Direct Request (CEACR) - adopted 2004, published 93rd ILC session (2005)

Protection of Wages Convention, 1949 (No. 95) - Malaysia (Ratification: 1961)

The Committee takes due note of the information provided by the Government in its reports.

Article 4, paragraph 2, of the Convention. The Committee has been commenting for several years on the fact that the Labour Ordinance, Sarawak (Cap. 76) and the Labour Ordinance, Sabah (Cap. 67) contain no provision to ensure that allowances in kind offered in addition to money wages are appropriate for the personal use and benefit of the worker and his/her family and that they are fairly and reasonably valued. In this connection, the Committee has been drawing attention to the Employment Act 1955 which offers sufficient guarantees on this point, in particular section 29(2) which empowers the Director-General of Labour to approve any amenity or service or to make such modifications and impose such conditions as he may deem appropriate, and has been requesting the Government to amend the above Ordinances to bring them into line with the Act.

As regards the situation in Sarawak, the Government indicates that the practice of granting benefits in kind is not widespread and is generally confined to the plantations sector and wood-processing industries where accommodation, water and electricity are provided free of charge. As to the application of Article 4 in Sabah, the Government reiterates its intention to amend the Labour Ordinance (Cap. 67) to bring it into line with the provisions of the Employment Act 1955 which is enforced in Peninsular Malaysia and indicates that at present the provision of additional remuneration in kind is subject to agreement between the parties to an employment contract. The Government adds that whereas the labour inspection services conduct regular inspections to ensure that there are no abuses in granting benefits in kind as an alternative to granting inferior rates of wages, the need of the worker’s consent as a prerequisite for any payment in kind allows the parties to assess independently whether the remuneration offered would be appropriate and beneficial or fairly valued.

In this respect, the Committee is bound to recall that the Convention is clear in providing that the conditions governing payments in kind have to be regulated by legislation, collective agreement or arbitration award, and not left to individual agreements between employers and workers. The Committee wishes also to refer to paragraph 149 of the 2003 General Survey on protection of wages in which it emphasized that the rationale behind Article 4 of the Convention is that whenever wage conditions, such as payment in kind, deductions or pay intervals, are left to be freely determined by the two parties in the employment relationship, there is a real risk of abuse since the employee is generally in a weaker position and therefore often ready to accept the conditions offered by the employers, however onerous or unfavourable. The Committee again asks the Government to take the necessary measures without further delay in order to give full effect to this Article of the Convention in the States of Sarawak and Sabah and to inform the Committee of any positive developments in this respect.

Article 13, paragraph 1. The Committee notes the Government’s explanations concerning the increasing use in the State of Sabah of electronic bank transfer for the payment of wages. The Government indicates that it is not uncommon among employers to effect the payment of workers’ wages by crediting the workers’ personal accounts with any banking or financial institution legally operating in the State. For this reason, the necessity to impose provision for the payment of wages on working days only and at or near the workplace is not considered to be a pressing requirement. The Committee takes note of this information but wishes to draw the Government’s attention to paragraphs 400 and 413 of the abovementioned General Survey in which it considered that any formal arrangements regulating the payment of wages by postal or bank transfer would appear to fall well within the exceptions permitted by Article 13, paragraph 1 (that is exceptions "provided by national laws or regulations"), and would therefore pose no problem in regard to this Article, but also stated that the provision of this Article of the Convention is undoubtedly still relevant in a large number of countries, notably with regard to labour remuneration practices concerning agricultural workers. The Committee therefore hopes that on an appropriate occasion measures will be taken to ensure the application of the requirements of the Convention regarding the place and time of wage payment, especially in those occupations or branches of activity where the payment by bank transfer, or other non-cash methods of payment, is not practicable or generalized.

Part V of the report form. The Committee notes the statistical information supplied by the Government concerning the activities of the labour inspection services for 2000-03 in the State of Sabah. The Committee would be grateful if the Government could continue to provide full particulars on the effect given to the Convention in practice in Peninsular Malaysia, Sabah and Sarawak.