Subcontracted and outsourced labourers with no job security nor benefits will become more widespread in Malaysia under the Trans-Pacific Partnership Agreement (TPPA), warned Klang MP Charles Santiago.
Presently, he said, Malaysian law allows only the plantation sector to hire such workers, although it is also prevalent in other sectors, despite it being illegal.
However, with Malaysia signing a TPPA side agreement with the United States, this will allow all sectors of the Malaysian economy to hire outsourced labour.
“We are the last generation to be in permanent employment. When your children in the future want employment, he is going to look for a contractor.
“That also includes office staff. We'd always think it (outsourcing) is factory (jobs) but it is also in the services sector - hotels, supermarkets...” he told reporters when met in Petaling Jaya yesterday.
The side agreement will take effect when TPPA comes into force, which would be two years after it is signed.
The agreement is dubbed the 'Malaysia-United States Labour Consistency Plan'.
Transient workers
Santiago said that while the core text of the TPPA labour chapter is unenforceable, the side agreement would require many changes to Malaysia's labour laws.
However, he believes that the agreement is self-defeating and had not been properly thought through.
A clause in the agreement reads, “Malaysia shall ensure that the use of subcontracting or outsourcing is not used to circumvent the rights of association or collective bargaining.”
In light of other clauses in the agreement and the nature of subcontracted work however, the member of the bipartisan parliamentary caucus on TPPA said the clause “makes no sense”.
He explained that in order to exercise these rights, outsourced workers would need to be able to form a union.
But outsourced labour is transient in nature. Workers typically work only several months before their brokers move them to another workplace as required by demand, he said.
Since trade unions cannot be formed under a labour broker, and the workers don't stay long enough at a workplace to unionise effectively, the clause in the side agreement is moot.
Currently, he said, outsourced workers can be sacked for as little as a 24-hour notice, and do not enjoy benefits such as insurance, Employees Provident Fund (EPF) contributions, and social security protection through Socso.
He added that the practice also perpetuates poverty because outsourced workers do not get up-skilled and are therefore stuck with low-wage jobs.
Some protection
On the agreement's other provisions, Santiago said Malaysia is required to reduce the number of workers required to call for a strike, from the current 66 percent to just a simple majority.
In addition, workers in all industries are allowed to hold a strike, including banks, electrics and electronics manufacturing, postal services, police, which currently are not allowed to.
However, the agreement did not address the compulsory arbitration clause in Malaysian labour law.
This means that when a minister refers a labour dispute to court, any industrial action must stop or the union will face de-registration, he said.
Santiago said he welcomed some provisions in the side agreement, such as those that reduce the powers of the director-general of trade unions, and those that provide greater protection to foreign workers.
Among others, employers are to pay for the levy of hiring foreign workers and are not allowed to withhold the workers' passports.
This is as opposed to the current practice where the levy is paid by the worker, and employers withhold the workers’ passports on the pretext of keeping them from running away. Both practices had been criticised by NGOs as being open to abuse.
However, Santiago said instead of imposing this agreement on Malaysia, all 12 TPP countries should have been held accountable to the International Labour Organisation (ILO) standards.
“That's what they should have done. But this one, they are just pussy-footing. The US doesn't want to be accountable to the ILO. That's the reason, fundamentally,” he said.
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