Employers

However, the employers are therefore not held responsible for the workers. The then head of the enforcement unit of the Immigration Department, Datuk Ishak Mohamed, declared publicly that outsourcing is a strategy to attract foreign direct investment (cited from SOMO, 2012, p. 23). In 2012, the amendment of the Employment Act 1955 granted the employer, as labour supplier, the role of contractor of labour. The government was challenged by Malaysia Trade Union Congress, as the strongest opponent of the change, and the concept is only actually applied in the construction and plantation sector. The role of labour contractor is a longstanding one in the construction and plantation sectors, and the authors point out that the government can monitor the registration of workers via the legalised outsourcing agencies who act as the ‘employers’ of the workers (Hassan, Lee,

& Ismail, 2013). The outsourcing companies’ services was terminated at the end of 2013 due to complaints of workers’ rights abuses but the existing workers under outsourcing agents will remain until their work permit expires.²⁰ Companies and farms are hence needed to hire the foreign workers directly from their countries of origin. However, Guardian²¹ reported that the practices of hiring foreign labourers through labour outsourcing companies to high-technology production lines owned by international companies based out of Malaysia have been continued.

– indicating that there is no local interest in filling the vacancy – are they then allowed to recruit foreign workers. Employers are mainly permitted to recruit workers from 15 countries.²² Employers apply for foreign workers through the Technical Committee for Recruitment of Foreign Workers,²³ known as the Technical Committee for short, which was formed as the implementing agency to process the application of foreign workers, with the exception of domestic workers. Once approval is granted, the employers are allowed to bring in workers by three methods: first, by direct employment through a company, which means the employer deals directly with the authorised bodies in the origin country ; second, via indirect employment by a company or individual through a recruitment agency, for the services of which the employers pay a one-time fee; third, through the outsourcing system which was introduced in 2005, which involves paying the agents directly for taking responsibility to recruit and manage the workers during the duration of employment. With the first and second methods, having found the workers, the employers returned to the Immigration Department to convert the calling visa and gain a work permit for the employee. Employers can renew the work permit for workers for five years, and the employment contract can be renewed for up to maximum of five years for the five formal sectors: plantation, construction, services, manufacturing, and agriculture. In contrast, the contract for domestic workers has an unlimited potential for extension. Furthermore, employers are constrained by rules that allowed them to recruit workers only from certain countries: The Indonesian (male) workers are allowed to work in all sectors except manufacturing sector; the Indonesian (female) workers are allowed to work in all sectors. Only male workers from the Philippines can work in all five sectors;

Indian male workers can only work in the services sector (restaurants), construction (high-tension cables), agricultural and plantation sectors. Bangladeshi workers are only allowed to be recruited in the plantation (oil palm) sector.

22 Thailand, Cambodia, Nepal, Myanmar, Laos, Vietnam, Philippines, Pakistan, Sri Lanka, Turkmenistan, Uzbekistan, Kazakhstan, India, Indonesia, and Bangladesh (Source: www.imi.gov.my, viewed 8 June 2016) 23 This committee consists of representatives from eight government departments, of which the most important ones are the Department of Immigration, Department of Human Resources, and the Department of Labour.

The mode of recruitment has been changed back and forth between the government department and the recruiting agencies: Briefly, in the early 1980s, with the legislation of the Private Employment Agencies Act 1981, the employers dealt with recruitment agencies in order to find prospective workers. Employers were therefore handing over the administrative paperwork and logistics to recruitment agencies. In most cases, the majority of the prospective employers paid upfront costs on behalf of the workers to the recruitment agencies, and the employers would deduct the transaction costs from workers’

wages (Kanapathy, 2006). This was to facilitate the easier migration of workers by reducing the upfront costs they had to pay. However, the employers were only allowed to take on the recruitment agencies as their ‘consultants’ to handle paperwork when the government disbanded all employment agencies in 1995. This was due to the unethical practices of unlicensed agents who were found guilty of charging exorbitant fees and other abusive practices regarding migrant workers.²⁴ The Immigration department played a central role in recruiting foreign workers directly from their source countries by setting up the Special Task Force on Foreign Labour²⁵ in order to take over the role previously played by recruitment agencies. The Task Force was composed of representatives of various Ministries (the most important ministries are the Ministry of Home Affairs, Ministry of Human Resources, and Labour Department). However, employers were reported in news for having continued to use the services of unathorised agents to recruit foreign workers due to their cheaper cost and faster services compared to the licensed employment agencies. Unfortunately, employers were frustrated with the delays in the delivery of work permits as administered by the newly formed Special Task Force on Foreign Labour (Kaur, 2008; Mascareñas, 2012). In 1996, the responsibility for foreign workers was returned to the Foreign Workers Division of the Immigration Department, Ministry of Home Affairs (Tan, 1997).

24 An average of 3,000 workers per year were brought in by unlicensed labor recruiters and agents, who were found guilty of charging the workers exorbitant fees, providing misleading information about wages, and other abuses. (See Kanapathy, 2006:8)

25 The former Cabinet Committee on Foreign Labour established under the Ministry of Human Resources was dissolved.

2.1.2.2 Roles and Responsibilities for Workers

Upon arrival, the prospective workers have to be brought for the second medical examination conducted by FOMENA.²⁶RM 180 (Euro 42) is charged for male and RM 190 (Euro 44) for female workers. If a worker should fail, the examination the prospective employer will have to apply for a replacement directly at the Immigration Department.

Once the worker passes the medical examination, the employer will ask the worker to sign an employment contract, stating the basic wages, terms and conditions of employment, which has been approved by the authorities (Dairiam, 2006; Kassim, 2002). However, it has been found that some conditions in the contracts contradict labor laws, as the employers make their own contracts with workers with regard to wages, duties, leave etc (Kassim, 2001). Prior to the implementation of the Minimum Wages in 2013, the wages for workers were based upon market forces. The Employment Act (amendment) 2012 also requires the employers to open a bank account for workers. In addition, the Workers’

Minimum Standards of Housing and Amenities Act 1990 underlines the responsibilities of employers to provide proper living conditions, including e.g. sufficient water and electricity for workers. Employers who fail to follow the rules are punishable, facing a fine of up to RM 2,000, with an additional RM 100 per day if the wrongdoing continues.

In the latest development, the employers proposed to the government that permission be given for foreign workers to pay for their own transport and housing costs.²⁷ Employers are permitted to deduct not more than RM 50 (Euro 11.70) from the wages of workers on a monthly basis for the accommodation costs of the latter. On 9 April 2013, the Minister of Human Resources issued directive that allow employers to deduct accommodation costs (Kebenaran Am Potongan Daripada Gaji Pekerja (Seksyen 24 Akta Kerja, 1955).

26 The medical examination ensures that workers are free from all types of diseases: HIV/AIDS, tuberculosis, leprosy, Hepatitis B, psychiatric illness, epilepsy, cancer, sexually-transmitted diseases, malaria, hypertension, heart diseases, bronchial asthma, diabetes mellitus, peptic ulcer, and kidney diseases. Urine is tested to detect the presence of cannabis or opiates, and women are tested for pregnancy (FOMEMA, 2014).

27 The terms and conditions for employing foreign workers have underlined the responsibility of the employers for the provision of free accommodation, transport, medical, electricity and water for foreign workers (The Star Online, 2013).

Further, the Workmen’s Compensation Act 1952 states that it is mandatory that employers apply to the Ministry of Health for insurance policies for their employees. The medical insurance policy covers the hospitalisation of workers, and costs RM 120/ Euro 29 yearly per worker. Under the Passport Act 1964, employers are not allowed to withhold workers’

passports. A number of studies pointed out that employers sometimes witheld workers’

passports to prevent workers from running away, and then told them to sign employment contracts that deprived them of the right to the same treatment as local workers with regard to pay and other benefits, as set out in the national labour laws (Devadason & Chan, 2014;

Kassim, 2001). The employers must apply for work permit renewal three months prior to the expiry date of the previous permit. Employers will pay for flight tickets of workers if they have fulfilled their employment contract. In times of economic crisis, for instance in 1997 and 2008, foreign workers’ contracts were the first to be terminated because the employers are not allowed to terminate the contract of service of a local employee in order to employ a foreign worker (section 60 M). Employers pay for workers’ passage back to their home countries when their contract is terminated.