REGIONAL SYMPOSIUM ON DEPLOYMENT OF WORKERS OVERSEAS: A SHARED RESPONSIBILITY DHAKA, BANGLADESH: 15-16 JULY 2008

1. REGIONAL SYMPOSIUM ON DEPLOYMENT OF WORKERS OVERSEAS: A SHARED RESPONSIBILITYDHAKA, BANGLADESH: 15-16 JULY 2008 By M. VIVEKANANDAN GENERAL MANAGER INDUSTRIAL RELATIONS MALAYSIAN EMPLOYERS FEDERATION (MEF)

2. MAP OF SOUTH-EAST ASIA MALAYSIAN EMPLOYERS FEDERATION

3. MAP OF MALAYSIA 14 States 3 Federal Territories - Kuala Lumpur - Putrajaya - Labuan MALAYSIAN EMPLOYERS FEDERATION

4. DEMOGRAPHIC STATISTICS MALAYSIAN EMPLOYERS FEDERATION

5. GROSS DOMESTIC PRODUCT (GDP) 2000-2008 Malaysia economic growth 2000-2008 2000 8.5% 2001 0.3% 2002 4.4% 2003 5.4% 2004 7.1% 2005 5.3% 2006 5.9% 2007 6.3% 2008 5.0-6.0%P MALAYSIAN EMPLOYERS FEDERATION

6. GROSS DOMESTIC PRODUCT (GDP) BY SECTOR (2006-2008) MALAYSIAN EMPLOYERS FEDERATION

7. EMPLOYMENT BY SECTOR    MALAYSIAN EMPLOYERS FEDERATION

8. MALAYSIA: LABOUR MARKET STATISTICS MALAYSIAN EMPLOYERS FEDERATION

9. FOREIGN WORKERS Number of foreign workers 2005 2006 2007 (May) 1.6mil. 1.7 mil. 1.9mil. Source Countries: Indonesia (69.4%) - 1.2 mil. Nepal (10.2%) - 199,962 India (6.2%) - 130,768 Vietnam (4.6%) - 96,892 Engaged in: - manufacturing 31.1% - plantation 26.9% - services 26.5% - construction 15.5% MALAYSIAN EMPLOYERS FEDERATION

10. EMPLOYMENT OF FOREIGN WORKERS Labour shortage prompted Malaysian Government to allow private sector to employ foreign workers in the following sectors: - Manufacturing - Agriculture/Plantation - Construction - Services MALAYSIAN EMPLOYERS FEDERATION

11. FACTORS ATTRACTING FOREIGN WORKERS TO MALAYSIA THE PULL FACTORS Better economic performance and prospects Offers higher wages and opportunities compared to homeland Shortage of workers especially in the agricultural sector and 3D jobs (dangerous, dirty and difficult) Due to greater industrialisation, urbanisation of economy and higher education levels. MALAYSIAN EMPLOYERS FEDERATION

12. COST OF EMPLOYING FOREIGN WORKERS Fixed cost – Transportation (air ticket – depends on destination. Eg: Viet Nam Annual Recurrent costs: Ringgit - Annual medical check-up at Fomema registered clinics 190.00 Accommodation (including furniture, water & electricity) 1,200.00 Transport allowance 552.00 Visa(PLKS) 60.00 Levy (manufacturing/service/construction) 1,200.00 Levy (Plantation) RM 360.00 Multiple entry visa 15.00 Processing fee (plantation RM10) 50.00 Bank Guarantee (deposit) 250.00 Foreign Workers’ Compensation Scheme 96.00 Medical (annual average per worker) 150.00 Other incidental costs 50.00 TOTAL COSTS : (excluding plantation) 3,813.00 MALAYSIAN EMPLOYERS FEDERATION

13. EMPLOYMENT OF FOREIGN WORKERS Proof of efforts to recruit local employees before approval given to recruit foreign workers MALAYSIAN EMPLOYERS FEDERATION

14. APPLICATION PROCEDURES FOR FOREIGN LABOUR Effective 1 August 2005, application for foreign labour is submitted to a One-Stop Centre located in the Immigration Department of Malaysia. MALAYSIAN EMPLOYERS FEDERATION

15. Continue Officers from the following agencies are working full time in the One-Stop Centre. Ministry of International Trade and Industry Ministry of Human Resources Ministry of Agriculture and Agro-based Industry Ministry of Plantation Industry and Commodity Construction Industry Development Board MALAYSIAN EMPLOYERS FEDERATION

16. Continue Approval letter will be issued after the employer has paid the levy within two days. Approval letter is issued in two conditions - Application with workers bio-data . will be processed and approved . employer will pay the levy . approval letter will be issued MALAYSIAN EMPLOYERS FEDERATION

17. Continue Application without workers bio-data . Being processed and given approval with conditions . To obtain approval, employer must bring a copy of the foreign workers passport to the One-Stop Centre within two weeks before the arrival of foreign workers. MALAYSIAN EMPLOYERS FEDERATION

18.  APPLICATION FOR REPLACEMENT OF FOREIGN WORKERS The Committee on Replacement of Foreign workers has been dissolved and any arrangement on replacement of foreign workers, employers must submit the application to One-Stop Centre at Ministry of Home Affairs. MALAYSIAN EMPLOYERS FEDERATION

19. REPLACEMENT OF FOREIGN WORKERS UNDER ONE-STOP CENTRE In case of recruitment of foreign workers has been approved and did not turn up and any replacement must be submitted to Ministry of Home Affairs for approval by bringing in the relevant documents. MALAYSIAN EMPLOYERS FEDERATION

20. ENTRY OF FOREIGN WORKERS UNDER ONE-STOP CENTRE Foreign workers approved under One-stop Centre of Ministry of Home Affairs are allowed to entre Malaysia through KLIA and other entry points for workers from Thailand and Indonesia must apply Multiple Entry Visa/Single Entry Visa from Malaysian Embassy abroad. MALAYSIAN EMPLOYERS FEDERATION

21. EMPLOYMENT OF VIETNAMESE WORKERS Vietnamese workers are employed in following sectors: - Construction - Manufacturing - Plantation/agriculture MALAYSIAN EMPLOYERS FEDERATION

22. Continue SERVICES: - Restaurants - Laundry - Cleaning/sanitation - Caddy - Resort Islands - Welfare homes - Cargo - High tension cable - Indian only No Vietnamese : - domestic maid - foreign nurses MALAYSIAN EMPLOYERS FEDERATION

23. ELIGIBILITY/CRITERIA EMPLOYMENT FOREIGN WORKERS Foreign worker initially allowed to work for 3 years only and upon application be extended from year to year to the fifth year. Extension after fifth year, employer must obtain from National Vocational Training Council (NVTC) or Construction Industry Development Board (CIDB) that the particular worker is a skilled worker. MALAYSIAN EMPLOYERS FEDERATION

24. Continue Foreign worker must obtain either Malaysian Skills Certificate level I & II or Skilled Workers Certification from NVTC, or, Skills Proficiency Certificate or Skilled Foreign Workers Certification from CIDB Source: Immigration Dept. MALAYSIAN EMPLOYERS FEDERATION

25. TERMS AND CONDITIONS AND CRITERIA FOR APPROVAL TO EMPLOYER TO HIRE FOREIGN WORKERS SET BY IMMIGRATION DEPARTMENT 1.Certificate from the Human resource to the effect that the Malaysian employer has availed himself of the Job Clearing System (JCS) to recruit workers locally. 2. Furnish particulars of foreign workers to Labour Department within 14 days under section 60K of EA 1955. MALAYSIAN EMPLOYERS FEDERATION

26. Continue 3. Contract of Service for same job category. The Contract of Service must embody the terms and conditions currently applicable to local as well as foreign workers for the same job category. MALAYSIAN EMPLOYERS FEDERATION

27. Continue 4. Induction courses for foreign workers brought in to Malaysia: - Only foreign workers who have passed the Induction Course and recognised by NVTC will be allowed to be brought into Malaysia. - Foreign Workers Orientation Course in Malaysia. Compulsory for all foreign workers brought in between 1/1/2004 and to date. MALAYSIAN EMPLOYERS FEDERATION

28. Continue 5. Foreign workers Compensation Insurance Scheme (SPPA). Under Workmen Compensation Act 1952, employer must ensure that foreign worker is insured with an insurance company appointed to the panel of Foreign Workers Compensation Insurance Scheme (SPPA) 6. Certificate of Registration of Foreign Worker under section 60K of EA 1955 ( Require when applying for additional foreign workers) 7. Payment of Levy for work permit Source: Immigration Department MALAYSIAN EMPLOYERS FEDERATION

29. RECRUITMENT AGREEMENT BETWEEN MALAYSIAN EMPLOYER AND FOREIGN RECRUITING AGENCY (RECRUITER) Malaysian employer will sign an agreement with the recruiter, an experienced, capable and licensed in the foreign country who will undertake the role and function of manpower programmer in Malaysia. MALAYSIAN EMPLOYERS FEDERATION

30. CONTENTS OF RECRUITMENT AGREEMENT BETWEEN MALAYSIAN EMPLOYER & RECRUITER Services of the Recruiter - Supply qualified and suitable manpower for employer based on the requirements stated in demand letter. - Recruiter will arrange transportation services from country of origin. - Recruiter will select workers with requisite skills and talents and also in good physical and mental health. MALAYSIAN EMPLOYERS FEDERATION

31. Continue - Recruiter to ensure foreign workers is clear of criminal and misconduct records - Recruiter must be competent to carry its duties and obligations. Source: Recruitment Agreement between Malaysian Employer and Recruiter from Indonesia MALAYSIAN EMPLOYERS FEDERATION

32. RESPONSIBILITIES OF MALAYSIAN EMPLOYER Responsible for completing all necessary traveling documents as required by Malaysian Government. Employer shall pay for return transportation cost for foreign workers upon completion of employment contract. In case of termination of employment contract as a result of death or serious injury, employer need to inform recruiter cause of termination (in case of death and if employer has paid expenses in advance employer shall seek repayment under workmen compensation insurance or similar labour insurance scheme). MALAYSIAN EMPLOYERS FEDERATION

33. Continue Malaysian Employer shall provide foreign workers the following: - accommodation - medical care - labour insurance compensations in accordance with Malaysian laws and regulations - Employer shall provide return air ticket to those foreign workers who have completely served their employment contract MALAYSIAN EMPLOYERS FEDERATION

34. Continue In case employer commits violence against foreign workers or do not pay basic salary and overtime payment according to the terms of employment contract, Recruiter may request foreign workers to be repatriated to the home country. Employer shall pay for the travel expenses. Source: Recruitment Agreement between Malaysian Employer & Foreign Recruiter MALAYSIAN EMPLOYERS FEDERATION

35. WORKING TERMS AND CONDITIONS FOR FOREIGN WORKERS All foreign workers shall work under the terms and conditions prescribed in the employment contract. Employer approves and concurs with the imposition by recruiter of fees on foreign workers which shall be in accordance with the regulations of the foreign country concerned. MALAYSIAN EMPLOYERS FEDERATION

36. Continue The fees shall cover : - all costs, - expenses and charges in relation to documentation and processing services for foreign workers, including full medical examination, passport fee, contract verification, entry visa, handling and other necessary and reasonable expenses. MALAYSIAN EMPLOYERS FEDERATION

37. Continue Employer shall assist, if required, to send a partial income of foreign worker to his account in the home country every month and the balance to be deposited in his account in Malaysia. Above highlights some of the important Agreements signed between Malaysian Employers and Foreign Recruiting Agency. Source: Recruitment Agreement between Malaysian Employer and foreign recruiter MALAYSIAN EMPLOYERS FEDERATION

38. FOREIGN WORKER AND UNIONISM Section 8 of Employment Act 1955 and Section 4 & 5 of Industrial Relations Act 1967 do not prohibit any employee - foreign or local to become Union members. Work permit – conditions Not to be involved in any societies MALAYSIAN EMPLOYERS FEDERATION

39. EXAMPLE OF COLLECTIVE BARGAINING IN PLANTATION SECTOR Highlights some of the important matters in the CA of MAPA/NUPW inclusive of foreign workers. - 3-year forward agreement (1/7/2005 for a period of 3 years) - Wage revision approximate 7% granted to oil palm harvesters, harvesting kanganies, loaders and ‘other loaders’ and palm oil mills employees. - Basic wage palm oil mill employees increased from RM12.50 to RM13.50 per day. MALAYSIAN EMPLOYERS FEDERATION

40. Continue - Minimum basic earnings as a ‘safety net’ increased from RM325 to RM350 subject to qualifications/conditions; - Guaranteed minimum earnings exclude other cash payments as well as non cash payments. - Workers under this Agreement should be able to maximise their earnings as much as RM1,500/- per month depending on their efforts and willingness to work harder. MALAYSIAN EMPLOYERS FEDERATION

41. Continue Productivity incentive increased from RM80 to RM85 per month for full turnout under the Palm Oil Agreement and from RM40.00 to RM50.00 per month under Palm Oil Mill Agreement. Source:MAPA MALAYSIAN EMPLOYERS FEDERATION

42. EXAMPLE OF SALARY AND FRINGE BENEFITS CONCLUDED BETWEEN MALAYSIAN EMPLOYER AND FOREIGN WORKERS IN MANUFACTURING SECTOR Basic wage : RM 485 /month - After 3 months wage raise by RM45 RM 530/ month Allowances - Night/Shift Allowance :RM12 /night/shift - Meal allowance : RM2.50/day - Attendance allowance : RM80 /month - Paid bonus MALAYSIAN EMPLOYERS FEDERATION

43. OTHER FRINGE BENEFITS PROVIDED BY EMPLOYERS FOR FOREIGN WORKERS Accommodation Transportation Medical facilities Working equipment including uniforms Insurance premium (RM67/- per year) Death and accident MALAYSIAN EMPLOYERS FEDERATION

44. Continue Less deduction: - Levy & PLKS/ total RM 856.36/- Deduct RM71.36/month for a period of 12 months and the last month RM71.40. - Salary deduction will be made once a month not longer than 7 days through bank account designated by employer. MALAYSIAN EMPLOYERS FEDERATION

45. Continue Other terms and conditions of work issued by employers in line with Malaysian laws such as: - working hours (8 am-5.45pm) - overtime pay(RM3.80 per hour) - income tax, and - leave entitlement(14 days) MALAYSIAN EMPLOYERS FEDERATION

46. CONCLUSION Recruitment of foreign workers by Malaysian employers are subject to the requirements set by the Malaysian Government. Malaysian employers have to follow the guideline provided by the Immigration Department and the Agreement with the Recruiter of foreign country. MALAYSIAN EMPLOYERS FEDERATION

47. Continue Foreign workers also benefited from collective bargaining in the respective sectors. Foreign workers working in Malaysia are protected not only by the regulations set by the Malaysian authority but also by the Collective Agreement signed between Employers and Employees Union in the respective sectors. MALAYSIAN EMPLOYERS FEDERATION

48. MALAYSIAN EMPLOYERS FEDERATION THANK YOU MALAYSIAN EMPLOYERS FEDERATION