WHILE workers have been able to enjoy a rise in minimum wage from RM1,200 to RM1,500 effective May 1, union watchers said this was largely due to the government’s efforts to improve their livelihoods.

This, they said, also showed the drastic drop in the role and influence of unions in protecting workers.

They said poor leadership, foreign workers, automation and outdated laws have played a role in weakening unions.

“The fact we have to wait for the government to determine minimum wage shows how far trade unions have fallen behind,” said Klang MP Charles Santiago.

“That the government had to intervene to raise wages shows to a certain extent how collective bargaining and free market principles have failed workers.”

After more than a decade of enforcing the National Wages Consultative Council Act in 2011 with RM900 per month, Malaysia’s minimum wage now stands at RM1,500 from this month. 

In comparison, the minimum wage in Indonesia has gone up 2.5 times in the same period, rising from 1.68 million rupiah (RM506) per month in 2012 to 4.6 million rupiah this year.

The federal order to raise wages was gazetted on April 27. Employers with fewer than five workers are, however, exempted from the order.

And while the decline of the labour movement in Malaysia is partly due to poor union leadership, Santiago said automation, contract labour and outdated laws have stifled union growth.

“Take the Trade Unions Act for instance. This law, which started in 1959, has hardly been updated and still curbs union growth,” he said.

“Those seeking to start unions have to go through stringent processes and make it very hard for them to start.”

Other government orders, such as the prohibition of a national union in the electronics industry, further weakens the union movement, he said.

Automation, labour contractors

One union that has been affected by change and the switch to labour contractors is the National Union of Plantation Workers (NUPW).

From 112,000 members in 1982-84, NUPW now has fewer than 35,000 members.

“NUPW normally averaged above 100,000 members with peaks of 112,000 in 1964 and 1982. But our membership has been reduced due to crop switches in the 1960s,” said NUPW executive secretary A. Navamukundan.

He said this was worsened when plantation companies replaced local Indian workers with foreign labour and used labour suppliers instead.

According to Navamukundan, Malaysia began replacing rubber crops with oil palm and cocoa in the mid-1960s.

He said labour requirements in oil palm plantations are about half of what is required in rubber plantations.

Following government intervention, oil palm grew from 122,000ha in 1965 to 3.5 million ha in 2001.

Rubber, on the other hand, shrunk from 753,000ha in 1965 to 169,000ha in 2001, as a result of switching from rubber to oil palm.

These changes caused a temporary labour surplus on some plantations and workers migrated to other plantations or to urban areas in search of employment, he said.

The “labour shortage” areas were where new plantations developed, for example, Pahang Tenggara, Terengganu Tengah and Lembaga Kemajuan Kelantan Selatan.

“The plantations in these areas then used people employed through contractors rather than follow the traditional method of maintaining labour on the plantations,” said Navamukundan.

“As such, workers were brought in from Indonesia, Thailand, Myanmar, the Philippines, Cambodia, Sri Lanka, India, Nepal and Bangladesh.”

He said the use of contract workers had also caused the union to shrink.

“Employers prefer foreign workers, supplied by contractors, as they do not have to bear long-term costs for these workers,” said the former Universiti Malaya lecturer.

“They want them to come and work and then go back to their home countries when their contracts end.”

Fortunately for plantation workers in Malaysia, the switch to oil palm (which is considered a food crop), has also forced the government to ensure some minimum standards.

“Palm oil is a sought-after product in the world and as such, has to meet certain requirements such as Roundtable of Sustainable Palm Oil (RSPO),” said Navamukundan.

Although not all plantations (particularly smallholders) have complied with RSPO, the government has set up its own standards called the Malaysian Sustainable Palm Oil.

“Together with the government, NUPW has helped plantations meet 90% of the worker standards set by the International Labour Organization and so on,” said Navamukundan.

But while NUPW has maintained its niche despite the smaller size of membership, other unions such as the Transport Workers Union (TWU) and National Union of Bank Employees have not been so fortunate, he said.

“Automation in the banking industry has significantly reduced the size of NUBE and the consolidation of bus workers has greatly cut the size of TWU,” he added. – May 9, 2022.