G. Rajasekaran: Widespread abuse of VSS by employers

Thursday, June 5, 2008

Widespread abuse of VSS by employers

“Human Resources Minister Datuk Dr. S. Subramaniam has warned companies not to use voluntary separation schemes (VSS) to replace staff with foreign workers” - .

NST 4 June 2008

Employers, especially MNCs are taking undue advantage of Government’s flexible policies. French multinational company Lafarge Cement in Rawang announced a voluntary separation scheme (VSS) to reduce the workforce. When the company found that applicants for so called VSS fell short of three persons, despite numerous appeals by the union, company terminated the two long serving employees as well.

Having eliminated 23 workers the company invited contractors to bring in 30 workers and run the operation.

British American Tobacco

Tobacco giant, British American Tobacco carried out VSS exercise to eliminate 15 employees from the maintenance section. Eight employees did not apply to leave under the VSS and expressed their preference to continue working.

BAT terminated the 8 and appointed a contractor to bring in workers to manage the maintenance section. Union believes that the outsourced system cost BAT more.

HR Minister must make good on his promise to stop such abuse.

In 1998 Govt established procedures under the Employment Act to require employers to notify the nearest Labour Department of any termination, including under VSS.

Are the employers complying with this requirement? What does the Labour Department do to ensure that retrenchments are genuine? Trade unions have complained that the Labour Department does not make a genuine effort to investigate the termination exercise. Labour Department’s indifference over a long period of time has encouraged unscrupulous employers to act in breach of Labour Laws and policies.

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PRESS STATEMENT - LABOUR OUTSOURCING (21ST JULY 2008)

Q: Should foreign labour outsourcing be banned?
A: Outsourcing is the best solution for the government to manage foreign workers.

Q: Why?
A: There are two scenarios

One is that as companies get bigger, they will need more manpower and with outsourcing they can get workers in a more organized way.

Two, outsourcing is good as it will attract foreign direct investment. Investors will not want unions to be formed in their establishments.

Through outsourcing, it would be difficult for unions to be formed as the outsourcing company, and not the factory, would be the employer.

Datuk Ishak Mohamed, Enforcement Director Immigration Department
NST July 20, 2008

Trade unions in the country have always been suspicious of Government’s motive for flooding the country with millions of foreign workers in the last 15 years.

Although Government says that foreign workers are needed to fulfill labour needs MTUC has repeatedly asserted that Government’s action is deliberately aimed to help major corporations to suppress wages and curb trade unions’ pressure for decent work.

The Immigration Department Enforcement Director, Datuk Ishak has now revealed that investors will not want unions to be formed in their establishments. Through outsourcing, it would be difficult for unions to be formed.

Government’s actions are clearly in breach of article 10 of the Malaysian Constitution and makes a mockery of the provisions of the Industrial Relations Act 1967.

In 1998, Government ratified the ILO Declarations on Fundamental Principles and Rights at Work: But their action seem to be in direct contradiction.

The new labour law amendments which came into force since February 2008 compels unions to organize foreign workers in order to secure union recognition but the Immigration Department continue to curb their right to join a union.

This again is seen as a conspiracy between Government and employers to deny union recognition and collective bargaining rights.

(G. RAJASEKARAN)
Secretary General

PRESS STATEMENT - STOP RELYING ON FOREIGN LABOUR (17 JUNE 2008)

“With two million documented foreign workers and countless illegals, employers have clearly become too reliant on foreign labour, Home Minister Datuk Seri Syed Hamid Albar said”.

As reported June 16, 2008

MTUC wholeheartedly welcomes Home Affairs Minister’s efforts to reduce dependency on foreign labour.

MTUC has repeatedly stressed the need to determine the labour market requirements and availability of Malaysians before approving application to recruit foreign workers.

We believe that the immigration authorities who are vested with powers to approve foreign worker recruitment application often bypass the Human Resources Ministry. In fact the Immigration Department, for reasons best known to them, has loosened tight recruitment procedures originally set.

Since 2006 Immigration Department have issued licenses to more than 200 labour suppliers to bring in workers to be hired out to companies for a fee. These labour suppliers make huge profits out of the hard labour of foreign workers: They keep more than 50% of the hiring fee for themselves and very often they do not pay even the daily wage for as long as two to three months.

How do the labour suppliers prove to the Immigration Department that all the foreign workers brought in will have a job to go to? Experience shows that very often the workers brought in do not have a job immediately in the industry for which they got approval.

MTUC urge Human Resources Minister to take advantage of the positive approach of Datuk Seri Syed Hamid Albar and remove all labour suppliers immediately.

MTUC wants to meet with Datuk Seri Syed Hamid Albar to discuss their concern.

(G. RAJASEKARAN )

Secretary General

PRESS STATEMENT - EPF’S CRITICAL ILLNESS INSURANCE SCHEME (10th June 2008)

“Life insurers may gain RM 3 billion from EPF move.” - NST 10/06/08

Malaysian Trades Union Congress is shocked by EPF’s decision to ignore their objections against the proposed critical illness insurance scheme.

On May 7, EPF officers gave a two hour briefing on the mechanism and benefits of the proposed scheme to be managed by selected insurance companies. MTUC conveyed its strong reservation and objections to Datuk Azlan Zainal, CEO of EPF. He assured the MTUC that EPF will not implement the scheme without our agreement.

We are therefore surprised by the announcement by insurance companies which show that EPF has given them the green light to proceed.

Insurers forecast to make a whopping RM 3 billion gain from the scheme is a clear indication that EPF contributors would be short changed.

Ten years ago EPF committed a serious blunder by handing over more than RM 6 billion from the EPF savings to six insurance companies, to manage an annuity scheme.

Following persistent objections the then Prime Minister Dr. Mahathir Mohd personally intervened and directed EPF to disband the scheme. Although the scheme ceased, thousands of EPF contributors lost millions as a result of insurance companies’ decision to impose a 7% service charge.

MTUC will urge the Finance Minister not to approve the scheme. Meanwhile MTUC will also submit a report to the Anti Corruption Agency to investigate whether any impropriety has taken place.

G. Rajasekaran

Secretary General

PRESS STATEMENT - PLANS TO MAKE SOCSO MORE CARING (3RD JUNE 2008)

Human Resources Minister Datuk Dr Subramaniam announced on Sunday (NST June 1, 2008) plans to introduce changes to SOCSO to enable injured and disabled workers to get their benefits without too much hassle.

This is good news for thousand of workers who are made to run around and even deprived of adequate compensation.

Often workers complain that SOCSO spends more time and energy to find fault with injured workers application for relief rather than find ways to assist them.

Socso often appeals against medical officer’s assessment of an injured workers’ disability. Socso utilise workers’ contributions to engage high priced lawyers to challenge workmen’s claims, whereas, more often than not, workmen are not represented to counter SOCSO’s arguments.

Dr Subramaniam has rightly identified the need to have trained staff to man socso counters. Many workers complain that counter staff are intimidating and treat them with contempt.

Trade unions and workers in the country would like to see Datuk Subramaniam’s plans realised soon.

Foreign workers minimum wage and levy

“Deputy Human Resources Minister Datuk Noraini Ahmad said the imposition of levies and fixing foreign workers’ minimum wage came under the Federal Government’s jurisdiction”

NST June 3, 2008

Commenting on Datuk Noraini’s statement, MTUC Secretary General G. Rajasekaran said he was pleased to note that the Federal Government has the authority to determine minimum wages of foreign workers. Unfortunately the Ministry of Human Resources has not exercised such authority.

Is Noraini aware of the widespread exploitation of foreign workers in the country? Thousands are paid as little as RM450 a month?

MTUC is pleased that the State Government of Selangor with the largest number of foreign workers has come forward to regulate the wage rates to a decent level. Ministry of Human Resources should work together to collectively find a solution instead of imposing unreasonable opposition.

PRESS STATEMENT - FIVE FOREIGNERS DIE IN FACTORY FIRE (29TH MAY 2008)

Five foreign workers were killed in a fire that broke out at a furniture factory in Kampung Melayu Subang early Wednesday.

It was reported that the five were among seventeen workers who were living in the factory premises.

Fire Department should investigate why so many workers could not escape.

Malaysian Trades Union Congress (MTUC) urged the Labour Department to ascertain whether the company has covered the employees under workmen’s compensation Act. Labour Department should assist the families of the five deceased workers to get adequate compensation for their tragic loss.

Labour Department should also investigate to find out whether the living facilities at the factory premises were suitable. Did the employer notify the Department of such facilities to enable them to investigate the premises?

An increasing number of employers with foreign workers are compelling them to live within factory premises often under poor condition.

They resort to such practice in order to cut cost on rentals and transportation. Ministry of Human Resources has often highlighted the unhygienic and inadequate living conditions and advised employers to comply with standards required.

PRESS STATEMENT - Demand for a Minimum Wage - A priority issue on May Day 2008

Malaysian Trades Union Congress (MTUC) reiterated that their demand for RM 900.00 minimum wage shall be among the priority issue at the May Day Rally on 1^st May 2008.

For the first time MTUC will hold a May Day Rally together with the State Government of Selangor. Parti Keadilan Rakyat (PKR) in their election manifesto addressed the need for a minimum wage by promising to establish RM 1500.00 as minimum wage.

We are impressed by PKR‘s concern and commitment. Obviously they acknowledged the importance of a minimum wage to eradicate poverty and to raise the standard of living of workers, especially those in the low income bracket.

On May 7^th, 2008 MTUC leaders and union leaders will go to the Parliament to seek the support of all members of Parliament. I am sure that with close to 100 newly elected Parliamentarians, our demands will receive more attention, said MTUC Secretary General G. Rajasekaran.

In the past five years an increasing number of employers have openly adopted anti-union practices and many have ignored Human Resource Minister’s advise to adopt measures to promote harmonious labour-management relations.

Unscrupulous employers are abusing steps taken by our Government to allow greater flexibility in the name of globalization. The 6000 workers attending the May Day Rally will adopt a series of resolution urging MTUC and union leaders to be more persistent.

G. Rajasekaran

Secretary General