Groups: Hefty fine will ‘kill’ industry

Under the spotlight: A man walking at a workers hostel in Petaling Jaya. — AZLINA ABDULLAH/The Star

PETALING JAYA: The authorities’ sudden decision to impose a hefty RM50,000 fine on employers for every foreign worker found staying in overcrowded units has caused shockwaves among industry players.

Federation of Malaysia Manufacturers (FMM) said the Human Resources Ministry had already given them deadline until March next year to comply with Act 446 on the Employees’ Minimum Standards of Housing, Accommodations and Amenities.

Therefore it came as a shock when Senior Minister Datuk Seri Ismail Sabri Yaakob announced that a penalty of RM50,000 per head would be imposed effective Thursday in a move to reduce risk of Covid-19 transmission among foreign workers staying in overcrowded spaces.

FMM president Tan Sri Soh Thian Lai said employers needed time to make the necessary changes, including for renovation and application for a permit to convert non-residential spaces to dwelling enclaves.

“Employers are making the necessary adjustments, and are in the process of carrying out the necessary changes to comply with the regulations, ” he said.

“(But) this sudden change of policy (to take punitive action) appears to show lack of communication among government agencies.”

Soh said FMM had written to the Human Resources Minister Datuk Seri M. Saravanan in August, and met him in early September to request for a 12-month grace period for companies to undertake the extensive adjustments following the requirements of the law before the authorities impose punitive action.FMM had obtained feedback from members nationwide on the various challenges faced.

Many local councils were not prepared with standard guidelines, procedures and definite timelines to assist the industry with the required approvals or endorsements needed as a pre-condition to apply for the Certificate for Accommodation from the Labour Department.

This was the main reason for the delay, said Soh.

“The other obstacle faced is the lack of suitable accommodation, as there are limited hostels available.

“And converting shoplots to dwelling space would take time, especially with the additional cost incurred to renovate the area following the specifications outlined in the regulations, apart from meeting other requirements by the local authorities, ” he said.

Soh said residents had also objected to attempts to house foreign workers in many residential areas close to industrial estates.

“Most companies are currently juggling their operations towards business recovery while trying their best to adhere to this legislative requirement to readjust the living quarters for their workers, ” he said.

Given all the setbacks, FMM hoped the authorities would reconsider imposing penalty during the requested grace period.

Companies would instead implement a detailed action plan to showcase their commitment to comply with the regulations within the stipulated deadline.

“We suggest that the next 12 months period be used to continually educate the industry, and for the authorities to issue a notice of non-compliance if they failed to make the necessary improvement within a given timeframe.

“As long as there is a firm commitment to implement action plans within a specified timeframe to comply with the regulations, the government should not penalise the industry, ” he said.

SME Association of Malaysia president Datuk Michael Kang said the authorities should engage all stakeholders to understand the underlying problems before resorting to punitive action.

“Imposing such a hefty fine will only kill the industry, ” he said.

“The mid-tier companies said they could afford to provide better accommodation for foreign workers. But the majority can’t. And most of the employers could not comply with such short notice.”

Malaysia Employers Federation executive director Datuk Shamsuddin Bardan also concurred that the employers would “die” faster if the hefty RM50,000 fine were to be imposed for every foreign worker staying in crowded units.

“It is a very expensive price to pay, especially given the current challenges. Why burden the employers further with additional cost during such challenging times?

“Under the Act, only six foreign workers can stay in a 1,500 sq ft unit. But many locals are staying in units measuring less than 1,000 sq ft, ” he said.

“We do not want to flout any rules, but let’s give employers more time.”

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