Address deteriorating workers’ rights during COVID-19 pandemic

PRESS STATEMENT 24TH NOVEMBER,2020 –PARTI SOSIALIS MALAYSIA.

Parti Sosialis Malaysia (PSM) is extremely concerned that, while workers’ rights in Malaysia had already been under threat during challenging pre-covid-19 economic conditions, workers’ rights have further deteriorated since the global covid-19 pandemic set in during the first quarter of 2020. In particular, PSM notes the following:-

  1. Many workers (741,600 as August 2020 ,reported by DOSM) have lost their jobs, mostly through retrenchments, since the first lockdown on 18 March 2020. There have been instances of forced resignations where workers were pressured to sign resignation letters, thus rendering them “ineligible” to retrenchment benefits or any other forms of compensation. In addition there have been – and still are – instances of workers forced to take pay cuts and/or no-pay leave, subjecting them to severe hardships resulting from their loss in income. At the same time, PSM notes that many senior executives have not been seen to make the same sacrifices expected of their lower paid colleagues. Furthermore there have been no indications that senior government officials, including ministers, have not been seen taking any pay cuts or reductions in benefits to help the country weather the covid-19 storm. The concept of “leadership by example” seems to be seriously absent.
  2. The national minimum wage of RM1,200 a month, which was increased by RM100 in February 2020, remains at a very low level that does not reflect the high cost of living in Malaysia, especially in the Klang Valley. This is more troubling when the Malaysian Government’s own Department of Statistics announced on 10 July 2020 it had revised the country’s Poverty Line Income (PLI) from RM980 to RM2,280, below which households would be able to obtain and maintain adequate food, shelter and clothing. This revised PLI means there are now over 400,000 households in Malaysia living in poverty.
  3. Contract cleaning workers without long-term job contracts who work in government hospitals and schools often feel a high level of job insecurity under very difficult working conditions with resultant anxiety and social problems. PSM questions how much the Government is really saving by outsourcing such critical services, and questions if such contracts are awarded in an open and transparent process. Furthermore contract workers do not enjoy similar benefits to those on indefinite-term contracts. This brings into serious question the need to outsource cleaning contracts to companies who adopt highly questionable employment practices, especially considering the need for such services on a long-term basis.
  4. Current corporate tax in Malaysia stands at 24% (the same as Laos). In ASEAN, only Indonesia (25%), Myanmar (25%) and Philippines (30%) have higher rates, while Cambodia (20%), Singapore (17%), Thailand (20%) and Vietnam (20%) have lower rates. In its quest for tax-competitiveness, Malaysia has compromised on an equitable tax structure that would otherwise ensure fair distribution of income but instead aggravated income inequality.

In view of the above, PSM strongly urges the federal government to act as follows:-

  1. Ensure stronger enforcement of existing labour laws, while holding boards of directors responsible for any unfair labour practices. While the Employment Act has many enforcement provisions, but the performance of the Jabatan Tenaga Kerja designated to carry out enforcement has been appalling. It’s disturbing to note that, even local councils would have reasonable number of enforcement officers compared to this department under the Federal Government. The Jabatan Tenaga Kerja Wilayah Persekutuan have only 20 or so officers whom have to do multiple task such as JTK complaints, counter duty, chairing labour court hearing, writing judgements, management task , inspection to work sites and enforcement!
  2. The tripartite 1975 Code of Conduct for Industrial Harmony, signed between the government, trade unions and employer associations, states that “Insecurity of employment and fear of the consequences of redundancy and retirement have a major influence on attitudes to work and good industrial relations”, but based on recent high numbers of contract workers, the Code of Conduct seems to be a forgotten document and needs to be reinforced. As such, the Federal Government needs to re-examine its outsourcing practices and the need for fixed term contracts while ensuring cost savings in the process.
  3. Revise the national minimum wage to a higher level more reflective of the PLI above.
  4. Revise the existing tax structure to reduce income inequality. Any losses in tax revenues will be more than covered by cost savings from an open and transparent tender process while reducing waste through rampant corruption and excessive expenditure.

Workers’ Bureau
PSM Subang.

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