KUALA LUMPUR (July 6): The Malaysian Employers Federation (MEF) said wage levels should be based on an individual's certified skills instead of adhering to a levelled starting pay guideline, to improve productivity of the nation.

Speaking after a briefing with the Council of Eminent Persons here today, MEF president Tan Sri Azman Shah Datuk Seri Haron said MEF was pleased with discussions, as there is a view that the government is considering a new thinking of managing foreign workers, minimum wages and labour issues in general.

Azman Shah was present along with MEF executive director Datuk Shamsuddin Baran for the briefing.

The federation today suggested to the council to consider policies on the rehiring of senior workers up to 65 year of age, and on strengthening women's participation in the workforce to 65%, from 60% at present.

“More or less, we can have an additional of two million workforce [personnel], who are not currently being employed very much. Also, local workers should not be paid minimum wages, they should be paid wages based on their certified skills,” Shamsuddin Baran said.

The federation also suggests linking wages with employees’ Malaysian Skills Certificate (SKM) level, as well as for authorities to assist in funding, he said.

“If someone has the SKM1 certification, they shouldn’t be paid minimum wages like foreign workers. They should be paid higher wages, something like RM1,200, RM1,300 and so on. Those on SKM4 should be paid even higher than minimum wages,” he said.

“What MEF has suggested is that the government comes up with special funding to allow this to happen. For example, the use of some of the Human Resources Development Fund to certify skills of employees, especially based on recognition of prior learning program,” Shamsuddin said.

Under the present scheme, employees who are keen to be certified will have to bear their own costs of about RM300 per certificate, he added.

Currently, only about 30% of the Malaysian workforce consists of skilled workers and the nation’s ambition to achieve 34% by 2020 is untenable, as employees do not see any monetary returns attached to obtaining skills certifications, Shamsuddin said.

This is because the existing system is based on a starting pay guideline for each of the 160 outlined job positions that are not further differentiated by skill levels, he added.

“What we are trying to push further is to attach it to the skill, so that there are more productivity-driven [positions] in the long run. The higher wages must come from productivity improvement,” Shamsuddin added.

On foreign workers, Azman Shah said the federation has proposed for the government to rejig policies for better clarity, moving forward, as current policies are observed to be incoherent, with overlaps between ministries.

“The employees and employers are confused, and there are parties taking advantage of this situation. Unfortunately, that is not for the better of the country,” he added.