For five years, Ali had been toiling for his company. All of a sudden, the company told Ali that he was no longer needed.
Ali protested. Surely, he could not be sacked on the spot. His company said 'yes'. After all, he was not on the company's payroll. Unbeknown to him, the 'real' company which Ali had been working for all these years was a labour contractor. It was this labour contractor which is supplying workers like Ali to the company.
This is the new trend in outsourcing.
According to Monitoring Sustainability of Globalisation director Charles Santiago, large corporations have recently caught on to a novel twist to outsourcing which relieves them of legal and financial obligations towards 'irregular' workers.
Labour contractors recruit such workers for the manufacturing, services and plantation sectors, but may not take responsibility for their employment rights or welfare.
Since they are not strictly employees of companies that take them in, they cannot join unions and are not covered by collective agreements. They are also not eligible for terms of service available to full-time employees.
These workers are caught in a legal no-man's land in which neither contractor not employer can be held accountable for violations of labour rights.
"Outsourcing today has become very fashionable because companies divorce themselves from industrial relations problems," Santiago said.
"Companies will say they did not hire the workers, but engaged the contractor who hired them to work - and they expect workers to deal with the contractor. As such, the rights and the benefits of these workers don't exist."
He called on trade unions and the government to address this issue, by dispensing with the practice of outsourcing and 'regularising' irregular workers so that they are eligible for employment benefits.
Santiago, an economist and a social auditor , said he has seen an increasing number of companies in Malaysia and Southeast Asia resort to employing 'irregular' workers, who are then open to abuse and exploitation in a number of ways.
For instance, workers are dropped whenever there is a downturn in production or profit. In one factory run by a multinational company, such workers were told to go on 'leave' every few months, only to be brought back as 'new' hires.
When there is an upturn in production or business, such workers typically bear the brunt of intensified work, on 24-52 hour overtime shifts.
In one factory, workers were pushed to work shifts of 48-56 hours non-stop while in another, the workers were so exhausted at the end of their shift that they could not even carry their bags.
Abrupt lay-offs
Irregular workers also suffer the most in the event of accidents, which occur most frequently during intense production periods. Without documents that confirm employment by the company, hospitals are reluctant to treat them, said Santiago.
They can also be sacked at any time. One factory's mode of informing workers that they had been laid off was particularly curt.
"In the morning if they don't pick you up, then (it means) you're fired," said Santiago.
Workers in a factory producing parts for a major telecommunications company were told while entering the premises one morning that their services were no longer required.
Upon protesting that they had worked there for five to six years, the company official responded, 'No. You have never worked for us a single day. You worked for the contractor'.
Explained Santiago: "These guys are come every day to the company to work but are not actually working for the company but for the (labour) contractor. It's only a place of work... this is a completely new concept."
He said that companies that do not end such exploitation will eventually be punished by consumers who are increasingly showing abhorrence of unethical production and sourcing methods.
"The pressure to comply with labour standards is increasing. Companies violate these standards at their own peril," he added.
End to sweat-shop era?
Ali protested. Surely, he could not be sacked on the spot. His company said 'yes'. After all, he was not on the company's payroll. Unbeknown to him, the 'real' company which Ali had been working for all these years was a labour contractor. It was this labour contractor which is supplying workers like Ali to the company.
This is the new trend in outsourcing.
According to Monitoring Sustainability of Globalisation director Charles Santiago, large corporations have recently caught on to a novel twist to outsourcing which relieves them of legal and financial obligations towards 'irregular' workers.
Labour contractors recruit such workers for the manufacturing, services and plantation sectors, but may not take responsibility for their employment rights or welfare.
Since they are not strictly employees of companies that take them in, they cannot join unions and are not covered by collective agreements. They are also not eligible for terms of service available to full-time employees.
These workers are caught in a legal no-man's land in which neither contractor not employer can be held accountable for violations of labour rights.
"Outsourcing today has become very fashionable because companies divorce themselves from industrial relations problems," Santiago said.
"Companies will say they did not hire the workers, but engaged the contractor who hired them to work - and they expect workers to deal with the contractor. As such, the rights and the benefits of these workers don't exist."
He called on trade unions and the government to address this issue, by dispensing with the practice of outsourcing and 'regularising' irregular workers so that they are eligible for employment benefits.
Santiago, an economist and a social auditor , said he has seen an increasing number of companies in Malaysia and Southeast Asia resort to employing 'irregular' workers, who are then open to abuse and exploitation in a number of ways.
For instance, workers are dropped whenever there is a downturn in production or profit. In one factory run by a multinational company, such workers were told to go on 'leave' every few months, only to be brought back as 'new' hires.
When there is an upturn in production or business, such workers typically bear the brunt of intensified work, on 24-52 hour overtime shifts.
In one factory, workers were pushed to work shifts of 48-56 hours non-stop while in another, the workers were so exhausted at the end of their shift that they could not even carry their bags.
Abrupt lay-offs
Irregular workers also suffer the most in the event of accidents, which occur most frequently during intense production periods. Without documents that confirm employment by the company, hospitals are reluctant to treat them, said Santiago.
They can also be sacked at any time. One factory's mode of informing workers that they had been laid off was particularly curt.
"In the morning if they don't pick you up, then (it means) you're fired," said Santiago.
Workers in a factory producing parts for a major telecommunications company were told while entering the premises one morning that their services were no longer required.
Upon protesting that they had worked there for five to six years, the company official responded, 'No. You have never worked for us a single day. You worked for the contractor'.
Explained Santiago: "These guys are come every day to the company to work but are not actually working for the company but for the (labour) contractor. It's only a place of work... this is a completely new concept."
He said that companies that do not end such exploitation will eventually be punished by consumers who are increasingly showing abhorrence of unethical production and sourcing methods.
"The pressure to comply with labour standards is increasing. Companies violate these standards at their own peril," he added.
End to sweat-shop era?
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