INSTITUTIONAL FRAMEWORK OF MINIMUM WAGES IN...

Ministry of Human Resources Malaysia

at

National Minimum Wage: Symposium & Policy Round Table

Johannesburg, South Africa 2 – 4 February 2016

INSTITUTIONAL FRAMEWORK OF MINIMUM WAGES IN MALAYSIA

By: T. Shanmugam Secretary National Wages Consultative Council Malaysia

MoHR

Part 1 : Institutional Framework of MWs in Malaysia Part 2 : How Malaysia implements Minimum Wages (MWs)? Part 3 : Role of National Wages Consultative Council (NWCC) Part 4 : Composition of NWCC Part 5 : Key Features of NWCC Part 6 : Role of Minister of Human Resources Part 7 : Selection Committee Part 8 : MWs Technical Committee Part 9 : Process of Setting MWs in Malaysia Part 10: NWCC Meetings Part 11: Enforcement of NWCC Part 12: Conclusion 2

Outline of Presentation

Part 1 : Institutional Framework of MWs in Malaysia

3

CABINET Transforma0on Commi2ee on Facilita0ng the Implementa0on of

Minimum Wages Policy

Chairman: Chief Secretary to the Government

Members: Related Central Agencies and Ministries NWCC

Secretary

Secretariat

MW Technical Commi2ee

Selec0on Commi2ee

Chairman: Deputy Chair NWCC Members: Tripar0te

Deferment Commi2ee

Members: Tripar0te

(now redundant)

DraKing Technical Commi2ee on New Minimum Wages

Order 2016


Implementa0on and Monitoring Commi2ee


Part 2 : How Malaysia Implements MWs?

1.   Through an Act of Parliament – Na0onal Wages Consulta0ve C oun c i l A c t 2 0 11 ( A c t 7 3 2 ) – c a n b e a c c e s s ed : www.federalgaze2e.agc.gov.my

2.   Through an Order by Minister of Human Resources – Minimum Wages Order 2012 (MWO 2012)

3.   Policies on MWs by Na0onal Wages Consulta0ve Council (NWCC)

4.   Enforcement by the Labour Department

4

5

v  Established on 28 September 2011

v  To : a.   Advice the Government on MWs;

b.   Make recommenda0ons to the Government on MWs rate, coverage and non-‐coverage;

c.   Consult public on MWs rate and coverage;

d.   Collect and analyse data/informa0on on wages;

e.   Evaluate the impact of MWs;

f.   Deliberate on all ma2ers related to MWs; and

g.   Review the MWs Order

(Sec 4: NWCC Act 2011)

6 Sec 5 (A2achment A: Names and Posi0on of NWCC)

Chairman

At least 5 Public Officers 1.  Ministry of Finance 2.  Public Service

Department 3.  Ministry of

Interna=onal Trade and Industry

4.  Ministry of Human Resources

5.  Economic Planning Unit

At least 5 members

represen0ng Employees [Malaysian Trade Union Congress (MTUC)]

At least 5 members

represen0ng Employers [Malaysian Employers Federa=on (MEF)]

At least 5 Independents Members (others)

1.  President, Malaysian Consumer Associa=on

2.  Former VC of University (OUM) 3.  Execu=ve Director, Malaysian

Ins=tute of Economic Research (MIER)

4.  President, Malaysia Automo=ve Ins=tute (MAI)

5.  President, Malaysian Green Business Associa=on

Deputy Chairman

Secretary Secretariat

1.   All members are appointed by Minister of Human Resources;

2.   Employee’s and Employer’s representa0ves must be equal-‐same at all 0me;

3.   Chairman, Deputy Chairman are not public officers, employers or trade union member;

4.   Chairman, Deputy Chairman-‐have knowledge, experience and exper0se in labour and industrial rela0ons;

5.   Secretary-‐shall be a public officer;

7

Part 5 : Key Features of NWCC

cont…

6. Total NWCC members not exceeding 29 persons;

7. Secretary’s responsibili0es is clearly outlined;

8. NWCC term-‐ not exceeding 3 years and may be reappointed;

9. Provision for allowances for members;

10. Revoca0on of membership by Minister;

11. Members may resign with 30 days no0ce to Minister; 8

Part 5 : Key Features of NWCC

cont…

12.   Vaca0on of office by members;

13.   Minimum 4 mee0ngs in a year;

14.   14 days’ no0ce of NWCC mee0ngs;

15.   Quorum of Council – 2/3 members;

16.   Every member en0tled to one vote;

9

5 : Key Features of NWCC (cont..)

17. Minutes of NWCC mee0ngs admissible in court;

18. NWCC may invite other person for mee0ngs;

19. NWCC may establish commi2ees;

20. Secretariat to assist NWCC and Secretary;

21. Government shall provide sufficient funds to NWCC; and

22. NWCC may establish Commi2ees. 10

5 : Key Features of NWCC (cont..)

1.   Appointment date of enforcement of Act 732;

2.   Appointment of NWCC members;

3.   Revoke appointment of NWCC members;

4.  Makes the MW Order; and

5.  Make Regula0ons.

11

Part 6 : Role of Minister of Human Resources

Honourable Minister of Human Resources

(Hon. Richard Riot Anak Jaem)

v  To scru0nize CV and recommend appointment of MW Technical Commi2ee Members to NWCC

v  SC comprise of: -‐ 1.   Chairman – NWCC Deputy Chairman 2.   Deputy Chairman – MW Technical Commi2ee Chairman 3.   Members: i.   2 Government Group of NWCC members; ii.   2 Workers’ Group of NWCC members; iii.   2 Employers’ Group of NWCC members; iv.  2 Independent (Others’) Group of NWCC members; and v.   Secretary from NWCC Secretariat.

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Part 7 : Selection Committee (SC)

v  Chairman – President/ Vice Chancellor, Open University Malaysia)

v  Deputy Chairman – Execu0ve Director, Malaysia Ins0tute of Economic Research)

v  Members:

Ø  1 representa0ve from Department of Sta0s0cs, Malaysia (DOSM);

Ø  1 representa0ve from Malaysian Produc0vity Corpora0on (MPC);

Ø  1 representa0ve from Ins0tute of Labour Market Informa0on and

Analysis (ILMIA);

Ø  5 academicians from various universi0es in Malaysia

(specialised in economic, sta0s0cal, econometric, social, labour and

industrial rela0ons); and

Ø  Secretary from Secretariat. (No Employers or Workers members in the Technical Commi2ee) 13

Part 8 : MWs Technical Committee

Part 9: Process of Setting MWs in Malaysia

14 14

1. Public Consulta0on by Technical Commi2ee

3. Technical Commi2ee recommends to NWCC

7. Cabinet Disagree

5. Cabinet Agree

8. NWCC reconvene

6. Minister of Human Resources makes the

Order

2. Extensive delibera0on in Technical Commi2ee

10. Cabinet determine conclusively (2nd

0me)

9. NWCC submit fresh recommenda0on to

Cabinet

4. NWCC deliberate and submit Recommenda0on

to Cabinet

1.   Usually very tense;

2.   Workers and Employers form opposite views/ posi0ons;

3.   Secretary General of MoHR, Director General of Labour, Director General of Industrial Rela0ons, Legal Head Officer of MoHR sits as observer and upon nod by Chairman-‐gives their opinion; and

4.   Government group consolidates its stand prior to NWCC mee0ngs.

5.   Sub-‐group mee0ngs are common to consolidate each group views/ posi0ons.

Part 10 : NWCC Meetings

15

11 : Enforcement of NWCC

16

No. of Complaints Filed

1 389

453

0

200

400

600

800

1 000

1 200

1 400

1 600

1 2 2015 2014 Year

Complaints Relating to Minimum Wages (2014 & 2015)

Source : Secretariat, NWCC 17

Reduced by 67.38 %

No. of Cases Filed 46

10

0 5 10 15 20 25 30 35 40 45 50

1 2 2014 2015 Year

Trade Dispute Cases Relating to Minimum Wages (2014 & 2015)


Reduced by 78.26 %

Prosecutions Relating to Minimum Wages (2014 & 2015)


81 200 80 028

1 172 0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

No. of Inspec0on No. of Compliance No. of Non-‐Compliance

99% complied No. of Companies

1% not complied

Minimum Wages Statutory Inspection (2014 & 2015)

20 Source : Secretariat, NWCC

1 111

618

0

200

400

600

800

1 000

1 200

1 2 2014 2015 Year

Claims Relating to Minimum Wages at Labour Court (2014 & 2015)

21 Source : Secretariat, NWCC

Reduced by 44.37 %

1.   Ini0al Stage: NWCC members at loggerheads.

2.   Present Stage: More tolerant and understanding.

3.   MW Technical Commi2ee is the “backbone” and “nerve centre” to NWCC.

4.   Minister of Human Resources – stay neutral but Secretary keeps him updated.

5.   Cabinet are frequently updated on any serious issues/ma2ers on MWs.

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12 : Conclusion

Thank You

[email protected] h2p://minimumwages.mohr.gov.my/

MEMBERS OF NATIONAL WAGES CONSULTATIVE COUNCIL (1 OCTOBER 2015 TILL 30 SEPTEMBER 2017)

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Attachment A

Chairman YBhg. Tan Sri Datuk Amar Steve Shim Lip Kiong (Member of Judicial Appointments Commission) -‐ Former Federal Court Judge

Deputy Chairman YBhg. Datuk Dr. Syed Muhamad bin Syed Abdul Kadir (Senior Non-‐Execu=ve Director of CIMB Bank Berhad) – Former Secretary General of Ministry of Human Resources (MoHR)

Secretary Mr. T. Shanmugam Ministry of Human Resources (MoHR), Malaysia

Employers Representa=ves

1.   YBhg. Tan Sri Dato’ Azman Shah bin Dato’ Seri Haron President, Malaysian Employers Federa0on (MEF)

2.   YBhg. Tan Sri Dato’ Dr. Mohd Noor bin Ismail President, Malayan Agricultural Producers Associa=on (MAPA)

3.   YBhg. Datuk Hj. Shamsuddin bin Bardan Execu=ve Director, MEF

4.   YBhg. Dato Henry Lau Lee Kong Secretary General, Sarawak Timber Associa0on (STA)

5.   Mr. Alan Khoo Choom Kwong Vice President, MEF

6.   Mr. A. Ramadass Deputy President, MEF

cont…

25

Attachment A (cont..)

Employees Representa=ves

1.   Mr. Mohd Khalid bin Hj. Atan (Deceased on 26.1.2016) President, Malaysian Trades Union Congress (MTUC) 2.   Mr. N. Gopal Kishnam Secretary General, MTUC 3.   Mr. A. Balasubramaniam Deputy Secretary General, MTUC 4.   Mr. Andrew Lo Kian Nyan Secretary, MTUC Sarawak 5.   Madam Catherine Jikunan Secretary, MTUC Sabah 6.   Mr. A. Navamukundan Na=onal Execu=ve Secretary, Na0onal Union of Planta0on Workers (NUPW)

Government Representa=ves

1.   YBhg. Datuk Dr. Sundaran Annamalai Deputy Secretary General of Finance (Policy), Ministry of Finance (MOF) 2.   Mr. Amir bin Omar Director of Human Capital Development, Economic Planning Unit (EPU) 3.   YBhg. Dato’ Norsham bin0 Rahin Director of Remunera=on Division, Public Service Department (PSD) 4.   Madam Noor Wahida bin0 Noordin Senior Director, Investment Policy and Trade Facilita=on Division, Ministry of

Interna0onal Trade and Industry (MITI) 5.   YBhg. Dato’ Mohd Sahar bin Darusman Deputy Secretary General (Policy & Interna=onal),Ministry of Human Resources

(MoHR) cont…

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Attachment A (cont..)

Others / Independent Representa=ves

1.   YBhg. Prof. Emeritus Tan Sri Anuwar bin Ali President/ Vice Canselor, Open University Malaysia (OUM) (also the MWs Technical Commi2ee Chairman)

2.   YBhg. Tan Sri Datuk Mustafa bin Mansur President, Malaysian Green Business Associa0on (MAGBA)

3.   YBrs. Prof. Emeritus Dr. Zakariah bin Abdul Rashid Execu=ve Director, Malaysian Ins0tute of Economic Research (MIER) (also the Deputy Chairman of the MWs Technical Commi_ee) 4.   YBhg. Prof. Datuk Dr. Marimuthu a/l Nadason President, Federa0on of Malaysian Consumers Associa0ons (FOMCA)/ Malaysian

Associa0on of Standards Users (Standards Users )

5.   YBhg. Dato’ Muhamad Noor bin Yacob President, Malaysia Automo0ve Ins0tute (MAI)

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