Issues of Foreign Workers Policy in Malaysia Manufacturing Industry

Introduction On March 7, 2011 The Star, we know that our Malaysia disposal had decided to recruit more(prenominal) than overseas controlers from India which around 45,000 people from India. This is to get the demand by around 13 sectors which currently in famine of men. So, this resulted in some a(prenominal) people and The Malayan Trades Union relation back (MTUC) had strongly opposed the de bourninations made by governing body activity. The Malaysian Trade Union Congress (MTUC) is said as the most representative doers organization in Malaysia.Three principal(prenominal) objectives emphasized by MTUC first is to promote the interest of its affiliate pairings in auberge to improve the workers economic and companionable conditions. Second is to realise the policies argon developed and action been taken towards make sure that full recitation and setting a minimum absorb, a legal maximum operative period per week which is 44 hours and served as a training cen tres for workers. Thirdly, earn a Social Security measures that provide retirements benefits, as well as protection against sickness, unemployment, injury, and old age.Over wholly, MTUC was served to protecting the workers interest or fight for them. match to Nagiah Ramasamy (2008), our Malaysia occupation union movement is lining many challenges, which be from liberal policies and the changing structures of employment. Due to the strict requirements of the Trade Union Act 1959, Malaysia union be normally small fragmented and regional. But, they st rachitic protest the decision of recruiting more alien workers from India which might harm our topical anesthetic workers benefit.Some topical anaesthetic workers argon too picky on job selection and they dont want to work unless there is amply salary, benefit or grant waiting for them. So, attitude towards the job is their main problem. So, the employers forced to retrenched the local workers and recruiting the distant work ers by outsourcing or other(a)s way. The objectives of this assignment are to figure out the problems facing by Trade Unions in Malaysia on migratory and domestic workers. Furthermore, we in any case know that the concussions of the conflicting workers indemnity in manufacturing industry.In this assignment, we endure a more understanding on contradictory workers policy as well as the ways to overcome it in future trend. Literature Review harmonize to A. Navamukundan (n. d. ), employers are cost-conscious and choose workers who are not only inexpensive moreover also energise the necessary skills and comply with strict discipline and sturdy work. The gustatory modality will be for immigrant unknown workers, who will accept devil lower wages and worse terms and conditions of employment, as their primary objective is to earn as much m integrityy as possible inwardly a short span of time.Those are the reason why the cosmos of immigrant contradictory workers are increa sing social classs by years. A bring done by Philip S. Robertson Jr (n. d) give tongue to that the Malaysian Government does not deport a comprehensive legal and policy framework to regulate the recruitment, admission, placement, treatment, and repatriation of migrant workers. Oversight of migrant workers is divided among ministries, and even within ministries, between versatile departments. Therefore, contrary worker can easily migrate to our country to let a job which offers them the salary that is higher than their own countries.This has become a threat to the local workers. Nagiah Ramasamy (n. d) proposed that the challenge for union leaders is to build a union movement that can respond effectively to the threats and opportunities that it faces with the growing knead of MNCs and the growing rounds of bilateral trade agreements. Trade unions can process in improving occupational health and safety, decent work and social dialogue with regimen and employers. It is so obvi ous that trade union walkaway an important role in fighting for local workers right. A study presented by U. S.Department of Labor stated the Government of Malaysia revise its policy on foreign workers so that priority would be precondition to Malaysians seeking employment due to the world economic slowdown and increase unemployment in 2001. The Government has limited documented workers to a three year stay and is cracking down on unregistered foreign workers, with uphill amendments to the Immig ration Act calling for harsh penalties. match to Kgaogelo Elizabeth Mokoka (2007), most southwest African prevails immigrate to destinations such as UK, Saudi Arabia, New Zealand, Australia and the regular army (Xaba & Phillips 2001).In a study commissioned by the World wellness scheme (WHO), Buchan et al (2003) identified 2 groups of countries in terms of nurse emigration and mobility. Destination countries are those to which nurse are drawn, eon root system countries are th ose that nurse are drawn from. Destination countries include quint countries, namely Australia, Ireland, Norway, the UK and the USA. According to Mr. Ajit Singh Jessy from the Penang benignant Resources committee, salary remains as one of, or the most, important factor in the retention of workers.As such, the complaints of local workers regarding wage levels are not groundless, especially when it comes to menial forms of labour. What may be baseless is the argument that locals shun these jobs which then withdraw to be furthermostmed out to foreign labourers. According to Cecilia Kok (2011), for randomness and Southeast Asian economies, especially those that are lag behind Malaysia, many migrant workers perceive a land menses with milk and honey. Official data show that Malaysia attracts a huge number of migrant workers into the country.According to official record, the number quadrupled from less than 500,000 in 1999 to more than two one thousand thousand, representing about 17% of the countrys workforce in 2008. Vijayakumari Kanapathy (2006) proposed that foreign workers in mammoth numbers were seen as a security threat as the rising offense rate and incidence of exceedingly contagious diseases were associated with them. Such habitual perception was compounded by the belief among policy makers that heavy cartel on low-skilled foreign labour will trap the economy in low-wage low-skill equilibrium and slow down the much-warranted economic transformation into high-skilled activities.According to the International presidency for Migration (n. d. ), there are approximately 2,109,954 migrant workers currently working in Malaysia, 50 per cent are Indonesian labour migrants, indicating the scale of Indonesian labour migration to Malaysia. The majority of labour migrants arriving in Malaysia originate from other South and Southeast Asian countries, mainly attracted by the higher salaries that are cover in Malaysia compared with their countries of origin.A study done by FEDERATION OF MALAYSIAN MANUFACTURERS (2010) stated that Manufacturing companies are currently reporting an increase in orders. However, many are facing difficulties accepting and performing orders due to a shortage of workers. Some have to turn away orders while others are penalised for late delivery. There are also companies recording losses be earn they have not been able to fulfill orders. Development of the Issues Important of Manufacturing application and Contribution to gross domestic product The Gross domesticated Product (GDP) of Malaysia is bes on its agricultural ector, manufacturing industries and the swear out sectors. Purchasing power comparison (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means that the exchange rate between two countries should equal the ratio of the two countries price level of a fixed basket of goods and servic es. In 2008, the agricultural sector had contributed 9. 7 % towards the countrys GDP. The contributions of the manufacturing industries were estimated as 44. % and that of service sector was 45. 7 % towards the countrys GDP. As per the GDP- PPP, Malaysia is ranked twenty-ninth in the world. A GDP result rate of 20 % was sight towards the end of 20th century. The Gross Domestic Product nominal of Malaysia in 2009 was estimated as US$ 207,400 billion in 2009 and that of GDP-PPP was estimated as $ 3. 9 billion. The GDP nominal per capita in 2009 was estimated at US $8,100. Analysis of challenges facing by Trade Union in Malaysia Number of foreign workers is growing-1. 6 million in 2005 to 1. million in 2010 (figure 1). According to Philip S. Robertson Jr. , Malaysians have a bad altitude of not volition to perform jobs that they account as 3-D (dirty, difficult and dangerous), creating demand for foreign workers in sectors like plantations/agriculture, construction, manufacturing, and approximately service occupations. The Malaysian Trades Union Congress said today it opposes strongly the proposed mass recruitment of 45,000 foreign workers beca practice it would edge out locals from the labour market. According to MTUC vice-president A.Balasubramaniam, a profound effect on the wages of Malaysians could be ca enforced by such a big inflow of foreigners and the governances high-income policy for them would be jeopardized too. Moreover, locals are being deprived or discriminated if they are competing with foreign worker for the opportunity of being chosen to work overtime accord to Ministry of Human Resources Malaysia. A study done by Syarisa Yanti Abubakar, from the short-term layer of view of employers, migrant labour will only be employ only if doing so is more cost effective compared to other breathing alternatives.Thats why locals are left behind because their cost of hiring is far higher than that of foreign worker. Besides that, according to Minist ry of Human Resources Malaysia, more and more local workers are retrenched and replaced with foreign workers. This is resulted by the actions taken by many manufacturing companies of outsourcing foreign workers through some agencies. Furthermore, altitude is another reason which cause the downsizing of local workers such as thinking too highly on themselves, not willing to do those non-air conditioned job and so on.STATISTICS OF FOREIGN actor IN MALAYSIA Statistics PLKS by Citizenship and Sector, Feb 2010 (Source Immigration Department) STATISTICS OF FOREIGN WORKER IN MALAYSIA Statistics PLKS by Citizenship and Sector, Feb 2010 (Source Immigration Department) Figure 1 Implementation various foreign worker policies are implemented by the to control the influx of illegal foreign workers. According to economic report 2004/2005, these include the external Worker Rationalisation Programme to legalise illegal workers, amendments to the Immigration Act, 1977 and botheration of an annua l levy.In addition, several Memorandum of Understanding (MOUs) were signed with labour merchandise countries to authorise legal recruitment of foreign workers. All of these had resulted the employers preference more towards foreign workers but not the locals and this preference has come on with three obvious activities according to a study done by the Ministry of Human Resources Malaysia. The first is the number of the application on recruiting foreign workers is significantly increasing as we can know from a statistic that there are average 20,000 foreign workers approved every month in Malaysia.Secondly, most of the employers are not taking sincere altitude in recruiting locals. Those applications from the employer more often than not from manufacturing industry are bypassed while going through the ELX system to ensure the objective of recruiting foreign workers can be achieved. Lastly, large portion of foreign workers in Malaysia are employed through the outsourcing companie s to escape the quota limit. If the employer directly conveys foreign workers from source countries, they will be facing the quota limitation and therefore they hire the foreign workers through a third arty. Advantages According to Daniel Lee and Richard Ho (2011 Nov), many employers complain that their business activities will come to a unwarranted stop if they forbid them to use foreign workers because the jobs in those sectors are perceived to be dirty, difficult and demeaning to the average Malaysian. Therefore, they have to utilize foreign workers and sing praises of hiring such workers, supposedly of a labor category that is lento to utilize, simple to manage and that does not make demands for wages increases.Some local employers have voiced out in support for the hiring of foreign workers that many among them have threatened to blot out and relocate if their demands for low-cost foreign workers are unmet. As such, foreign workers fill up the empty space as they are not opp osed to working in dirtier, more flukey conditions and longer hours for equal or lesser pay thereby belongings labor costs relatively low and helping to keep Malaysia competitive against other low-cost producing countries. They also serve as a fender during times of recession as they help sustain.Disadvantages According to Ken CK (2002), the economic profit that gained from foreign workers has resulted in social costs and social problems, for recitation rising crimes, fraud, social deviance, health care costs and the transmission of transmittable diseases including HIV/AIDS. This is because their unsafe sexual behavior through commercial sex, and day-to-day homosexual and heterosexual activities. Furthermore, according to Syarisa Yanti Abubakar (2002), migrant labours will only be hire only if doing so is more cost effective compared to other existing alternatives.This will cause the locals are being deprived or discriminated if they are competing with foreign worker for the opportunity of being chosen to work overtime according to Ministry of Human Resources Malaysia. According to Ministry of Human Resources Malaysia, nowadays local workers are retrenched and replaced with foreign workers and this will resulted by the actions taken by many manufacturing companies of outsourcing foreign workers through some agencies.Altitude is also another reason which causes the retrenchment of local workers because they think too highly on themselves and not willing to do those 3D jobs (dirty, difficult and dangerous). Effects of Foreign Worker Migration to Manufacturing Industry According to Ministry of Human Resources Malaysia, there must be no distinction in treatment by employer on local and foreign workers in respect of wages and terms and conditions of service. According to K George, the government has last decided to extend equal treatment to foreign workers and also Human Resources Minister Dr.Fong Chan Onn announced that foreign workers employed in Malaysi a would be handle equally in accordance with the provisions of the International Labour Organisation (ILO) convention which Its function is to safeguard the rights and dignity of the working people all over the world. Recommendation Foreign worker indeed have contributed to the growth of economy, but too dependent on this group of foreign workers to coerce our economy cannot be carry out in long term as this may drag our country economy.To stop dependence of foreign worker in our country cannot be done away all-night as a sudden repatriation of them can have a serious impact on the economy. Therefore a careful planning and cooperation from employer and government is needed. One of the ways to ensure employers lower down the foreign worker and shift to employ locals are by quotas system. Quotas of foreign employee can hired in one company should be set by the government to stop them over relying to foreign worker and hire more local.Different quotas should be set differently accord ing to the supply and demand because the supply for local labour in certain industry is low for example construction. Quotas should be raise for a certain period of time to minimize the impact to the industries. Government can reduce the amount of foreign worker by increasing levy on foreign worker to a high amount where there are no cost saving benefits in employing foreign worker to encourage the employer uses local worker. When the cost of hiring a foreign worker is higher compare to local worker, employer will choose to use local worker because they can save cost thus ill eventually increase the amount of skilled local worker in Malaysia which will increase the productivity and move Malaysia into a high income country. both employer and government play a big role in order to reduce the country dependence on foreign worker. Employer who over depend on cheap foreign worker should try to shift use local to increase the productivity in long term while government should implement bet ter regulation and enforce them to punish those employer which bypass the rules for using illegal immigrant in their firm and to prevent illegal immigrant to unload our country.Conclusion In conclusion, we had more understanding about foreign workers policy in Malaysia. Nevertheless, the foreign workers play an important role as one of the workforce in our country since decade years. They bring their skills from their country and practice them at here. But, it also brings some problem and cases to us which even make our government headache. So, law enforcement should be taken serious, as we should treat the arrest and handle of undocumented migrant workers as an administrative offence, and not a woeful matter.These undocumented workers will affect our daily life, as they would commit crime or practice illegal activities in our country which make our government hard to tackle on them since we dont have their personal detail and document. So, enforcement on foreign works policy is vital. Besides that, instead we relying on foreign workforce, we know that it would be better for us to consider more on our domestic workers which can also have equivalent level of skills and performances.This also follows to our MTUC aim which suggested that giving priority to our local workers. Of course, our domestic workers also need to improve themselves, not matter on hard-skills or soft-skills we should upgrade our own knowledge and skills to fight in economy and worldwide competition. It should be making clear that the interactions between governments are extremely important. The trade union leader should try to come out an agreement with the government on foreign workers policy which will benefit foreign workers and our Malaysian at the same time.If does, it will be the win-win situation between two country. References A. Navamukundan. (n. d. ) Labour migration in Malaysia trade union views. Daniel Lee and Richard Ho. (2011). Labour shortfall Issues Forum. Retrieved No vember 11, 2011, from www. seri. com. my http//www. seri. com. my/v3/index. php? option=com_content&view=article&id=169labour-shortage-issues-forum&catid=38latestnews&Itemid=54 Evelyn S. Devadason and Chan Wai Meng. (n. d. ).A Critical Appraisal of Policies and Laws Regulating Migrant Workers in Malaysia. Ken CK. (2002). Male foreign migrant workers and HIV/AIDS in Malaysia risk environment, susceptability and implication for intervention. Retrieved November 3, 2011, from NLM Gateway http//gateway. nlm. nih. gov/MeetingAbstracts/ma? f=102259889. html Nagiah Ramasamy. (n. d) The incoming of the Trade Union Movement in Malaysia. Tenaganita. (n. d. ) Outsourcing in Labor or Trafficking in Migrant Labor?