Tuesday, September 11, 2012

Minimum Wages should be paid NOW. Do not discriminate against probationers and workers of East Malaysia

Minimum Wages Order 2012 or Perintah Gaji Minimum 2012(PUA 214) dated 16/7/2012 have been gazetted, and one can have sight of it at the Ministry of Human Resources Website.

Oddly, there has a lot of security features in this PDF document - so much so, one cannot copy portions of the test from the PDF document, and paste it in a MSWord document and I also could not convert this document into text copy -- and I ask WHY is this so, because this prevents persons disseminating these documents in any other form - which for Bloggers, it is easier to past a version that is not a PDF in their blog. For critics, it is easier to cut and paste, when they are writing about this Order. Generally a PDF document cannot be downloaded in a Blog. Why did the Malaysian government do this? Remove the security features, so that one can copy and paste, or convert the PDF document into MSWord, etc...

Essentially, this order 

* The order comes into effect on 1/1/2013 and applies to all employers that have more than 5 workers ( Unfortunately, the Order allows for employers to apply to delay the implementation of this Order - which really should not be allowed.)

* Minimum wages need to be paid by other employers, i.e. employers with 5 or less than 5 workers from 1/7/2013.

* The order does not apply to domestic workers - 

* Minimum wages for a worker in Peninsular Malaysia is RM900 per month (or RM4.33 daily)

* Minimum wages for a worker from Sabah and Sarawak is RM800 per month (or RM3.85 daily). Odd, because I believe that the cost of living in Sabah and Sarawak is generally higher than in Peninsular Malaysia, and reasonably the minimum wages for Sabah and Sarawak workers should be higher...if not the same. 

* PROBATIONERS - employers are allowed to pay probationers up to 30% less than the minimum wage, but they can do this only for 6 months, and thereafter probationers are entitled to minimum wages.

WHY should probationers be discriminated against by the Malaysian government? 

When workers get newly employed by an employer, probation is the time given to an employer to assess the performance and suitability of the said employer after which the said worker is confirmed and becomes a regular employee - a permanent employee until retirement age.

Now, a new employee of probation is not necessarily a worker starting to work for the first time after completing their education, and today it is also workers who had been previously employed elsewhere or with other previous employers. The later class of workers usually already would have families, children, dependents, and may also have financial commitments like paying monthly loan payments for cars, motorbikes, houses, etc - so why should he/she be prejudiced against by this Minimum Wages Order for isn't the minimum wage computed based income generally required for any worker and their families to justly survive in Malaysia. The minimum wage is basically survival wages - not a decent living wage. The government had to intervene and set the lowest limit of wages that an employer pays the worker because the reality was that in Malaysia many employers unjustly were paying workers wages that were even lower than the poverty rate. 

For new workers, just starting of as a new worker, there may have been some justification....but even that, since we are talking about minimum wages, they too should be entitled to that RM900.... not RM600 only as the Order currently stipulates.

How long should probation last? Sadly, Malaysian employment laws do not clearly stipulate and some Malaysian employers takes advantage and keep their workers on probation for long periods sometimes even more than 2 years, and they do this because the rights and entitlements of a probationer is far lower than that of a confirmed employee. Reasonably, probation should be no longer than 3 MONTHS - and thereafter, the said employee should be deemed a confirmed employee. 3 months is a long period, and really how long does it take an employer to access the suitability of a worker.

This order validates the actions of employers keeping workers as probationers for 6 months or more... and this certainly is detrimental to justice and worker rights.

WAGES - Now, the order does not give a meaning to 'wages' but the National Wages Consultative Council Act 2011, under whose power the Order is made, in section 2 defines wages as...

"wages" has the same meaning assigned to it in section 2 of the Employment Act 1955[Act 265], section 2 of the Sabah Labour Ordinance[Cap. 67] or section 2 of the Sarawak Labour Ordinance[Cap. 76];

Now, section 2 of the Employment Act defines 'wages' as follows:-

"wages" means basic wages and all other payments in cash payable to an employee for work done in respect of his contract of service but does not include- [Am. by Act A716] (a) the value of any house accommodation or the supply of any food, fuel, light or water or medical attendance, or of any approved amenity or approved service; (b) any contribution paid by the employer on his own account to any pension fund, provident fund, superannuation scheme, retrenchment, termination, lay-off or retirement scheme, thrift scheme or any other fund or scheme established for the benefit or welfare of the employee; (c) any traveling allowance or the value of any traveling concession; (d) any sum payable to the employee to defray special expenses entailed on him by the nature of his employment; (e) any gratuity payable on discharge or retirement; or (f) any annual bonus or any part of any annual bonus;

Looking at the definition, it seems that wages may include overtime, work on rest days, shift allowances, etc - and this is wrong, for 'wages', when we talk about minimum wages should justly only be basic wages, and should not include overtime payments, payments for work on rest day and public holidays, shift allowances or any other allowances. Monthly minimum wage should be 8 hours 6 days a week work, or for 48 hours of work per week. 

There is a need for a clear definition of 'minimum wage' - that will clarify that this is really basic wages. Failure to do so may result in some employers just lumping it all together to the detriment of workers - and certainly going against the very reason for 'minimum wages'. There is still some vagueness... 

We have to remember also that less than 10% of workers in Malaysia are unionized, and the majority do not have unions ...and as such no 'Collective Bargaining Agreements' or the means of getting better rights than the minimum rights provided for in the Malaysian law. 

If this Barisan Nasional government is concerned about the workers in Malaysia, they should immediately :-

a. Remove the discrimination of Sabah and Sarawak workers, and ensure workers in Sabah and Sarawak enjoy the same minimum wages as those in Peninsular Malaysia,

b. Remove the current discrimination against workers on probation, especially those workers in employment not in their first job.

c. Ensure that minimum wages is with regard basic wages only - not including overtime, work on rest days and public holidays, shift allowances, other allowances, commissions, etc.

d. Enact a law that restricts probation period to not more than 3 months only.

e. Ensure that no extension of time is given to employers to ensure that all Malaysian workers at the very least are paid minimum wages.

f.  Make sure that all workers, including those who employ 5 or less and also domestic workers are entitled to receive minimum wages immediately - not next year or in July 2013. All workers should be entitled to the minimum wages immediately.

g. Revise the minimum wages to a more reasonable amount for a worker and their family to sustain a decent living in Malaysia today.


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