Monday, July 4, 2011

National Wages Consultative Council Bill Approved

June 30, 2011 22:16 PM

KUALA LUMPUR, June 30 (Bernama) -- The Dewan Rakyat Thursday approved the National Wages Consultative Council Bill 2011 to pave the way for the setting up of the National Wages Consultative Council.

Human Resources Minister Datuk Dr S. Subramaniam said the council would function as an independent body to review and set minimum wages based on the tripartite principle involving the government, employers and workers.

He said the council would be assisted by a professional group in the technical committee made up of experts in economics, statistics and social science.

The bill spells out that employers, who do not pay the salary as specified in the minimum wage order, will be fined not exceeding RM10,000 per employee, if convicted, he added.

Subramaniam said the employers would also be compelled to pay any differences in the salary to employees, who were found to be paid below minimum wages, besides being imposed other related charges.

"For subsequent offences, the proposed penalty is a fine not exceeding RM1,000 per day for each offence while for repeated offences the proposed penalty is a fine up to RM20,000 or imprisonment not exceeding five years for each offence," he said.

He said the minimum wage would help low-income earners increase their purchasing power in the face of rising cost of living and address the issue of poverty among the working poor.

"The minimum will also endeavour to prevent exploitation of workers as employers find the easy way out of recruiting foreign workers, who are willing to accept low wages.

"It is also aimed at optimising the use of local manpower and encourage employers to move up the value chain through investment in high technology and enhance workers' productivity," he said.

He said at present, wages for employees in the private sector were determined by three methods.

They are firstly, the market power based on labour supply and demand; secondly, the Collective Agreement as a result of negotiations between unions and employers; and thirdly through the National Wages Council under the National Wages Council Act 1947 .

"Of the three methods, only the National Wages Council set the minimum wage. However, the minimum wage is limited to certain sub-sectors for vulnerable groups such as shop assistants, port, hotel and food outlet workers, and security guards," said Subramaniam.

He said wages determined by market forces were found to be ineffective based on studies conducted by the World Bank and in Malaysia's case, wages increased only at the rate of 2.6 per cent per year for the past 10 years.

The National Employment Survey in 2009 involving a sample of 24,000 employers and 1.3 million employees found that 33.8 per cent of employees earned below RM700 per month, he added.

Subramaniam said the implication from the implementation of the minimum wage on the economic and social development would be very far-reaching, complex and uncertain.

"The minimum wage has given a positive impact on the socio-economic development of the United States, China, France, Taiwan and the United Kingdom.

"However, if the minimum wage is set too high, theoretically it could lead to increase costs of doing business for employers and encourage employers to reduce the number of workers, thus increasing unemployment," he said.

Meanwhile, an attempt by M. Kulasegaran (DAP-Ipoh Barat) to refer the bill to the Select Committee under Standing Order 54 (2) failed as the majority won the division with 69 members from Barisan Nasional voted against it while 29 from the opposition in favour of it.


MTUC not pleased with new wage Act

KUALA LUMPUR: MTUC has ex-pressed its disappointment over the National Minimum Wage Act which it claims does not differ very much from the Wages Council Act, which has been in force since 1947.

In a statement yesterday, MTUC secretary-general Abdul Halim Mansor said the proposed Natio-nal Wages Consultatives Council Bill, which was awaiting approval of the Parliament, did not meet trade unions' expectations.

He said the wages council, to be set up under the new Act, would be powerless and ineffective while the Human Resources Minister would wield absolute power to accept or reject any recommendation made by the council.

“The minister can continue to frustrate millions of lowly-paid workers by refusing to accept the council's advice and delay the implementation of a decent minimum wage,” he said, adding that the ministry can also arbitrarily reduce the rates.

He said based on the Human Resources Minister's proposal, workers' representation in the wages council would be less than 20%.

“In appointing the members of the council, the minister is not obliged to consult MTUC or organisation of employers and he is empowered to remove any member of the council,” he said.

Abdul Halim said despite studying the various wages council models in other countries, the proposed bill was not aimed at implementing a national minimum wage but instead, wages would be determined by sector, category and region

Minimum wage by year’s end, says Subra

By Shannon Teoh
July 04, 2011

Subramaniam said the council was in the process of being filled. — file pic
KUALA LUMPUR, July 4 — Putrajaya has set the end of the year as the deadline to implement a minimum wage after the National Wages Consultative Council (NWCC) Bill was passed in Dewan Rakyat last week.

This comes after fierce criticism from opposition lawmakers who said the law does not guarantee that a minimum wage would be implemented since the Cabinet could veto and delay proposals from the council indefinitely.

With the Bill nearly certain to go through Dewan Negara unscathed, Human Resources Minister Datuk S. Subramaniam said today the council was already being formed and that the government would aim to set a wage floor this year.

“We are already setting up the council and it will weigh up all the information before making a proposal to the government. We target to implement a minimum wage policy by the end of the year,” the MIC deputy president told reporters.

Despite widespread concern raised by numerous employers, Putrajaya went ahead and tabled the highly-anticipated NWCC Bill in Parliament last week, paving the way for the implementation of a minimum wage policy in the country.

But the Najib administration came under fire over the Bill, with Pakatan Rakyat (PR) MPs saying the council was a futile exercise as the government would still have the final say in setting a minimum wage rate.

According to the Bill, the NWCC’s role will be to advise the government on all matters related to minimum wages, including its development at the international level as well as recommendations to the government on minimum wage rates and coverage according to sectors, types of employment and regional areas, among others.

It will comprise a chairman, a deputy, a secretary, at least five members drawn from public officers, at least five employee representatives, five employer representatives and another five others who have yet to be named — all of whom will be appointed by the human resources minister.

Subramaniam had also explained in Parliament that the five “others” will include independent and qualified experts like economists and academicians.