labour situation in m'sia
TRANSCRIPT
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place of employment means
any place where work is carried on for anemployer by an employee;
employee means
any person or class of persons
(a) included in any category in the First Schedule tothe extent specified therein; or
(b) in respect of whom the Minister makes an order
under subsection (3) or section 2A;
EMPLOYMENT ACT 1955
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EMPLOYMENT SENARIO Place
of employment
Types ofEMPLOYERSTypes ofWORKERS
Types ofCONTRACTS
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Types of EMPLOYERS
employer means any person who has enteredinto a contract of service to employ any other
person as an employee and includes the agent,
manager or factor of such first mentioned person,
and the word employ, with its grammatical
variations and cognate expressions, shall be
construed accordingly;
EMPLOYMENT ACT 1955
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Principal means any person who in the course ofor for the purposes of his trade or business
contracts with a contractorfor the execution by orunder the contractor of the whole or any part ofany work undertaken by the principal;
Contractor means any person who contractswith a principal to carry out the whole or any partof any work undertaken by the principal in thecourse of or for the purposes of the principalstrade or business;
EMPLOYMENT ACT 1955
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Sub-contractor means any person who contracts with acontractorfor the execution by or under the sub-contractor ofthe whole or any part of any work undertaken by the
contractor for his principal, and includes any person whocontracts with a sub-contractor to carry out the whole or anypart of any work undertaken by the subcontractorfor acontractor;
Sub-contractor for labour means any person who contractswith a contractor or sub-contractor to supply the labourrequired for the execution of the whole or any part of anywork which a contractor or sub-contractor has contracted tocarry out for a principal or contractor, as the case may be;
EMPLOYMENT ACT 1955
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LocalWORKERS
DirectApplication
(orwalk-in)
Job MalaysiaMOHR JTK
PrivateEmployment
Agency
FACTORY(Principle Employer)
PLACEMENT
PROBATIONfollowed by
PERMANENTContract
Temporary(FIX TERM)
contract
LOCAL Workers seeking employment
PRIVATE EMPLOYMENT AGENCY ACT 1981
20% commission of 1st Monthswage charged on placement. Paideither by employer or the worker.
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MigrantWORKERS
Contract of Service/Temporary(FIX TERM)
contract
FACTORY(Principle Employer)
MIGRANT Workers employment
EMPLOYMENT (RESTRICTION) ACT 1968
Non-citizen shall not be
employed unless there has
been issued valid
employment permit.
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MigrantWORKERS
Contract of Service/Contract for Service
Temporary(FIX TERM)
contract
Labour Contractors(Outsource Company)
FACTORY(Principle Employer)
FACTORY(Principle Employer)
FACTORY(Principle Employer)
TODAY
TOMORROW
THE DAY AFTER
MIGRANT Workers employment
No Law to regulate?Outsourcing License No.,Recruitment No. KHEDN.
Labour Contractors(Outsource Company)Labour Contractors
(Outsource Company)
NOW.LOCAL Workers also
follow the same flow!
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LocalWORKERS
PROBATIONfollowed by
PERMANENTContract
Temporary(FIX TERM)
contract
FACTORY(Principle Employer)
Job MalaysiaMOHR JTR
CONTRACTOR(Outsource Company)
Directapplication
PrivateEmployment
Agency
Placement
Contract of Service/Contract for Service
Temporary(FIX TERM)
contract
RM$wages
RM$wages
Workers seeking employment
MigrantWORKERS
FACTORYPrinci le Em lo er
FACTORY(Principle Employer)
FACTORY(Principle Employer)
Workers seeking employment in Malaysia
TODAY
THE DAY AFTER
TOMORROW
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Types of WORKERS
Employed directly by Employer or Principal :
1. Permanent workers
2. Local contract workers (Fix-term)
3. Foreign contract workers (Fix-term)------------------------------------------------------------------------------------------------------------------------------
Supplied by Labour Contractorsbut work for Principalemployer PAID BY Labour Contractor:
4. Local contract workers (Fix-term)
5. Foreign contract workers (Fix-term)
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Types of CONTRACTS
1. Employment Contract is a CONTRACT OFSERVICE
(Kontrak Perkhidmatan)
2.Service Contract is a
CONTRACT FOR SERVICE
(Kontrak untuk Perkhidmatan)
(not an employment contract)
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Contract OF Service
(Kontrak Perkhidmatan)
Any agreement between two parties an employer and
an employee, where by:
The employer agrees to employ another as anemployee; and the employee
agrees to undertake certain duties under the
direction and control of the employer.
agrees, in return for a specified wage or salary and
benefits under a terms & conditions of employment
from employer.
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Terms and Conditions of Employment
The employer cannot change the terms andconditions of employment unless employee agreesto it.
Any terms and conditions, in a contract of service,that is less favourable than the relevant provisionunder the Employment Act (1955) is illegal, null andvoid.
Provision in the Act will take precedence over aparticular contractual term that is less favourable.
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An apprenticeship contract or agreement is also
considered a contract of service
Agreement, whether oralor in writing and
whether express or implied.
Oral contract in writing? How?
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Employment Act in 1955
With the introduction of the EA, the then British Administrationeffectively abolished the indenture labour, bonded labour and the
kanggani system in Malaya, as it was known then.
The totality of the Employment Act 1955 established two veryimportant principles of law.
They are:
Security of tenure ensuring permanence of job and
Proprietary right to the job where termination of worker, shallbe with just cause and excuse & by due process.
These principles are trite law and are considered sacrosanct.
MUST be protected at all cost!
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Permanent Contract (permanent workers)
Direct hire (Company workers)
- local workers
Fixed Term Contract -
(temporary orcontract workers)
Direct hire (Company workers)- Locals & Foreign workers
Types of
Contract OF Service
(Kontrak Perkhidmatan)
contract FOR service
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engaged as an independent contractor
(such as a self-employed person or vendor) .
engaged for a fee to carry out an assignment, duty or aproject for the company.
there is no employer- employee relationship, therefore,
NOT covered by the Employment Act
contract FOR service(not an employment contract)
(Kontrak untuk Perkhidmatan)
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TERMS & CONDITIONS of work
for CONTRACT workers
Hours of Work: 1 Shift 12Hours Wages: basic RM 400 RM 450
Overtime: fixed amount, does not follow rates fornormal days, rest days & public holidays OR none.
Annual leave, Public holidays pay, Sick leave, Maternityleave - Not mandatory.
No payment for legally mandated breaks.
Pay cut for absent or late for work or on sick leave or onannual leave.
Toilet breaks monitored 2x for 12 hour shift Accommodation & Transport provided FoC.
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Fixed Term Contract -
(temporary orcontract workers)
workers hired by Outsourced Company to work in
the principle company.
- Locals & Foreign workers
Types of
contract FOR service
(Kontrak untuk Perkhidmatan)
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There is no single conclusive test to distinguish a contract of employment from a contractfor services. Some of the factors to be considered in identifying a contract ofemployment include:
i) Control
Who decides on the recruitment and dismissal of employees? Who pays for the employees' wages and in what ways?
Who determines the production process, timing and method of production?
Who is responsible for the provision of work?
ii) Ownership of Factors of Production
Who provides the tools and equipment? Who provides the working place and materials?
iii) Economic Considerations
Does he carry on business on his own account or carry on the business for the employer?
Does he involve in any prospect of profit or is he liable to any risk of loss?
How are his earnings calculated and profits derived?
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Essential Clauses of Contract of Service :
Commencement of employment;
Appointment job title and job scope;
Hours of work;
Probation period, if any;
Remuneration;
Employee's benefits (e.g. sick leave, annual leave,
maternity leave);
Termination of contract notice period; and Code of conduct (e.g. punctuality, no fighting at work).
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LAWS ON PROTECTION OF
RIGHTS OF WORKERS
STATUTE Employment Act 1955
Industrial Relations Act 1969
Trade Unions Act 1959
Workmens Compensation Act 1952
Occupational Safety and Health Act 1994 Social Security Act 1969
Immigration Act 1959/63
Contract of Employment
The contract of employment stipulates terms and conditions on duration,wages, work shift, days off, sick leave, medical fees, payment of levy, visa,medical and travel.
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1. Companies advertise job vacancies in front of theirfactory gates.
2. Companys own Human Resource officer interviews
and identify potential candidates.
3. Identified candidates - sent to sign a contract with anoutsource company, usually without receiving a copy.
Is the contract a contract for service orcontract of service?
Modus operandiin getting permit for foreign workers.
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The successful candidate
4. Handed over to company Human
Resource officer.5. Provided with the company badge with a
unique Number to denote contract workers.
6. One week orientation and work
process training.7. Successful candidates sent to the Assembly
line supervisor to start work ascontract
labour.Workers not aware of the type of contract!
N i b l i d
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Not wanting to be exploited..
Locals QUITin PROTEST!(albeit SILENTLY !)
Applying for PERMIT
Due to the high attrition of contract labour.
company applies to the government agencies (MOHR &
KDN) for permit to bring in foreign workers.
The reasons often cited local workers are not keen on menial jobs,
that they are pampered and like to lepak. TREATEN to relocate operation to third country
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Tidak berminat berkerja lebih masa dan syif Terlalu memilih kerja
Minat ganjaran yang tidak setimpal dengan produktiviti
Tidak bersedia belajar kemahiran baru dan kerja pelbagatugas
Sukar menerima sistem kerja baru
Mementingkan masa untuk riadah dan keluarga
Sikap Pekerja Tempatan
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Facts not mentioned are:
that the wages and benefits are intentional madeunattractive,
with unfair and archaic terms and conditions ofservice (Pre-Employment Act era).
The silent protest.
B kd f t f Em l m t t t i Am i S mi d t A mbl
Breakdown of types of Employment contract in an American Semiconductor Assembly
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Breakdown of types of Employment contract in an American Semiconductor Assembly
Plant of semi-skilled workers and Production Operators in Dec 2007
Company
1028 48 %Permanent Contract of Service
for local workers
110 5 %Temporary Contract of Service
for local workers
(3 to 6 months renewable)
810 38 %Temporary Contract of Service
for foreign workers
(2 years renewable)
Employment
Agency210 10 %Local contract workers
TOTAL 2158 100 %
Breakdown of types of Employment contract in an American Semiconductor Assembly
Plant of semi-skilled workers and Production Operators in Dec 2007
Cost Comparison - Local vs Migrant worker/per month (RM)
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Cost Components Local worker Migrant worker
Basic Salary (as at end-2007) 503 503
SRA 47 47
Contractual Bonus (1 mth) 42 42Performance Incentive (1 mth) 42 42
Shift Allowance 76 76
Life Insurance 3 3
Medical coverage 64 64
Transportation 215 193EPF 89 nil
Levy & Visa nil 110
Recruitment Fee nil 30
Medical (Fomema) nil 16
Hostel accommodation nil 230Workman Compensation nil 6
Air fare nil 40
Total (RM) 1,081 1,402
Percentage 100% 130%
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PURPOSE OF COMPANY
to make profit.
Corporate headquarters sets target that
labour cost should not exceed 6% of themanufacturing cost.
Hiring foreign workers will escalate cost of
labour by 30%.
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Local Management to achieve the target
Wages & benefits are controlled :
to subsidise the 30% additional labour cost in
hiring foreign labour.
maintain the 6% labour cost.
without affecting the companys bottom lineprofit.
Leading to current reality
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Bruno Periera 33Race to the Bottomunabated
Leading to current reality..
wages & benefits of the local workers are depressed
artificially.
type of employment contracts have deteriorated
progressively
replace local permanent contract
with foreign contract labour.
substitute with local contract labour
Standard of living deteriorates while cost of livingescalates.
Compan achie es
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Company achieves:
Low wage cost.
Disposable labour - hire & fire.
Flexi-labour Multi-skilling/Multi-tasking.
Plug & play workers. (minimal training)
No union (No negotiation powers)
Subservient workforce.
Convert workers wages into profits.
Huge wages & bonus payout- Top Mgmt
Perlumbaan menuju ke dasar .
High contract labour % improves NAV
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High contract labour % improvesNAV(Net Asset Value) of company.
by transferring labour cost to overhead /operation cost putting Companys stock
price looking good to shareholders.Creative accounting.
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Problem solving technique
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Problem solving technique.
INVESTIGATE (Past):
How did the problem start?
Who started the problem?
When did the problem start?
Why did the problem start?
Where did the problem start?
-------------------------------------------------------------PLAN OF ACTION (Future):
How to overcome the problem?
Who overcome the problem?
When to overcome the problem?
Why should we overcome the problem? Where to begin the change?
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HOW IT ALL STARTED?
It always starts small.
and grows .. and grows
finally accepted as NORMAL
PEKERJA ASING (PA)
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PEKERJA ASING (PA)
LATAR BELAKANG
1992- Kerajaan meluluskan PA daripadaASEAN, Bangladesh, India dan Sri Lanka
untuk sektor pembinaan dan perladangan.
2000 - Diperluaskan kepada sektor perkilangandan perkhidmatan (hotel dan restoran).
2002 - Meliputi semua sector
Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
OUTSOURCING
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OUTSOURCING(MEMBEKAL & MENGURUS)
2005
Mesyuarat Jawatankuasa Kabinet mengenai
Pekerja Asing (JKK-PA) ke-33 Bil. 2/2005 pada
5 Julai 2005 telah BERSETUJU untuk
menggaji PA melalui konsep
OUTSOURCING.
Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
Outsourcing concept:Outsourcing is a concept where the management and supply services are
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g p g pp yundertaken bycompanies selected by the government. The governmentshall select and supervise these companies who are reliable to beresponsible to recruit, supervise and manageforeign workers and presentthe workers to customers who need them under the outsourcing concept.
Aim:
The implementation of outsourcing aims to assist to overcome the problems ofshortage of workers and small companies who do not have the resources tomanage foreign workers full time will save cost. It will also helpcompanies/management who needs large workforce from time to time
especially to fulfill additional increase in contractual obligations,for peakseasonal collection of harvestand so on.
Management:
The management of foreign workers shall be managed in an orderly andsystematic manner. Accommodation, transportation, payment of wages ofRM400, medical examination including insurance coverage shall be underthe outsourcing company.
Sumber:LaporanPesidangan Meja Bulat Mengenai Penggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
2006 Terdapat jumlah 1 800 000 PA
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2006Terdapat jumlah 1,800,000PA
Negara sumber utama: Indonesia 1,174,000 (63%)
Nepal 214,000 (11%)
India 138,000 ( 7%)
Myanmar 109,000 ( 6%)
Vietnam 106,000 ( 6%)
Bangladesh 63,000 ( 3%)
Lain-lain 64,000 ( 4%)
Pembahagian PA mengikut sektor
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g g
Pembuatan - 646,000 (35%)
Perladangan - 354,000 (19%) Pembantu Rumah - 311,000 (17%)
Pembinaan - 268,000 (14%)
Perkhidmatan - 167,000 ( 9%)
Pertanian - 123,000 ( 7%)
Jumlah PA = 1,800,000 (100%)
IMPAK P k j A i
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IMPAK Pekeja Asing
Dari Segi Ekonomi:
Kesan Positif:
Menyumbang RM 17b (5.1%) kepada KDNK RM 8.3b (5.2%) kepada perbelanjaan persendirian
RM 1.2b levi kepada hasil kerajaan (2004)
Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
Kesan Negatif:
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Kesan Negatif:
Remit RM 5-7b setahun ke negara asal
Kos perkhidmatan kesihatan RM117j Kemunculan semula penyakit tibi, malaria dan
untut serta membawa penyakit baru seperti kala
azar (Leishmaniasis).
Mengurangkan tekanan kepada majikan bagi
memperkenalkan automasi dan mekanisasi
Mengurangkan tekanan ke atas kenaikan gaji
Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
Dari Segi Sosial:
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Kesatuan sekerja terancam
Mengekang kadar upah dan jejas peningkatan
taraf hidup rakyat
Menjejaskan kerukunan sosial
Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
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Demographics (Dept. of Statistics, 2006)
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POPULATION 26.63m
- Women 13.07m
- Men 13.56m
EMPLOYMENT 10.9m
- Private sector 5.2m
- Public sector 1.1m- Informal sector 4.6m
Labour Participation rate:
- Women 46% 4.0m
- Men 86% 6.9m
UNEMPLOYMENT 3.5%
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Percentage of Foreign Workers againstPrivate sector employees:
1.8m/5.2m = 34.6%
Sumber: Laporan Pesidangan Meja Bulat MengenaiPenggajian PA Di Msia - 5-Apr 2007 ISMK - KSM
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NOW it grows to
take over
employment fromlocals!
New Straits Time - July 20, 2008i t i ith D t k I h k M h d
Malaysian Trades Union CongressLABOUR BULLETIN July 2008
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interview withDatuk Ishak Mohamed,Enforcement Director Immigration Department
Q: Should foreign labour outsourcing be banned?
A: Outsourcing is the best solution for the governmentto manage foreign workers.
Q: Why?A: There are two scenarios
One is that as companies get bigger, they will need more
manpower and with outsourcing they can get workers in amore organized way.Two, outsourcing is good as it will attract foreign directinvestment. Investors will not want unions to be formed intheir establishments.
Through outsourcing, it would be difficult for unions to beformed as outsourcing company, and not the factory, would bethe employer.
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Monday, September 21, 2009, 02.03 PM
Labour director-general Datuk Ismail Abdul Rahimsaid yesterday.
We have introduced a quota system, where for
the manufacturing sector dealing in exports it is twoforeigners to one local and
one local to one foreignerfor all othersectors," he said.
Cabinet Committee on Foreign Workers
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Deputy PM: Tan Sri Muhyiddin Yassin.
The Laboratory*, had been directed to putoutsourcing companies under the microscope toensure that they stick to their role as providers of
workers and NOT as EMPLOYERS.
277 registered outsourcing companies.
Laboratory 8 ministries and 15 agencies.
The Star Tue 23-Feb 2010
and Illegal Workers.
Malaysian Labour Markets
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Labour Market : Regulated by Employment laws.
Employer to submit returns (S62 EA) statistics Do not include outsource / contract workers
Transparent.
Labour Black Market : Not sanctioned by law.
Statistics not available.
Involves outsource / contract workers.
Existing parallel to Labour Market
Undergroundillegal?
Statement by
THE HONOURABLE DATUK DR.S.SUBRAMANIAM
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MINISTER OF HUMAN RESOURCES, MALAYSIA
AT THE 98TH SESSION OF
THE INTERNATIONAL LABOUR CONFERENCE GENEVA.THURSDAY, 11 JUNE 2009.
------------------------------------------------------------------------------
It is imperative that we take this crisis (Global Economic Crisis) as anopportunity to reaffirm our commitment to the principles of DecentWork and through such commitment the dignity and the rights ofworkers, as enshrined in the principles of Decent Work should continueto form the basis of the national agenda for our respectivegovernments.
In Malaysia, we have instituted high ranking tripartite monitoringmechanisms very much early in the crisis to ensure that the economicconsequences of this crisis does not step on the rights of our workersas prescribed in the Constitution and in the laws of the country.
Principles of Decent Work
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Decent work is captured in four strategic objectives:
fundamental principles and rights at work andinternational labour standards;
employment and income opportunities;
social protection and social security; and
social dialogue and tripartism.
Decent work is central to efforts to reduce poverty, and is
a means for achieving equitable, inclusive and sustainabledevelopment.
D k h i i f l i h i
Principles of Decent Work
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Decent work sums up the aspirations of people in theirworking lives. It involves
opportunities for work that is productive and delivers afair income,
security in the workplace and social protection forfamilies,
better prospects for personal development and socialintegration,
freedom for people to express their concerns, organizeand participate in the decisions that affect their lives and
equality of opportunity and treatment for all women andmen.
CONTRACT LABOUR SYSTEM
i AGAINST D k d
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is AGAINST Decent work agenda.
DOES NOT provide opportunities forwork that is productive.
DOES NOT deliver a fair income.
NO security in the workplace and social
protection for families.
NO prospects for personal developmentand social integration.
Employment Act in 1955
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With the introduction of the EA, the then British Administrationeffectively abolished the indenture labour, bonded labour and thekanggani system in Malaya, as it was known then.
The totality of the Employment Act 1955 established two veryimportant principles of law.
They are:
Security of tenure ensuring permanence of job and
Proprietary right to the job where termination of worker, shallbe with just cause and excuse & by due process.
These principles are trite law and are considered sacrosanct. MUST be protected at all cost!
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Bruno Periera