GEORGE TOWN: As Malaysia comes under fire for worker abuse by a global labour rights group, industrial firms in Penang want Putrajaya to allow them to hire foreign workers directly to avoid problems caused by agencies which allegedly profiteer from workers.

Heng Huck Lee, president of The Free Industrial Zone, Penang, Companies’ Association (Frepenca), said the government should allow only direct hiring as a way to circumvent any problems caused by “third parties”.

“Our members want to go direct, but the government does not allow us to do so,” he told The Malaysian Insider.

He added that quotas given to contract companies, which outsource labourers to firms, also contribute to the problem.

Heng was commenting on a recent report by international labour rights group Verite which concluded that a third of the workers in the country’s electronics industry are held in debt bondage.

The report, titled “Forced Labour in the Production of Electronics Goods in Malaysia”, was completed this year after funding was given by the US Department of Labour in 2012.

Based on interviews with 501 workers, the study found that 28% of employees were in situations of “forced labour”, where work is coerced through factors including indebtedness from excessive fees charged by recruiters.

That figure rose to 32% for foreign workers, who are often charged excessive fees that lead to indebtedness. Verite also found that 73% of workers in the sector showed “some characteristics” of forced labour.

Heng said as far as possible, the members of Frepenca, which consists of more than 60 firms including US, Japanese and European giants with plants in Penang, try to get their own workers.

According to the Verite report, one in five workers interviewed was misled in the recruitment phase about the terms of his employment agreement.

“Twenty-two per cent of foreign workers were deceived about their wages, hours, overtime requirements or pay, provisions regarding termination of employment, or the nature or degree of difficulty or danger of their jobs,” the report said.

Verite also found workers’ passports were often retained by recruitment firms, which is prohibited here. — The Malaysian Insider


This article first appeared in The Edge Financial Daily, on September 25, 2014.