Awkward U-turn on minimum wage
Posted on 6 February 2013 - 08:30pm
ON JAN 22, Human Resource Minister
Datuk Seri Dr S. Subramaniam, in responding to calls by certain
quarters for the government to introduce separate wage systems for
locals and foreign workers, pointed out that Malaysia's labour laws must
adhere to international labour standards.
These would mean that our policies do not allow for discrimination of
workers based on race, religion and citizenship. A two-tier wage system
– with different schemes for locals and foreigners – would be
counter-productive as it would induce employers to evade hiring
Malaysians for cheaper foreign workers.
However, just days after Subramaniam made the assertion, MCA
president Datuk Seri Dr Chua Soi Lek issued an ultimatum that jolted the
picture. In effect, Chua expressed support for employers wanting
foreign workers and locals to be differentiated. Specifically, they were
planning to protest against the ministry for requiring them to pay for
the foreign workers' levy.
Claiming that MCA had received many complaints from employers, Chua
warned: "If there is no decision after Chinese New Year, we (MCA) can no
longer hold them back ... We will tell them, do what needs to be done."
The statement ignited a backlash from groups that have stood up for
the rights of migrant workers. Malaysian Trades Union Congress (MTUC)
secretary-general Abdul Halim Mansor described MCA as acting as a
"spokesman" for the wealthy and advocating the demands of industry
bosses.
"Understandably Chua does not care for the needs of workers who slog daily for wages as low as RM500 a month," he said.
The policy and quantum for a minimum wage had been debated for over
three years before a decision was made in March last year, and gazetted
in July, Abdul Halim said. "Chua has just woken up from a long slumber
to issue an ultimatum that the government U-turn on the minimum wage
policy," he said.
Under the policy, the minimum wage is set at RM900 in the peninsula and RM800 in Sabah and Sarawak.
As events unfolded, on Jan 29, about 200 traders and small business
owners claiming to represent 57 business associations, marched to the
Prime Minister's Office in Putrajaya to submit a memorandum calling for
foreign workers to be excluded from the minimum wage policy. They
insisted that the policy was a "slap and a burden" to business owners.
The cabinet the very next day decided that foreign workers will have
to bear the cost of their levy payment. It was, in effect, a U-turn.
Finance Minister II Datuk Seri Ahmad Husni Hanadzlah reasoned that
the move was reverting to a 1992 policy, and argued that it would not be
a burden to foreign workers as they would only need to pay between
RM34.16 and RM154.16 a month, while enjoying a salary increase of
between 30% and 50% to RM 900 a month, from the previous average of
between RM600 and RM700.
But there is indignation and ire over this sudden about-turn that
will not likely subside. The MTUC is submitting an official complaint to
the International Labour Organisation (ILO), calling the reversal in
policy "a great injustice" against migrant workers.
Some 67 trade unions and civil society groups in Asia have called on
the government to rescind the decision, demanding that all
discrimination against workers, based on their nationality, gender and
duration of employment contract, be immediately stopped.
Irene Fernandez, executive director of migrant rights group
Tenaganita, said the move effectively catapulted migrant workers as the
highest taxpayers in terms of income and levy, despite them being
allegedly deprived of "benefits" from the taxes.
"Assuming all migrants will earn the minimum wage of RM900, the levy
deductions will range between 5% and 17% a month. On the other hand a
Malaysian needs to pay taxes only when they earn more than RM3,000 per
month," she said.
Tenaganita has pointed out that migrant workers have to pay
exorbitant medical bills, their children cannot go to school; and they
are also excluded from safety nets such as the Employees Provident Fund
and the social security scheme.
All things considered, it is the question of how the government ended
up making such a U-turn that will linger, helped in no small measure by
Chua's ultimatum to the ministry – and the minister's own assurance
that the country must abide by "international labour standards".
Himanshu is theSun's news editor. Comments: letters@thesundaily.com - The SunDaily, 6/2/2013, Awkward U-turn on minimum wage
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