workers. Today, after 50 over years since independence, we see Industrial Courts only in Kuala Lumpur, Penang, Ipoh, Johor Bahru, Kota Kinabalu and Kuching.

Charles Hector, an Aliran member, is a human right lawyer based in Temerloh. Part 2 will appear in the next issue.

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