This document discusses the erosion of worker rights in Malaysia through practices like outsourcing and short-term contracts. It notes how the right to 8 hours of work, recreation and rest has been amended to allow longer hours. While employment was once understood as regular and permanent, now it is often short-term without benefits. Outsourcing allows employers to avoid obligations to workers by using third party contractors. This undermines unions and worker bargaining power. The document calls for abolishing such practices and returning to a direct two-party employment model that protects worker rights and regular employment.

2. What rights remain ?
8 hours work per day or 48 hours per week?
Right to form and join Trade Unions?
Minimum Wage?
Employment Security?
Permanent Regular Employment?
Occupational Health and Safety?
Maternity Leave & Benefits?
………..

3. Erosion of Right to ‘Eight hours work, Eight
hours recreation, Eight hours rest’
But in 1989, the Malaysian government amended the
law allowing for the Minister to waive these rights
as to required hours of work, on the
application of the employer, but retained the
condition that no worker is required to work for more
than forty-eight hours in one week, which
subsequently was removed by yet another
amendment in 1998.
 Employment (Amendment) Act 1989 Act A716
 Employment (Amendment) Act 1998 Act A1026

4. Employment …Not Job
Regular, Permanent…not short-term
 A fundamental right from which so many other rights naturally
flow
 Employment determines where the worker will ‘settle down’,
spouse finds employment, children schools,….
 Employment – regular permanent employment until retirement,
retrenchment, employer’s business closure, termination by
reason of misconduct/breach of contract
 Probation – time for employer to access suitability of worker
before confirming permanent employment
 When laws provide for annual leave, paid sick leave entitlement,
retrenchment and lay-off benefits – it all pre-supposes a
permanent employment

5. Who should be the EMPLOYER?
EMPLOYER
 Employer
- “(a)the principal or owner of the agricultural or industrial
undertaking, constructional work, trade, business or place of work; or
(b) the statutory body or local government authority” – Employment Act
1955
- owns the factory/workplace, tools of production, need workers
production
to work at their workplaces producing the employers products for
profits as in factories, plantations, farms or carrying out the services
that the employer does to make profits or their statutory obligations –
banks, restaurants, statutory/government bodies/departments
- exercises control and supervision of the workers at the
workplace
HAVE WORK – NEED WORKERS – FOR
PRODUCTION/SERVICES – FOR PROFIT

6. Who is the EMPLOYEE?
EMPLOYEE
 the person or class of persons employed, engaged or
contracted with to carry out the work at the workplace of
the principal or owner of the workplace under control and
supervision shall be the employee or employees
- the person or class of persons employed, engaged or
contracted with to carry out the work at the workplace of
the principal or owner of the workplace to produce the
products or carry on the business/services of the employer
for profit and/or to fulfill some statutory, government or
other obligations.
HAVE LABOUR – NEED WORK – NEED INCOME
– FOR LIVELIHOOD

7. EMPLOYMENT RELATIONSHIP
Employer (Principal) ↔ Employee (Worker)
- inter-dependent relationship (or mutually dependent
relationship)
- direct 2-party employment relationship
Principal needs workers – and depend directly on workers to work
producing products – hence profits
Worker’s power of negotiations – the ability to come together as
unions, protest, picket, strike,… which will affect production and
profits
Hence, EMPLOYERS need to be concerned about WELFARE, RIGHTS,
Working conditions, etc…. And will negotiate…

8. The employment relationship is a legal notion widely used in
countries around the world to refer to the relationship
between a person called an employee. (frequently referred to
as a worker.) and an employer for whom the employee
performs work under certain conditions in return for
remuneration. It is through the employment relationship,
remuneration
however defined, that reciprocal rights and obligations are
created between the employee and the employer. The
employer
employment relationship has been, and continues to be, the
main vehicle through which workers gain access to the rights
and benefits associated with employment in the areas of
labour law and social security. It is the key point of reference
for determining the nature and extent of employers. rights
and obligations towards their workers.- Report on The employment
relationship presented at International Labour Conference, 95th Session, 2006

9. Employment relationship has been,
and continues to be…
“…the main vehicle through which
workers gain access to the rights and
benefits associated with employment in
the areas of labour law and social
security. It is the key point of reference
for determining the nature and extent
of employers. rights and obligations
towards their workers…”

10. BUT EMPLOYERS NOW WANT TO…
DIVIDE
& EXPLOIT
Maximize Profits
 Reduce
Liabilities/Risks
Increase Flexibility
Easy Hire Easy Fire

12. Workplace
About 50% Employees – 20% regular
30% short-term
About 50% ‘workers’ but NOT
employees (i.e. supplied by 3rd parties –
many different 3rd parties…who usually
supply workers to many different
workplaces in many different sectors)

13. BEST if we can just use LABOUR
without all the other
obligations that come with an
employment relationship….
Like the obligation to look after
the welfare of the worker,
ensure that worker rights are
protected….permanent
employment until retirement,
domestic inquiry & right to be
heard when want to fire
workers, trade union &
collective agreements, Last In
First Out(LIFO) policy when it
comes to retrenchment…..

15. Permanent to Short-Term
Employment
Permanent Employees Short-Term Contracts
Wage increments, annual Easier termination, Avoid
leave/medical leave wage/annual leave/sick leave
entitlement increases, increments, Avoid maternity
maternity leave & benefits, leave, Lay-Off Benefits, etc
termination/lay-off benefits, More compliant less
termination difficult – demanding worker – worried
domestic inquiry, right to be about ‘contract renewal’ –
heard…., unions & collective hence also no union
agreements problems..

16. No employment relationship – no
employer’s obligations
Employee Not Employee
Can come together as No right to make claim for
UNION and make demands – better wages, working
for better rights, wages, etc conditions, benefits
Cannot be gotten rid off Can be gotten rid off easily
easily – due process by just picking up the phone
 Obligation to ensure rights & asking supplier to take
and welfare of worker worker away
No worries about worker
rights or welfare – just use
them

17. Why ‘outsourcing’?
Workers work for the factory, factory pays RM50
to the ‘outsourcing agent’ for normal hours of
work for 1 worker, and agent pays worker RM20,
making about RM30 per day per worker.
1,000 such workers - RM30,000 per day, per
month RM780,000-00, per year RM9.35 million.
With 2 million workers -RM1.9 billion
With 10 million workers ….

18. “…Investors do not want unions to
be formed in their establishments.
Through outsourcing, it would be
difficult for unions to be formed as
outsourcing company, and not the
factory, would be the employer…’
 - Datuk Ishak Mohamed, Enforcement Director of the Immigration
Department Malaysia (New Straits Time, 20/7/2008)

19. Trade Union
Membership - only employees (not other workers
working at the same workplace)
Collective Agreement – between employer &
employee
ONLY 50% of workers are ‘employees’ ….weaker trade
unions…. If NO employees, then no UNION

20. Triangular Relationship
“triangular relationships” - These are workers
employed by an enterprise (the provider) who
perform work for a third party (the user/the
principal) to whom their employees provides labour
or services – BUT do NOT become EMPLOYEES of the
‘user/principal’ – the factory/workplace.
Rightly – these labour/manpower suppliers
should only be Private Employment Agencies –
find and supply workers to the ‘user’/principal,
who thereafter are the EMPLOYEES of the
user/principal. For their service, they are paid a
fee – a one time fee.

21. Some struggles against outsourcing,
short-term contracts…
In October 2012 in Indonesia, 2 million workers
protested against ‘outsourcing’ and short term
contracts
In Malaysia, the Malaysian Trade Union
Congress(MTUC, trade unions and civil society
are still protesting against the ‘contractor for
labour system’….outsourcing

22. In 2011 and 2012, 2 statements, jointly issued by 115 and thereafter 94 trade
unions and CSOs calling for the abolition of the ‘contractor for labour
system….calling for the retention of the 2-party employment agreement,
 “…We call for the abolition of the contractor for labour and their
practices and that all workers, currently supplied by these 3 rd party
manpower/labour suppliers (contractor for labour) who are still not
direct employees of the principal employer be immediately made
employees of the said principal and be accorded same benefits and
treatment as accorded to all other employees without discrimination,
including the right to form/join trade unions or afford protection and
entitlement to the benefits accorded through their respective
Collective Agreements.
 We call for the abolition of precarious employment, and for
retention of a just 2-party employment relationship between
principals and workers…”

23. On 10 March 2012 the Malaysian Bar passed a
resolution unanimously calling
“…That the Malaysian government do the needful to
maintain existing 2-party employment relationships
between principals or owners of workplaces as
employers, and workers that work in the said
workplaces as employees of the said principals and
owners… The Malaysian Bar takes the stand that labour
owners
suppliers and/or contractors of labour should never
be or continue to be employers of workers after they
are supplied, accepted and start working at the
workplaces of principals or owners. Thereafter, these
workers shall be employees of the principal or
owners of the workplace…”

24. Mechanisms for promotion of worker
rights
Trade Unions,
Workers and their
associations,
Collective Actions by
Workers/Trade Unions at Work
Places….together with civil
society, AND…..

25. What we want…
Ensure that workers have the right to regular
employment with security of tenure until retirement.
Abolish short-term or fixed duration employment
contracts
 Ensure 2-party employment relationships between
principals or owners of workplaces as employers, and
workers that work in the said workplaces as
employees of the said principals and owners
Labour suppliers, contractors for labour or labour
outsourcing companies should never be or continue
to be employers of workers after workers are
supplied, accepted and start working at the
workplaces of principals or owners. Thereafter, these
workers shall be employees of the principal or
owners of the workplace…”

26. What else?
Abolish manpower/labour outsourcing and all
forms of triangular employment relationships/
arrangements.
Ensure that all worker rights are respected,
including rights of access to avenues of justice.
Migrant workers shall be allowed to work and
stay legally until the complaints and claims are
finally adjudicated and settled.
All workers shall have the right to form and/or
join trade unions.
……..

27. THANK YOU