Foreign workers face pay setback

PUBLISHED : Tuesday, 17 April, 2007, 12:00am
UPDATED : Tuesday, 17 April, 2007, 12:00am

A plan to slash the retirement income of 2 million foreign workers in Malaysia will be tabled in Parliament this week, adding to a list of grievances they already face, labour experts and human rights activists said.

Under current laws, employers must pay an extra 12 per cent of their workers' salary per month into the Employees Provident Fund. This applies to locals and foreigners alike.

The government wants to replace this contribution with M$5 (HK$11) per foreign employee per month, The Sun newspaper reported yesterday. The bill could be law within six months.

Trade unions, lawmakers and human rights activists said the change would benefit multinationals most.

Labour experts said the proposed change is yet another concession to win foreign investment, which last year touched only US$3 billion, the lowest level in a decade.

Most affected would be about 160,000 skilled expatriates working in entertainment, infrastructure, teaching and IT.

'This is atrocious, it is daylight robbery,' said Irene Fernandez, executive director of Tenaganita, a human rights NGO that champions the cause of migrant workers.

'This change is wholly discriminatory and against local and international labour conventions. Malaysia is a signatory of International Labour Organisation conventions that ban discrimination.'

The law gives equal protection to local and foreign workers, but in reality unskilled foreign workers are paid less, are not protected against accidents and are at the mercy of their employers over wages.

'The new law appears to be targeted at skilled expatriate workers earning about M$20,000 a month,' said Sinnapah Sivanesan of the Malaysian Trade Union Council.

'Expatriates' wages are suddenly 12 per cent cheaper with the changes. That's a lot of money saved by Malaysian and foreign multinationals.'

Human rights activists Yap Swee Seng said the changes also hurt local workers.

'It is a signal to foreign capital that they can come here and hire foreigners over locals and pay less,' said Mr Yap, the executive director of Suaram, a human rights NGO.

The Federation of Malaysian Employers said the proposal was long overdue but would wait until the bill was passed before saying more.