For the sake of migrant workers & small medium businesses - Malaysia should be rid of 'Outsourcing Companies' - and allow direct recruitment/employment

Employer is short of workers...he has made efforts and he cannot get local workers, and then he goes to the government permission for the Employer to get foreign workers.Government investigates, and then gives permission.

Employer proceeds to get migrant workers. Usually, by way of advertisement or agents in the country of origin, the employer identify and pick suitable workers. Employer makes an offer - i.e. the term of employment (usually it will be for 3 years or more), the salary, etc. If the worker accept, then the employer and the worker/s sign an Employment Agreement/Contract. [In some countries of origin, the workers will sign in front of a Government Official, and the employer may be required to sign in the presence of an embassy official in Malaysia). 

After this agreement is signed, the employer informs the Malaysian government - and a letter of approval issued together with directions  as to work visa/permit applications, etc

Worker comes to Malaysia - met by the employer and proceeds to work.

This was the way things were done in the past - Direct Employment of Migrant Worker. Employer with jobs employs workers..

Then the government of Malaysia came up with the 'Outsourcing Companies' [Labour Suppliers??] - These are usually small companies, usually with no jobs or assets or money in the bank, and they were given the right to bring in migrant workers. 

The problem is that the agreement is now between these Outsourcing Companies and the Workers. The Outsourcing Companies then supply the 'real employers' with the workers - but there is no employment agreement between the employers and the workers. Some of these employers pay the workers directly their wages, etc... some pay the outsourcing companies who then pay the workers.

If there is a grievance against the employer, when the workers take the matter to the Labour Department - the question is 'Who is the Employer?' - they say bring the Outsourcing company to court - but alas, these '2-dollar companies'' have no asset and no capacity - Their claim is none payment of overtime allowance ....wrongful dismissal... Can this matter be settled between the worker and the Outsourcing Company? Their complain is about injury at the workplace - can the Outsourcing Company be made liable for this? If the worker succeeds, and the claim is large - Outsourcing company can easily wind-up and disappear. No plantation, machinery, factory lot that could be sold to recover something for oppressed workers...

Some outsourcing companies also keep the worker in one place for a couple of months, and then move him/her to another employer and so on. Hence, it prevents worker solidarity...and certainly makes it a problem with claiming of rights for in January, you were working in Temerloh ...and then you are in Johor Baru in April...Rolling stone gather no moss - now, it is moving workers less problems...but workers are being oppressed.

Many employers are also not happy with this situations - They want that third party, the 'Outsourcing Company' removed from the picture. They want a direct employer-employee relationship with the workers. Malaysian labour laws also have not been amended to incorporate the strange entity - the 'Outsourcing Company' - will they be made liable for the Occupational safety and health requirements of the workplace, minimum standards of accommodation... What happens in a wrongful dismissal case - a reinstatement order without loss of benefits - how can the 'Outsourcing Company' even comply with this? When asked to present salary slips,  start work end work records, etc in a Labour Case - can the 'Outsourcing Company' do this? Who is responsible for the sexual harassment  and other wrong actions of the manager of the factory they worked at? The 'Outsourcing Company'?

Malaysia should just get rid of the 300 over Outsourcing Companies .... 

JOHOR BARU: The Government should liberalise the recruitment of foreign workers by allowing small-medium enterprises and industries to hire them directly.

Malaysian Indian Business Association (MIBA) president P. Sivakumar said the problem involving the influx of foreign workers in the country started when outsourcing companies were given a free hand to import workers.

“Many of them abused the system and brought in thousands of workers. When there was no work, they left the workers stranded at airports and plantations.

“Obviously, the workers, who had paid huge amounts of money to come here, then went into hiding and worked illegally,” he said in an interview.

Sivakumar expressed confidence that the Government would be able to overcome the illegal immigrant problem if businesses requiring foreign workers were allowed to deal directly with embassies and high commissions.

Sivakumar said many businesses, especially restaurants, laundry shops, goldsmiths, barbers, hair salons and mini markets, were suffering as they had insufficient workers.

He said the association had been inundated with calls and complaints from members wanting the Government to either legalise or allow them to recruit foreign workers directly. - Star, 24/3/2010, ‘Allow direct intake of foreign workers’