Direct employment relationship with the owners/operators of workplaces who need workers to their work is always JUST and REASONABLE - Workers and even the Workplaces want this but why did the Malaysian Government keep and maintain these 'contractors for labour' - a.k.a - the labour outsourcing companies, the labour supplier companies - Well, whoever gets these license/permit to do this makes BIG Money - The worker they supply works in a factory, For work done by the worker, the factor pays these 'contractor for labour' money ...and they take about 30% and pays the rest to the workers - it is Big Money.
Remember, Malaysia already had the Private Employment Agencies (and laws governing them) - what they did was to find workers for employers that needed them, and once the workers are sent to the factories - the private employment agent is paid a one time FEE. [But these new 'contractor for labour' will continue to earn from sweat and toil of workers indefinitely....WHY?]
On or about mid-2005, the Malaysian government introduced the 'contractor for labour' system with regard migrant workers. Since then, this has been extended to local workers.
Now, owners and operators of workplaces could avoid EMPLOYING workers - they can simply enter into an agreement with these 'contractor for labour' to supply a certain number of workers to work at their workplaces - these workers will not be EMPLOYEES of the owner/operators of workplaces (the principals) - so no more responsibility for hiring and firing, to ensure all rights to workers accorded in law/employment agreements/Collective Bargaining Agreements are enjoyed by these workers, etc .
Employers will have a direct employment relationship with their workers - their EMPLOYEES
Employers will be required to ensure all rights and benefits due to employees is respected and protected
Employees can join Unions at the workplace, and enjoy benefits in existing Collective Bargaining Agreements.
Employees can make request directly to employers for improvement of work conditions and benefits - only the owner/operator employer has the ability to do these (A third party labour supplier cannot do this - he supplies workers, get paid by the owner/operator of workplaces, and pays the workers a part of this keeping the rest as the supplier's profits, Why enrich the 3rd party labour supplier?)
See also the following posts and the many other earlier posts to understand better:-
93 Groups:- Abolish the ‘Contractor for Labour’ system Withdraw the 2012 amendments to Employment Act 1955.
Has Malaysia banned 'outsourcing' - the 'contractors for labour'? Sue the person who holds worker passport?
Malaysia downgraded to Tier 3 - Trafficking in Persons Report 2014 - contractor for labour system, etc.. blamed?
Direct hiring will curb abuse of workers, say Penang industries
Heng Huck Lee, president of The Free Industrial Zone, Penang, Companies' Association (Frepenca), said the government should allow only direct hiring as a way to circumvent any problems caused by “third parties”.
“Our members want to go direct, but the government does not allow us to do so,” he told The Malaysian Insider.
He added that quotas given to contract companies, which outsource labourers to firms, also contributed to the problem. Heng was commenting on a recent report by international labour rights group Verite which concluded that a third of the workers in Malaysia's electronics industry suffered from debt bondage.
The report, titled "Forced Labour in the Production of Electronics Goods in Malaysia", was completed this year following funding given by the US Department of Labour in 2012.
Based on interviews with 501 workers, the study found that 28% of employees were in situations of "forced labour", where work is coerced through factors including indebtedness from excessive fees charged by recruiters.
That figure rose to 32% for foreign workers, who are often charged excessive fees that lead to indebtedness. Verite also found that 73% of workers in the sector showed "some characteristics" of forced labour.
Heng said the problem was related to agents who brought in the workers from other countries as well as companies that are licensed to outsource them to industries.
He said as far as possible, the members of Frepenca, which consists of more than 60 firms including US, Japanese and European giants with plants in Penang, try to get their own workers.
He said it was proven in many companies that if the hiring through agents or contract companies were stopped, the problem of abuse of the foreign workers would subside.
“If the workers all are hired directly, they are in fact well-treated, in some cases even better than the locals, with similar salaries and housing provided,” he said.
On the assertion by the Malaysian Trades Union Congress (MTUC) that there was a need for unions to be allowed in companies as a way to curb the problem, Heng said the issue was mainly related to agents.
“This is not a union problem. It is an agent problem,” he said.
He said agents continued to take advantage when companies did not hire directly, and in many cases, they sought to profiteer from the workers.
According to the Verite report, one in five workers interviewed was misled in the recruitment phase about the terms of their employment agreement.
“Twenty-two per cent of foreign workers were deceived about their wages, hours, overtime requirements or pay, provisions regarding termination of employment, or the nature or degree of difficulty or danger of their jobs,” the report said.
Verite also found workers' passports were often retained by recruitment firms, which is prohibited in Malaysia.
Penang’s free industrial zones in Bayan Lepas and Seberang Prai are major hubs for Malaysia’s thriving electronics sector.
According to the Malaysian Investment Development Authority (MIDA), the electronics and electrical industry contributes significantly to the country's total manufacturing output (27%), exports (49%) and employment (33%). – September 24, 2014. - Malaysian Insider, 24/9/2014, Direct hiring will curb abuse of workers, say Penang industries