INDONESIA’s decision to suspend its workers from coming to Malaysia is set to prolong the chronic labour shortages faced by all sectors of the economy, Malaysian Employers Federation said today.

Its president Syed Hussain Syed Husman said efforts by businesses to bring back their operations to pre pandemic levels would be hampered by this suspension.

He added that Indonesia was an important source country for the supply of foreign workers, supplying about 35% of foreign workers.

The supply of domestic workers from Indonesia was even more critical as they made up about 70% of all domestic maids in Malaysia, he added.

“It is very critical for the government to iron out any outstanding matters so as to ensure that the smooth supply of foreign workers will not be disrupted.”

“Employers had endured shortages of foreign workers for a long time and these shortages had caused operational disruptions to their businesses.”

“Some businesses in the manufacturing sector had to turn down new orders for fear of not being able to meet the deadlines,” he said.

Syed Hussain said that construction companies had to bear penalties for late deliveries while restaurants were being bombarded with complaints from customers for slow service.

Hotels were also being criticised for not being able to check in guests on time due to rooms not being ready, he said.

It was reported today that Indonesia decided to stop receiving new job orders for workers in all sectors due to an alleged breach of the MOU signed in April 2022 between the two governments.

The alleged breach is over the continued use of the Sistem Maid Online (SMO) by the authorities here when based on the MOU, recruitment of domestic maids can only done through the One Channel System (OCS).

The use of OCS was agreed in the memorandum to screen employers and ensure that only those eligible could hire Indonesian domestic workers at a minimum salary of RM1,500 per month.

Approval sought to hire refugees, paroled prisoners

Syed Hussain said that to overcome the labour shortage, the government must allow employers to hire refugees and paroled prisoners.

“These people with the special approval of the government may be deployed immediately to fill up the acute shortage until new foreign workers arrive.”

“Employers need the new workers urgently to assist in their recovery efforts and put their businesses on the right path.”

“We need to look for quick solutions as short gap measures until all issues on foreign labour recruitment are resolved,” he said.

In the meantime, MEF also proposes the government arranges for more foreign workers from other source countries such as Nepal, Pakistan, Cambodia, Laos and Philippines to be recruited. – July 13, 2022.