Just how much profit is enough?


Employers must be real entrepreneurs and be innovative in creating values, not destroying them by wicked means and denying workers of their statutory rights.

THIS week represented a case of a construction worker who was dismissed summarily and told to leave the workplace immediately.

His crime? For filing a complaint that his employer did not pay EPF contribution.

It is just sad that there are still employers who exploit their workers through many ways and means.

The EPF contribution is not a benefit — it is a basic and statutory provision for retirement savings and old age protection when a worker retires. The current rate is only 12-13 % contribution from the employer. By comparison, Singapore employers have to pay 16%.

By dismissing the worker, the employer was — in a way — threatening other employees against reporting about the situation.

This is blatant exploitation, not an oversight.

Moreover this is not a small-time employer, but the developer of a multi-million ringgit shopping centre in the city.

It didn’t even have the decency to rectify their error and make good the payment. Instead it took away the livelihood of the poor worker.

I call on EPF to initiate full and comprehensive investigation into all construction sites in Sarawak and to prosecute those breaching the laws. There is a provision in the Employees Provident Fund Act to enable the authorities to go after the directors personally.

More importantly I’d like to advise all workers that it is their fundamental rights — guaranteed by law — to have employers making EPF contribution for them.

I am also aware of some employers who extract an agreement from their cash-strapped workers to forgo EPF contribution on the excuse that the workers themselves do not have to contribute their share as well.

I understand that lowly paid workers need every sen of their salary every month and cannot afford to worry about their retire-ment.

Still it is inhumane for employers to take advantage of their employees by literally cheating their workers of the EPF contribution.

I have also seen elaborate contracts drawn up by “mercenary” lawyers to disguise the employment relation as a contractor of labour to avoid EPF payment.

Such means is especially prevalent in the timber industry. I have spent years arguing against the practice until the Industrial Court and Socso Appellate Board finally held that employers should not rely on such creative contracts to escape from their statutory obligations.

I am advising the worker (as referred earlier) to file for unfair dismissal and to claim reinstatement with full wages, of which the law provides for a maximum of 24 months’ back wages plus compensations, usually one month for every year of service.

Since we are on construction industry, I also want to take issue with Sarawak Housing and Real Estate Developers Association (Sheda) over its claims that the price of houses in the state is expected to climb higher following the passing of Housing Developers Bill 2013 (HDA) during the State Legislative Assembly last November.

Sheda president Zaidi Ahmad claimed that the new law had caused unnecessary costs, which would be passed on to house buyers,

Using cars as an analogy, he said the new Bill was akin to cars sold in Sarawak having to be fitted with 30 airbags whereas those in the peninsula only had to be installed with six.

I would say that housing developers in Sarawak have had it easy for far too long.

The HDA has long been anticipated. Peninsular Malaysia has had a similar legislation for decades.

House prices in Sarawak are way higher than those in the peninsula even before the HDA.

So please don’t use the Bill as another excuse to raise house prices.

Housing Minister Datuk Amar Abang Johari Tun Openg, when tabling the Bill last year, said it was necessary and appropriate to review the existing laws in totality in order to provide a more stringent licensing, enforcement and compliance mechanisms.

Sheda viewed that the HDA was not necessary for Sarawak as it would only increase the compliance cost, in turn raising house prices.

I just don’t buy Sheda’s ludicrous claims that among the factors that could lead to house price hike would be the increase of Real Property Gains Tax (RPGT) as announced in Budget 2014.

RGPT is acknowledged by most experts as a useful mechanism to curb speculation so as to contain price increases.

To say that it will increase house prices just shows how self-serving Sheda is.

The association also disagreed that current house prices in Kuching were inflated and that the overall property market was in a bubble.

“The overall price house index in Sarawak is 175.3-point, an average increase of only 5% yearly with an average price of RM316,000.

“On the other hand, property developers only enjoy on average a 10-15% profit margin depending on locality and cost of land.

“With the lengthy process and associated risks, the current margin is definitely not attractive and also less attractive than most other trades,” Sheda said.

Maybe I should thank Sheda for highlighting that other trades made more than 10-15% profit.

Licensed moneylenders make 18% and loan sharks make much more.

Sheda claims effectively debunked those made by employers saying that 600,000 small and medium enterprises (SMEs) with profit margin of less than 4%, could not afford to pay minimum wage and would go bankrupt.

Well, it’s January 2014. The minimum wage policy is being fully implemented.

So far, I don’t see any SME going bankrupt.

So stop the fear mongering.

Employers must be real entrepreneurs and be innovative in creating values, not destroying them by wicked means and denying workers of their statutory rights.

It is just not good business to destroy opportunities for other businesses.

The progressive businessman/entrepreneur is the one who sees our millions of low-paid workers as “customers” to be cultivated; not as “costs” that can be cut.

Increasing wages and benefits will put more money into workers’ coffers and into the economy.

This will create more demands and consequently, more businesses — which means more rentals and presto, more shopping centres!

  • The views expressed are entirely the writer's own



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