Institutional Framework of MW in Malaysia - T Shanmugam

Ministry of Human Resources
Malaysia
INSTITUTIONAL FRAMEWORK OF
MoHR
MINIMUM WAGES IN MALAYSIA
By:
T. Shanmugam
Secretary
National Wages Consultative Council
Malaysia
at
National Minimum Wage:
Symposium & Policy Round Table
Johannesburg, South Africa
2 – 4 February 2016
Outline of Presentation
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
Part 1 : Institutional Framework of MWs
in Malaysia
CABINET Transforma0on Commi2ee on Facilita0ng the Implementa0on of Minimum Wages Policy NWCC Chairman: Chief Secretary to the Government Members: Related Central Agencies and Ministries 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 Chairman: Deputy Chair NWCC Members: Tripar0te Deputy Chair NWCC Members: Tripar0te Chairman: 3 Part 2 : How Malaysia Implements MWs?
1. 
Through an Act of Parliament – Na0onal Wages Consulta0ve C o u n c i l A c t 2 0 1 1 ( A c t 7 3 2 ) – c a n b e a c c e s s e d : 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
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) 5
Chairman Deputy Chairman Secretary 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)] Secretariat 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 Sec 5 (A2achment A: Names and Posi0on of NWCC) 6
Part 5 : Key Features of NWCC
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; cont… 7
Part 5 : Key Features of NWCC
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; cont… 8
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
Part 6 : Role of Minister of
Human Resources
1.  Appointment date of enforcement of Act 732; 2.  Appointment of NWCC members; 3.  Revoke appointment of NWCC members; Honourable Minister of Human Resources (Hon. Richard Riot Anak Jaem) 4.  Makes the MW Order; and 5.  Make Regula0ons. 11
Part 7 : Selection Committee (SC)
v 
v 
1. 
2. 
3. 
i. 
ii. 
iii. 
iv. 
v. 
To scru0nize CV and recommend appointment of MW Technical Commi2ee Members to NWCC SC comprise of: -­‐ Chairman – NWCC Deputy Chairman Deputy Chairman – MW Technical Commi2ee Chairman Members: 2 Government Group of NWCC members; 2 Workers’ Group of NWCC members; 2 Employers’ Group of NWCC members; 2 Independent (Others’) Group of NWCC members; and Secretary from NWCC Secretariat. 12
Part 8 : MWs Technical Committee
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 9: Process of Setting MWs
in Malaysia
1. Public Consulta0on by Technical Commi2ee 2. Extensive delibera0on in Technical Commi2ee 6. Minister of Human Resources makes the Order 5. Cabinet Agree 10. Cabinet determine conclusively (2nd 0me) 7. Cabinet Disagree 9. NWCC submit fresh recommenda0on to Cabinet 8. NWCC reconvene 3. Technical Commi2ee recommends to NWCC 4. NWCC deliberate and submit Recommenda0on to Cabinet 14
14
Part 10 : NWCC Meetings
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. 15
11 : Enforcement of NWCC
16
Complaints Relating to Minimum Wages
(2014 & 2015)
No. of Complaints Filed 1 600 1 389 1 400 1 200 1 000 Reduced by 67.38 % 800 453 600 400 200 0 1 2014 Source : Secretariat, NWCC 2 2015 Year 17
Trade Dispute Cases Relating to
Minimum Wages (2014 & 2015)
No. of Cases Filed 50 45 40 35 30 25 20 15 10 5 0 46 Reduced by 78.26 % 10 2014 1 Source : Secretariat, NWCC Year 2015 2 18
Prosecutions Relating to
Minimum Wages (2014 & 2015)
Source : Secretariat, NWCC 19
Minimum Wages Statutory Inspection
(2014 & 2015)
No. of Companies 99% complied 90 000 81 200 80 000 80 028 70 000 60 000 50 000 40 000 30 000 20 000 1% not complied 10 000 1 172 0 No. of Inspec0on Source : Secretariat, NWCC No. of Compliance No. of Non-­‐Compliance 20
Claims Relating to Minimum Wages
at Labour Court (2014 & 2015)
1 200 1 111 1 000 Reduced by 44.37 % 800 618 600 400 200 0 Source : Secretariat, NWCC 2014 1 Year 2015 2 21
12 : Conclusion
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. 22
Thank You
shan@mohr.gov.my h2p://minimumwages.mohr.gov.my/ Attachment A
Chairman Deputy Chairman Secretary MEMBERS OF NATIONAL WAGES CONSULTATIVE COUNCIL (1 OCTOBER 2015 TILL 30 SEPTEMBER 2017) YBhg. Tan Sri Datuk Amar Steve Shim Lip Kiong (Member of Judicial Appointments Commission) -­‐ Former Federal Court Judge 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) Mr. T. Shanmugam Ministry of Human Resources (MoHR), Malaysia 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) Employers Representa=ves 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… 24
Attachment A (cont..)
Employees Representa=ves Government 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) 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… 25
Attachment A (cont..)
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 Others / Independent Execu=ve Director, Malaysian Ins0tute of Economic Research (MIER) (also the Deputy Chairman of the MWs Technical Commi_ee) Representa=ves 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) BACK 26