The Malaysian Insight

INDUSTRIES do not have the financial means to improve housing for foreign workers as required under a new law, said trade groups.

The situation was bad even before that Covid-19 pandemic and worsened now with the continuing spread of the virus, they said.

Given the current market and economic conditions, they said it is difficult for them to comply with the Workers’ Minimum Standards of Housing and Amenities Act (Act 446), which came into force on September 1.

The accommodation certification was supposed to be completed by November this year.

However, Human Resources Minister M. Saravanan said more than 90% of worker accommodation still do not meet necessary conditions.

When interviewed, local trade and business groups said companies can only comply with the new standards if they have the financial and economical capacity to do so.

Malaysian Employers’ Federation executive director Shamsuddin Bardan told The Malaysian Insight that the requirement means additional costs.

“It is difficult for employers to comply right now due to the Covid-19 pandemic and the financial challenges resulting from it.

“It is better that the government reviews the requirements and see if a better solution can be found,” Shamsuddin said.

He also said there are no guarantees that companies can comply with the new regulations by 2021 as the Human Resource Ministry is targeting.

“Whether companies can comply with the rules depends on the economic conditions, including the pandemic situation. If all is on track then we can comply.”

On companies that fail to meet the new criteria being barred from applying to hire foreign workers, Shamsuddin said it depends on the economic condition and the need for foreign labour.

“The law is the law and we will do our best to follow it. But these are challenges that need to be examined.”

On Saravanan’s statement that 91% of foreign workers’ accommodation have yet to be certified, Shamsuddin said not being certified and not complying to the rules are two different matters.

“Of course, we have to apply for certification now, these are the new rules. But before this there was no need.

“Certification is the new policy but I think more time is needed for businesses to comply as there are many matters they need to address first before they can do so.”

Shamsuddin said the new rules were only announced on August 30 and enforced on September 1, and eventually postponed to November.

“But there are still many complicated issues that have yet to be addressed.”

On the ministry’s intention to increase its manpower for stricter enforcement, Shamsuddin suggests that the government allow employers to self-regulate instead.

“There is no need for inspections, we are capable of self-regulation,” he said.

Cash-flow problems

SME Association of Malaysia president Michael Kang said 90% of small and medium businesses are unable to comply with such requirements.

“It’s impossible for SMEs, there are too many issues, such as having to look for new accommodation when there aren’t enough to begin with, these are huge challenges for SMEs,” he said.

Kang blames the Human Resources Ministry, both under Pakatan Harapan and Perikatan Nasional, for not consulting with businesses before implementing such measures.

“The previous government unilaterally decided on this without discussions. I hope the compliance period can be extended or the policy reviewed, or many companies will be forced to close shop.”

Kang said compliance with the new rules also applies to foreign workers starting next year, which will lead to manpower shortages among SMEs unless they can automate their operations.

“Most SMEs are not capable of meeting the requirements. Even if you push the compliance date to next July, it will still be difficult as this will increase costs and SMEs now are already facing cash-flow issues.”

Kang said if the government insists on the requirements, it will lead to retrenchments among SMEs.

“If businesses can’t meet the requirements, they might simply decide to close shop, and this will have an effect on the economy.”

Kang said even local workers are not entitled to such amenities yet, what more foreign workers.

He hopes that the government can review or adjust the policy, or scrap it entirely and restart from the ground up.

“Do you want to develop the economy or to chase companies out of the country? If employers are unable to hire foreign workers, then many will be forced to close or change industry.”

Act 446 was enforced starting September 1 and Saravanan said only 3,927 applications to certify accommodation were received as of November.

From those applications, only 40% were approved, with the rest either being processed or rejected.

Saravanan also said the rules are meant to curb transmission of Covid-19 and employers who violate them are subject to RM50,000 in fines.

The Peninsular Malaysia Labour Department also told the media earlier this month that only 30% of the 24,000 worker dorms it inspected meet the requirements.

It has also established six sub-committees to discuss the issue of workers’ accommodation. – December 14, 2020.