KUALA LUMPUR (March 24): Sime Darby Plantation Bhd (SDP) on Thursday (March 24) announced the introduction of the RM1,500 monthly minimum wage for all workers at its operations in Malaysia effective May 1.

The plantation group is also introducing additional incentive programmes to boost the productivity of its workforce and attract more locals to the industry, according to its statement.

SDP, which currently employs more than 24,000 plantation workers in Malaysia, said the introduction of the new minimum wage will require a recalibration of hourly or daily rates and a revision of previous benchmarks for wage calculations across the board.

“This will benefit all workers and employees across the board. Coupled with the enhanced productivity incentives, the more attractive take home pay will hopefully appeal to more locals in joining the workforce,” said SDP. 

In addition to wages and productivity incentives, plantation workers at SDP's operations enjoy several other free and subsidised benefits from the company. 

These include free housing for themselves and their dependants, subsidised utilities, free medical treatment for employees and their immediate dependants, and various amenities such as school bus transport for employees' children, child-care centres and recreational facilities. 

Meanwhile, the Association of Malaysian Express Carriers (AMEC) has welcomed the government's move to increase the minimum wage to RM1,500. However, the organisation is of the view that it has been done too abruptly.

In a statement, AMEC said this huge 25% increase will not only affect lower wage earners, but also top officials as the wage scale is realigned, which must be done overall to avoid overlapping wage scales.

"Given the intense 'price competition' in the market between internal and external players in the industry, a country without systematic regulation becomes a thing of impossibility to ensure that all companies in the industry can survive in the long run. 

“Each company is constantly trying to lower its prices below cost in the hope of surviving in this industry, but given the lack of capital, the internal rounds are far more efficient than the local companies compared to the foreign giants, which are able to absorb all the losses in a longer period of time, thanks to the support of the global corporations. All this will eventually cause local companies to wind up because they are not able to continuously make losses year after year.

"This will create a ‘domino effect’ for businesses, and the impact will be greater than expected," AMEC cautioned.

As such, it said the government should play a role that parallels stronger regulation, particularly on minimum pricing and monitoring "fair competition" so that local businesses can continue to survive with financial strength to further boost human capital, recruitment, compensation and employee welfare.