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

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2020, published 109th ILC session (2021)

The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

Direct Request (CEACR) - adopted 2018, published 108th ILC session (2019)

The Committee notes with regret that the Government’s report has not been received. It hopes that the next report will contain full information on the matters raised in its previous comments initially made in 2013.

Repetition

Article 4(2) of the Convention. Partial payment of wages in kind. The Committee recalls that section 116(1) of the Labour Ordinance of Sabah (Cap. 67), as amended in 2005, allows for accommodation, food, fuel, light, water, medical attendance or other services, as may have been previously approved by the Director of Labour, to be provided in addition to cash wages. In accordance with section 113(5) of the same Ordinance, however, the Director of Labour may not permit any deduction from wages in terms of accommodation, food and meals unless she/he is satisfied that the provision of these services is for the benefit of the employee. The same provisions are also reproduced in sections 114(5) and 117(1) of the amended Labour Ordinance of Sarawak (Act A1237). In its previous comments, the Committee observed that there might be the need to verify that the in-kind benefits in question are also fairly and reasonably priced and suggested that the Government should consider some legislation action in this respect. In its latest report, the Government indicates that to date there have been no cases in which the Director of Labour considered an application for partial payment of wages in the form of in-kind benefits. The Committee trusts that should any problem arise in the future the Government will contemplate the possibility of reviewing the relevant provisions in accordance with the requirements of Article 4(2)(b) of the Convention.

Article 13(1). Place and time of the payment of wages. In its previous comments, the Committee drew the Government’s attention to the need to take appropriate action to ensure that the requirements of the Convention as regards the time and place of payment of wages are fully met in those sectors where payment by electronic bank transfer is not yet generalized or practicable. The Committee notes with satisfaction that section 111(3) of the amended Labour Ordinance Sarawak and section 110(3) of the amended Labour Ordinance Sabah now expressly provide that where payment of wages is made in cash it shall be made on working days only and at or near the workplace thus giving full effect to Article 13(1) of the Convention.

Direct Request (CEACR) - adopted 2013, published 103rd ILC session (2014)

Article 4(2) of the Convention. Partial payment of wages in kind. The Committee recalls that section 116(1) of the Labour Ordinance of Sabah (Cap. 67), as amended in 2005, allows for accommodation, food, fuel, light, water, medical attendance or other services, as may have been previously approved by the Director of Labour, to be provided in addition to cash wages. In accordance with section 113(5) of the same Ordinance, however, the Director of Labour may not permit any deduction from wages in terms of accommodation, food and meals unless she/he is satisfied that the provision of these services is for the benefit of the employee. The same provisions are also reproduced in sections 114(5) and 117(1) of the amended Labour Ordinance of Sarawak (Act A1237). In its previous comments, the Committee observed that there might be the need to verify that the in-kind benefits in question are also fairly and reasonably priced and suggested that the Government should consider some legislation action in this respect. In its latest report, the Government indicates that to date there have been no cases in which the Director of Labour considered an application for partial payment of wages in the form of in-kind benefits. The Committee trusts that should any problem arise in the future the Government will contemplate the possibility of reviewing the relevant provisions in accordance with the requirements of Article 4(2)(b) of the Convention.

Article 13(1). Place and time of the payment of wages. In its previous comments, the Committee drew the Government’s attention to the need to take appropriate action to ensure that the requirements of the Convention as regards the time and place of payment of wages are fully met in those sectors where payment by electronic bank transfer is not yet generalized or practicable. The Committee notes with satisfaction that section 111(3) of the amended Labour Ordinance Sarawak and section 110(3) of the amended Labour Ordinance Sabah now expressly provide that where payment of wages is made in cash it shall be made on working days only and at or near the workplace thus giving full effect to Article 13(1) of the Convention.

Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

Repetition

Article 4(2) of the Convention. Partial payment of wages in kind. Further to its previous comments on this point, the Committee notes that section 116 of the Labour Ordinance of Sabah (Cap. 67) now reflects the provisions of section 29 of the Employment Act 1955, and allows for accommodation, food, fuel, light, water, medical attendance, or any other amenity or service, which may have been approved by the competent public authority, to be provided in addition to money wages. While noting the Government’s indication that in practice the payment of wages in kind is freely negotiated and agreed upon between the parties to the employment relationship, and while recalling that according to this Article of the Convention permissible allowances in kind are only those authorized by national laws and regulations, collective agreements or arbitral awards but not individual agreements, the Committee considers that the prior approval of the Director of Labour required under section 116(2) of the Labour Ordinance sufficiently guarantees the protection of workers against possible abuse. However, the Committee is of the view that under section 112(5) of the Labour Ordinance, there might be a need to safeguard not only that the Director of Labour verifies that the provision of proposed allowances in kind is for the benefit of the employee but also that the allowances in question are fairly and reasonably priced (for instance at cost price, market value, or a rate fixed by law). The Committee therefore suggests that the Government should consider the possibility of amending the above provision accordingly. It also requests the Government to provide more concrete information on the conditions under which and the limits within which in-kind payment is authorized by the Director of Labour in practice. Moreover, the Committee understands that the Labour Ordinance, Sarawak (Cap. 76) was amended by Act A1237 of 10 October 2005. The text of the amended Ordinance not being available at the Office, the Committee would appreciate receiving a copy.

Article 13(1). Place and time of the payment of wages. Following up on its previous comment, the Committee notes that the Government makes renewed reference to the increasing use of electronic means for paying workers’ wages. However, the Committee wishes to draw the Government’s attention to the fact that the requirement of the Convention concerning the payment of wages on working days only and at or near the working place refers to the payment of wages “where made in cash” and is therefore completely unrelated to the payment of wages by electronic bank transfer. The Committee therefore reiterates its request for appropriate action to ensure that the requirements of the Convention as regards the time and place of payment are fully met in those branches of economic activity where non-cash methods of payment, such as bank transfer, are not yet generalized or practicable.

Part V of the report form. The Committee notes the statistical data concerning the number of labour inspection visits conducted in Peninsular Malaysia and in Sabah in the period 2004–06. More concretely, as regards the situation of pay arrears in Peninsular Malaysia, the Committee notes that the number of employers ordered to pay arrears in 2006 was 56 times higher than in 2004, with the overall amount of arrears concerning annual leave having increased ten times in the same period and the amount of arrears concerning overtime pay having increased four times. The Committee further notes that even though there have been 20 per cent less inspection visits carried out in 2006 as compared to 2004, the number of employers who were reprimanded upon inspection was eight times higher in 2006 than in 2004. The Committee would appreciate receiving additional explanations concerning the reasons of such sharp increase in the number and scale of violations of the wage protection legislation over the last four years. The Committee would also be grateful if the Government would continue providing up to date information on the practical application of the Convention, including any available statistics regarding the situation in Sarawak.

Direct Request (CEACR) - adopted 2008, published 98th ILC session (2009)

The Committee notes the information provided in the Government’s report, in particular the adoption of the Labour Ordinance of Sabah (Amendment) Act 2005 (Act A1238) of 1 October 2005 which incorporates many of the provisions of the Employment Act 1955.

Article 4(2) of the Convention. Partial payment of wages in kind. Further to its previous comments on this point, the Committee notes with satisfaction that section 116 of the Labour Ordinance of Sabah (Cap. 67) now reflects the provisions of section 29 of the Employment Act 1955, and allows for accommodation, food, fuel, light, water, medical attendance, or any other amenity or service, which may have been approved by the competent public authority, to be provided in addition to money wages. While noting the Government’s indication that in practice the payment of wages in kind is freely negotiated and agreed upon between the parties to the employment relationship, and while recalling that according to this Article of the Convention permissible allowances in kind are only those authorized by national laws and regulations, collective agreements or arbitral awards but not individual agreements, the Committee considers that the prior approval of the Director of Labour required under section 116(2) of the Labour Ordinance sufficiently guarantees the protection of workers against possible abuse. However, the Committee is of the view that under section 112(5) of the Labour Ordinance, there might be a need to safeguard not only that the Director of Labour verifies that the provision of proposed allowances in kind is for the benefit of the employee but also that the allowances in question are fairly and reasonably priced (for instance at cost price, market value, or a rate fixed by law). The Committee therefore suggests that the Government should consider the possibility of amending the above provision accordingly. It also requests the Government to provide more concrete information on the conditions under which and the limits within which in-kind payment is authorized by the Director of Labour in practice.

Moreover, the Committee understands that the Labour Ordinance, Sarawak (Cap. 76) was amended by Act A1237 of 10 October 2005. The text of the amended Ordinance not being available at the Office, the Committee would appreciate receiving a copy.

Article 13(1). Place and time of the payment of wages. Following up on its previous comment, the Committee notes that the Government makes renewed reference to the increasing use of electronic means for paying workers’ wages. However, the Committee wishes to draw the Government’s attention to the fact that the requirement of the Convention concerning the payment of wages on working days only and at or near the working place refers to the payment of wages “where made in cash” and is therefore completely unrelated to the payment of wages by electronic bank transfer. The Committee therefore reiterates its request for appropriate action to ensure that the requirements of the Convention as regards the time and place of payment are fully met in those branches of economic activity where non-cash methods of payment, such as bank transfer, are not yet generalized or practicable.

Part V of the report form. The Committee notes the statistical data concerning the number of labour inspection visits conducted in Peninsular Malaysia and in Sabah in the period 2004–06. More concretely, as regards the situation of pay arrears in Peninsular Malaysia, the Committee notes that the number of employers ordered to pay arrears in 2006 was 56 times higher than in 2004, with the overall amount of arrears concerning annual leave having increased ten times in the same period and the amount of arrears concerning overtime pay having increased four times. The Committee further notes that even though there have been 20 per cent less inspection visits carried out in 2006 as compared to 2004, the number of employers who were reprimanded upon inspection was eight times higher in 2006 than in 2004. The Committee would appreciate receiving additional explanations concerning the reasons of such sharp increase in the number and scale of violations of the wage protection legislation over the last four years. The Committee would also be grateful if the Government would continue providing up to date information on the practical application of the Convention, including any available statistics regarding the situation in Sarawak.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

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 indicated that the practice of granting benefits in kind was not widespread and was generally confined to the plantations sector and wood-processing industries where accommodation, water and electricity were provided free of charge. As to the application of Article 4 in Sabah, the Government reiterated its intention to amend the Labour Ordinance (Cap. 67) to bring it into line with the provisions of the Employment Act 1955 which was enforced in Peninsular Malaysia and indicated that at present the provision of additional remuneration in kind was subject to agreement between the parties to an employment contract. The Government added that whereas the labour inspection services conducted regular inspections to ensure that there were 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 allowed 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 indicated that it was 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 was 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.

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

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.

Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

The Committee notes the Government’s reports.

Article 4(2) of the Convention. Further to its previous direct request, the Committee notes the Government’s reference to section 29 of the Employment Act 1955 which allows for the provision of housing, food, fuel, water, medical attendance or any amenity or service approved by the Director-General of Labour in addition to wages. Recalling that the Government has expressed on numerous occasions its intention to amend the Labour Ordinance, Sarawak (Cap. 76) and the Labour Ordinance, Sabah (Cap. 67) in order to bring them in line with the Employment Act 1955, the Committee again requests the Government to specify how it is ensured in law and practice that the allowances in kind are appropriate for the personal use and benefit of the worker and his/her family and that they are valued fairly and reasonably. The Committee asks the Government to provide information in its next report on any progress achieved in this regard.

Article 13(1). The Committee notes that the Government in its report refers to section 28 of the Employment Act 1955 which lays down an express prohibition against the payment of wages in taverns or similar establishments or in places of amusement or in shops or stores for the retail sale of merchandise in conformity with Article 13(2) of the Convention. However, in the absence of any provision requiring that the payment of wages should be made on working days only and at or near the workplace, as set forth under Article 13(1) of the Convention, the Committee again requests the Government to take the necessary steps to give full effect to the provisions of the Convention in this respect and report on any developments to this end.

Part V of the report form. The Committee notes the information supplied by the Government in its report with respect to the number of inspections conducted by the Labour Department in 1999 and 2000 in all sectors. It requests the Government to continue to supply all available information on the application of the Convention in practice, including, for example, extracts of official reports or statistical information on inspection visits, the number and nature of violations reported and sanctions imposed.

Direct Request (CEACR) - adopted 1995, published 82nd ILC session (1995)

The Committee notes the information supplied by the Government concerning the application of Article 8(2) of the Convention in Sarawak.

As to the application of Article 4 in Sarawak, the Committee notes the Government's reference to sections 111 and 117 of the present Labour Ordinance (Cap. 76, Sarawak). It points out that there is no provision that ensures that the allowances in kind are appropriate for the personal use of the worker and his family. The Committee asks the Government to indicate measures taken or envisaged to ensure this point in accordance with Article 4(2)(a).

The Committee also notes the Government's statement regarding Article 13(1) that it is the normal practice of employers in Sarawak to make the wage payment on working days only and at or near the workplace. It hopes that, on an appropriate occasion, measures will be taken to bring the legislation into conformity with practice.

In the absence of information on the application of the Convention in Sabah, the Committee again requests the Government to indicate measures taken to apply the provisions of Articles 4 and 13(1) in Sabah.

Direct Request (CEACR) - adopted 1992, published 79th ILC session (1992)

Articles 4, 8, paragraph 2, and 13, paragraph 1, of the Convention. With reference to its previous comments, the Committee notes from the Government's report that the intended amendments have not yet been made either to the Labour Ordinance (Chapter 67) Sabah or to the Labour Ordinance (Chapter 76) Sarawak so as to bring them into line with the Employment Act, 1955, but that action is being taken for the amendment of the Labour Ordinance Sarawak, including consultation with the employers' and workers' representatives.

Recalling that such amendments have been expected for many years, the Committee can only reiterate the hope that these amendments will soon be made in order to ensure the application of the above-mentioned Articles of the Convention in these regions and requests the Government to continue supplying information on any progress made.

Direct Request (CEACR) - adopted 1991, published 78th ILC session (1991)

The Committee notes that the Government's report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

Articles 4, 8, paragraph 2, and 13, paragraph 1, of the Convention. Further to its previous comments, the Committee notes from the Government's report that the Government is currently taking positive steps to introduce relevant changes to both the Labour Ordinance (Chapter 67) Sabah and the Labour Ordinance (Chapter 76) Sarawak so as to bring them in line with those provided by the Employment Act, 1955. The Committee hopes that the Government will be able to indicate in its next report, that the necessary measures have been taken to ensure the application of the above-mentioned Articles of the Convention in these regions. The Committee recalls that such measures have been pending for many years.

Direct Request (CEACR) - adopted 1987, published 74th ILC session (1987)

Articles 4, 8, paragraph 2, and 13, paragraph 1, of the Convention. Further to its previous comments, the Committee notes from the Government's report that the Government is currently taking positive steps to introduce relevant changes to both the Labour Ordinance (Chapter 67) Sabah and the Labour Ordinance (Chapter 76) Sarawak so as to bring them in line with those provided by the Employment Act, 1955. The Committee hopes that the Government will be able to indicate in its next report, that the necessary measures have been taken to ensure the application of the above-mentioned Articles of the Convention in these regions. The Committee recalls that such measures have been pending for many years.