LABOUR protection in Malaysia has evolved to provide various forms of protection for workers, with extended support for foreign workers and improvements to existing benefits.
The Social Security Organisation (Perkeso) not only provides social protection to cover, among other things, mishaps and income replacement, but also implements employment services.
Under amendments to the Employment Act 1955, the Department of Labour of Peninsular Malaysia (DLPM) has improved the protection of workers while ensuring that their welfare and well-being is prioritised.
While it is responsible for human capital development and supporting under-served communities, the Human Resource Development Corporation (HRD Corp) is, as of March 2021, covering more sectors that include agriculture, tourism and healthcare.
Perkeso strives for inclusive social safety net
Perkeso’s social security coverage has been extended from workers in the formal sector to foreign, domestic and self-employed workers and recently, housewives.
Being the country’s national employment services provider, Perkeso’s tasks include planning and executing active labour market policies that include unemployment insurance benefits as well as job search assistance and placement services.
In trying to ensure that all foreign workers are protected under the Employees’ Social Security Act 1969 (Act 4), Perkeso is faced with challenges such as lack of awareness among employers especially among the small and medium scale enterprises (SMEs), said Perkeso.
Due to the communication barrier, foreign workers may not know how to go about making a report to Perkeso if they are not registered with Perkeso.
In the delivery of Perkeso benefits to families of foreign workers abroad, upon the death of these workers, it may be a challenge to locate the families or ascertain that the benefits go to eligible recipients.
Perkeso’s foreign workers division conducts regular engagements and seminars with employers and foreign workers on the awareness of workers’ rights to social security protection.
Annual nationwide enforcement action under Ops Kesan, is implemented to identify employers who have not registered their local or foreign workers.
A grace period prior to that, under Bulan Pemulihan, is extended to employers who have not registered their workers with Perkeso, where they will not be penalised.
From May 1 till June 30, 2023, a grace period of two months is given to employers to register their workers with Perkeso, thus allowing them time to get back on their feet following the Covid-19 crisis.
Come Ops Kesan in July, 2023, there will be no compromise with errant employers, who will no longer be exempted from compounds, prosecution or interest on late payment of contributions, said Perkeso.
DLPM strategises to enforce labour laws
The DLPM enforces labour laws through statutory inspections conducted by labour inspectors, and those found in breach of these laws are penalised through compounds or prosecution.
The various legislations include the Employment Act 1955 (Act 265), Children and Young Persons (Employment) Act 1966 (Act 350), Employees Minimum Standards of Housing, Accomodations and Amenities Act 1990 (Act 446) and other related laws.
The labour legislation in this country does not discriminate against local and foreign workers, said the DLPM.
The recently enforced amendments to Act 265 seeks to increase protection for foreign workers with:
> The requirement under Section 60K of Act 265, that prior approval must be obtained from the director-general of labour, Peninsular Malaysia, before employing foreign workers.
This will enable the department to monitor the employment of foreign workers more effectively, against activities such as human trafficking and forced labour.
> The prohibited practice of forced labour at the workplace, under Section 90B of Act 265, as part of the ongoing effort to combat any form of forced labour practices in the workplace.
This is one of the efforts to address exploitation of labour, whether involving local or foreign workers.
The DLPM has been listed as one of the enforcement agencies under the Anti-Trafficking in Persons and Anti-Migrants Act (ATIPSOM) 2007 since 2010, as part of an effort to combat human trafficking as well as issues relating to labour exploitation and forced labour.
Approaches in enforcement include statutory labour inspections, joint inspections with various agencies, joint enforcement operations with enforcement agencies under ATIPSOM, inspection for the purpose of foreign workers’ applications and quarterly meetings of the enforcement committee.
However, the main challenge faced is the lack of enforcement officers; with the amendments, all employees come within the jurisdiction of the department but the number of officers remains the same, said the DLPM.
Among the amendments to the First Schedule of the Employment Act 1955 (Act 265), the definition of an employee has been amended to ‘any person who has entered into a contract of service.’
This extends the coverage of Act 265 to all private sector employees, regardless of the level of wages or type of employment, compared to the previous coverage which applies only for private sector employees earning RM2,000 and below per month.
Other amendments include the increase in maternity leave from 60 to 98 days; the reduction in the number of working hours from 48 to a maximum of 45 hours a week; the separation of sick from hospitalisation leave; the payment of wages through employees’ bank accounts and registered financial institutions; and the increase in the general penalty from RM10,000 to RM50,000.
New provisions include prohibition of discrimination, restriction on termination of pregnant female employees, flexible working arrangements, notice on sexual harassment and paternity leave.
Under presumption of employee, the relationship between employer and employee should be clarified; the court order for payment due to employee is to enable the court to issue an order to the employer who has been convicted with offences relating to the payment of wages, to pay any payment due to the employee.
A formula for the calculation of wages is also provided for the employee who is unable to complete a whole month of service.
Upskilling and reskilling initiatives by HRD Corp
With the rapid pace of advancement and digitalisation, the workforce needs to continuously upskill and reskill to stay relevant and adapt to changes.
One of the key challenges facing the Malaysian workforce is the mismatch between skills required by the job market and skills possessed by employees, said HRD Corp chief executive Datuk Shahul Dawood.
HRD Corp has worked with other government agencies and ministries, subject matter experts and industry associations to develop the industrial skills framework document that outlines jobs, career pathways, skills, qualifications and certifications required for jobs in various industries.
There are 11 industrial skills frameworks documents for, among others, the oil, gas and energy, warehousing, hospitality, digital technology, higher education, aerospace as well as wholesale and retail sectors.
HRD Corp also focuses on the transformation of HR and the use of technology.
By adopting new technologies and digital tools, HRD Corp is able to offer hybrid training programs that blend online and offline learning, making it easier for employees to access training and upskilling opportunities at their own pace and convenience.
To promote sustainable learning, an elearning platform called e-LATIH allows users to participate in training anytime and anywhere with a mobile device.
As of March 2023, a total of 280,000 registered users have joined the 1,700 courses available on e-LATIH, with usage of over 790,000 times.
HRD Corp is also looking at uplifting SMEs to ensure that their employees have the necessary skillsets to satisfy the future demands of industry.
More than 97% of businesses in Malaysia are in the SME category where there are also over 90% of registered employers.
HRD Corp has introduced the SME development program to support the development and productivity of SMEs by collaborating with international elearning partners to enhance the skills and capabilities of their workforce.
Through RiSE4WRD for industry4WRD, the digital transformation of businesses including SMEs has been accelerated via the funding of training courses in connectivity, automation, cyber security, Internet of Things (IoT), cloud computing, big data, advanced simulation, autonomous systems, universal integration, augmented reality and additive manufacturing or any relevant technology.
The National Training Week 2023 initiative in Malaysia (May 22 to 26) contributes to labour protection by improving the skills and employability of workers, creating safe working conditions and providing workers with access to information on their rights and entitlements.
As our economy advances, labour practices and protection will continuously be improved.