By Aliran, on 25 August 2012
Under this pro-business BN government, trade unions have been weakened and workers’bargaining powers eroded, writes Charles Hector.
Photograph: Jerit
As of January 2012, the employed labour force in Malaysia was
about 12.4m. Out of this, only 798,941 workers (6.44 per cent) are
members of trade unions, of which about 53 per cent are private sector
workers, 38 per cent public sector workers, and 9 per cent workers of
statutory bodies/local authorities, after more than 50 years of
independence.
It is obvious that this Malaysian government has not been actively
promoting the formation of trade unions. In fact, its more recent
policies seem directed towards the weakening of trade unions. Electronic
workers, for example, have still not yet been allowed to form a
national union. The only concession made after years of struggle was
when the BN allowed the formation of four regional unions in the
Peninsula in 2010 (The Star, 1 May 2010).
The perception amongst workers is that this government has favoured
unions that represent workers in the public sector, statutory bodies and
local authorities, who have enjoyed wage increases, cost of living
allowances (Cola) and other benefits. The primary motive, however, may
not be acknowledgement of the rights and welfare of workers; instead, it
is to woo these workers to support the Umno-led BN coalition. That
said, the perks and ‘special treatment’of these workers just prior to
elections does not necessarily translate into blind loyalty to the BN
cause. For today, the people, including workers in the public sector,
have awakened from their slumber, thanks to the availability of more
information via the alternative media and exposure to the global media.
Hence, they will vote in the upcoming elections as they please!
Another reason for the declining number of workers involved in the
trade unions is the growing use of short-term contract employment,
temporary and/or casual employees at the workplace. Such short-term and
temporary employment which can be terminated by not renewing the
employment contracts have made such workers disinclined to form, let
alone join and actively participate in, trade unions. The fact that
unions often hold general meetings and elect their leaders once every
three years, further discourages short-term contract workers from active
participation in the unions.
Trade union membership in Malaysia 2006-2012
Source: Department of Trade Union Affairs website
Compounded with this is the emergence of a new class of workers
commonly known as ‘outsourced workers’, who are not considered employees
of the principal or owner of the workplaces. As such, they are not
allowed to join in-house unions or even regional/national unions. As
well, they cannot resort to Collective Agreements, since these are
agreements between employers and direct worker-employees. With no law
limiting the percentage of ‘outsourced workers’working at a particular
workplace, they can account for up to 50 per cent of total workers in
some factories.
The Trade Union Act also provides that when a worker has been
terminated, he/she automatically will cease to be a member of the trade
union. At a time like this, when a worker really needs the support and
assistance of the trade union, he/she is legally deprived of union
membership.
In this regard, there have been an increasing number of cases wherein
active union leaders have been dismissed. Often, the reason advanced by
their employer is that they have brought disrepute and/or insulted the
management of their employer-company – eg, Hata Wahari, the president of
the National Union of Journalists, and more recently Chen Ka Fatt and
Abdul Jamil Lalaludeen, respectively, honorary treasurer and
vice-president of the National Union of Bank Employees (Nube) were
dismissed. In the latter two cases, the Nube leaders apparently had
participated in a rally outside the United Nations building in Geneva
where they carried a banner declaring “Maybank robs poor Malaysian
workers” (Harakah, 7 Feb 2012). Workers should not be terminated, save
by reason of non-performance of their job and/or some
infringement/breach at the workplace or related to work. It is wrong to
start dismissing workers because they criticise their employers.
Erosion of the right to permanent employment
Permanent employment is a basic right, essential for the well being
and welfare of workers and their families. One’s employment usually
determines where one will settle-down, buy homes and land, where onefs
children will go to school and even where onefs spouse will find
employment. With short-term contracts increasingly the practice, it is
stressful for the worker not knowing whether at the end of his contract
period, he or she will still be employed at the workplace.
In our employment laws, what was clearly envisaged was permanent
employment until retirement. Accordingly, the Employment Act 1955
contains clauses that provide for gradual increases in entitlements to
annual leave, sick leave and even the calculation of termination and
lay-off benefits. Even when it comes to retrenchment, there was the Last
In First Out (LIFO) policy, that protected workers with longer periods
of service. Indeed, the law imposed the obligation on employers to first
attempt to provide alternative employment within the workplace, before
having to let an employee go.
This right to permanent employment has systematically been replaced
with short-term or fixed duration contracts of employment, sometimes
less than one year, with no guarantee or safeguard of a renewal of
employment contract even if the employer still needs workers at the end
of the contract period.
For those, who already are permanent employees, employers have used
various means to destroy this relationship and to replace it with
short-term contracts. One method used is the outsourcing of work to
third parties: forcing employees to leave and to enter into a new
contract with these new third party employers, or face retrenchment.
Another method employed in Malaysia is the Voluntary Separation
Scheme (VSS). Ironically, many workers have lost permanent employment
and only to be re-employed by the same employer, this time as short-term
contract workers.
Public sector employees also lost permanent employment with pension
rights when state entities were privatised and this continues to happen.
Employers now can very easily get rid of workers who are older,
‘problematic’ (because they are demanding rights or even getting
involved in union activities), pregnant or partially disabled following
an industrial accident. Or they may just not offer them a new contract
of employment. This effectively diminishes significantly the workers’
ability to fight for better wages, working conditions and other
employment benefits.
The provisions for employing temporary or casual workers also gives
the Minister the power to reduce workersf rights guaranteed by the
parent Act for these workers.
Having different classes of workers at the workplace strengthens the
ability of employers to ‘divide and rule’workers – hence greater power
to control workers while eroding the workers’ability to demand better
rights.
‘Bonded’ migrant workers
Initially, the Malaysian government created Free Trade Zones near the
bigger towns, and workers from all over the country came to work. As
time passed and wages remained low while the cost of living rose and the
quality of life declined, workers started moving back to their home
towns and new workers were less inclined to come.
The government then allowed these factories to be established all
over Malaysia, especially where the workers and their families resided.
Today, there are over 200 industrial estates, free commercial zones and
free industrial zones spread all over the country.
As time went on, Malaysian workers demanded higher wages and better
working conditions. Instead of facilitating these demands, the Malaysian
government came to the assistance of employers by bringing in more
controllable and cheaper labour, namely, the migrant workers, who were
obliged to work for one employer only which, invariably enabled
employers to oppress these workers. After all, if the migrant workers
were dissatisfied, the only choice they had was to quit and return to
their home country. In fact, even this is not a real option – for these
workers would have spent a lot of money and incurred debts when they
chose to come to Malaysia as migrant workers.
Access to justice is available to migrant workers just like any other
worker, but when they complain of rights violations or start using
these legal mechanisms, the response of many employers is simply
termination of their employment: work passes/visas would be cancelled,
disallowing the workers to legally remain in the country. Hence, they
would lose any right to pursue their claims in the Labour Courts or via
other avenues. If they stay on in the country ‘illegally’, they risk
being arrested, detained, charged in court, convicted, whipped, and
thereafter deported. The fact that they have valid claims or have lodged
complaints in relevant avenues for justice is irrelevant.
Hence, migrant workers became a preferred source of labour for many
employers – bonded and forced to work for the one employer, so very
easily forced to work overtime, denied rest days and even public
holidays.
Fortunately, there has emerged some measure of workers’ solidarity
and Malaysian workers and trade unions, including the MTUC began to
accept migrant workers as workers, and started fighting for the rights
of migrant workers too. The unions accepted migrant workers as members
of trade unions, irrespective of the fact that one of the conditions of
these migrant workers’work passes/visas denies them the freedom of
association. The unions, including the MTUC, have been ready and willing
to take the matter to court if any employer, or the Malaysian
government, contests the right of migrant workers to join unions or to
benefit from Collective Agreements.
Besides migrant workers, the Malaysian government also created other
classes of workers – temporary and casual workers. Such different
categories of workers kept them divided and prevented them from joining
existing unions.
Using labour without entering into employment relationship
In fact, short-term contract workers, migrant workers or the other
types of workers are employees of the factory and workplaces they work
in. Hence, employers have duties and obligations to ensure that the
rights and welfare of these worker-employees, as contained in existing
national laws and in collective agreements, are provided for.
Alas, in 2005, the Malaysian government came up with a policy that
allowed factories and workplaces to use workers, without having to enter
into any employment relationship with these workers. A new entity was
created called ‘outsourcing agents/companies’, who would be
labour/manpower suppliers, who would be supplying workers to factories
and workplaces.
Under the Private Employment Agencies Act 1971, private employment
agencies are considered the employers of these workers, and will
continue to be the employer of the workers even after they start working
in particular factories and workplaces. These workers are commonly
known as ‘outsourced workers’.
In contrast, the ‘outsourcing agencies/companies’ are not considered
to be the employers of these outsourced workers. Significantly, it was
not the Ministry of Human Resources but the Ministry of Home Affairs
that issued the licence/permits to these ‘outsourcing agents/companies’.
In this regard, I believe that this new Act runs contrary to the
spirit of existing laws and principles. In the beginning, this practice
applied only to migrant workers. It was later extended to cover local
workers too. Consequently, in some factories today, about 50 per cent of
the workforce is made up of these ‘outsourced workers’ who are not
employees of the factory and/or workplace. Accordingly, they cannot join
workplace unions and/or benefit from Collective Agreements either.
The ‘outsourcing agents/companies’ set-up is a very profitable
business with little or no risk, even from their ‘employees’, who even
if they were to strike would not affect these labour suppliers
(‘contractors for labour’). After all, they do not run factories;
indeed, there is no work that needs to be performed in order to generate
profits. This is a form of what might be called ‘rentier capitalism’!
In 2010, the Malaysian government took steps to give statutory
recognition to this unjust employment practice and relationship. They
wanted to give legal recognition to these ‘contractors for labour’ –
these labour suppliers. They wanted to confirm that the ‘contractor for
labour’ is the employer, and remains the employer of these ‘outsourced
workers’ even after they start working in the workplaces of principals.
All this was achieved, despite strong protests coming from workers,
their unions, MTUC, civil society groups not just within Malaysia but
also internationally. The amendments proposed was passed and came into
effect on 1 April 2012.
The use of ‘outsourced workers’ or outside workers at workplaces by
principals are growing, and it also happens in government-linked
companies. For example, the TNB Junior Officers Union protested in early
2012 against the employment and use of eoutsourced workersf by TNB.
The Minister of Human Resources recently announced an exemption of
some (but not all) of the recent amendments concerning ‘contractor for
labour’ to all sectors except the agricultural sector. In fact, it was
just a reaffirmation of ‘contractors for labour’ and the continued use
of ‘outsourced workers’by principals who do not consider them as their
employees.
There is no doubt that such arrangements run contrary to the
sentiments and principles governing employment relationships of the
International Labour Organization. Our own Employment Act also clearly
states that ‘the person or class of persons employed, engaged or
contracted with to carry out the work shall be deemed to be an employee
or employees and (a) the principal or owner of the agricultural or
industrial undertaking, constructional work, trade, business or place of
work; or (b) the statutory body or local government authority, shall be
deemed to be the employer’. Rightfully all involved in the business of
finding and supplying workers must be private employment agencies,
governed by the Private Employment Agencies Act 1971, who for their
services will be paid a fixed one-time fee. They will thereafter have no
other relationship, let alone employment relationships, with the
workers after they are accepted and start working for the principal. The
workers will then become the principalfs employees. Hence this
provision for ‘contractors for labour’ is totally against the spirit of
our own Employment Act!
The MTUC and workers have continued to protest against this provision
for labour contractors. In 2012, the Malaysian Bar passed a Resolution
unanimously calling for the maintenance of a two-party employment
relationship between workers and the principal to the exclusion of all
thid parties, especially the ‘contractor for labour’. Regardless of
whether they are called labour/manpower suppliers or outsourcing
companies/agents, there must be just one class of workers – all of whom
are employees of the principal – who can join the unions at the
workplace and fight as one for better workers’ rights and benefits.
The way forward
The BN government seems to have lost its way and abandoned its duties
and obligations to improve the rights and welfare of persons, workers
and their families. Slowly but surely workers’ and trade union rights
have been eroded. The government needs to stop being pro-employer and
pro-business, concerned only with big profits. It must do what is needed
immediately to restore the rights of workers to permanent employment
until retirement, to strengthen trade unions, which is an essential tool
for the protection and improvement of the livelihood of workers, and
most importantly to maintain the two-party employment relationship.
In the upcoming elections, Malaysian workers and their families will
again have the opportunity to get rid of this BN government and let a
new coalition form a new government in the hope that a new government
will reverse this erosion of workersf and trade union rights. The
choice ultimately rests with the people and the workers. Our concern
must not be driven by self-interest based on workplace or sector,
ethnicity, nationality, religion, culture or even current political
affiliations, but by a concern for the future common good and best
interest of all persons and their families – which includes the over 10
million workers in Malaysia.
Charles Hector is a human rights lawyer based in Temerloh. Part 1 of
this article appeared in the previous issue of Aliran Monthly.
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