‘Give parity for Sabah employers with labour law changes’

KOTA KINABALU (Oct 18): The recent passing of Sabah Labour Ordinance (Amendment) Bill 2024 in the Dewan Negara has been touted to be a major step forward for safeguarding workers’ rights.

Supported by federal and state government representatives, in the words of Human Resources Minister Steven Sim, “it’s a pivotal moment in aligning Sabah’s labour standards with international norms.”

What is forgotten amidst these excitement and high-fiving all round however, is the other side of the equation: aligning Sabah’s business environment with (in the least) Peninsular’s norms, such that Sabah employers can afford to give the same treatment standard to workers as their Peninsular counterparts, according to Sabah Employers Association president Yap Cheen Boon.

“There is a reason why Sabah economy in 2023 is still lagging behind since 2019,” he said.

“With almost 40% lesser employers operating in the marketplace today comparing to six years ago, and 80% of employers hiring less than seven staff on average, many are still sustaining at the micro-SMEs level, unlike Peninsular companies that are much larger in sizes and operational scales. Big or small, total of Sabah’s employers is around 35,000, versus Peninsular’s number of around 600,000.

“This is not because Sabahan employers are comparatively ‘less capable’, or just being ‘less competitive’ by nature. This is because Sabahan businesses are operating in a business environment that is not as conducive as Peninsular Malaysia, in fact much less forgiving and restrictive in growth potential,” he pointed out.

Yap said Sabahan businesses have access to only one means of logistical linkage – shipping, whereas Peninsular businesses have not just a few world-class ports to rely upon, they can also count on workable train system, and admiringly an efficient highway road network system to transport people and goods across distances at much lower costs.

With better logistical linkages, Peninsular business have as well reliable utility supply – electricity and water.

Adding to this a much bigger (and more spending power) consumer base and better skilled workers, it is not a mystery to see why Sabah businesses simply cannot grow to the size and scale of Peninsular counterparts despite the aspirations, he said “In fact, all these public-good deficiencies have in the whole made Sabah’s economic importance and contributions to the nation’s total dropping from 6.4% in 2017 to 2023’s 5.3%.

“Hence today in Sabah only low value service sector dominates, which in a downward spiral see businesses can only afford to pay minimal wages to low skilled workers, exacerbating the situation further. Out of current Sabah’s labour force of two million, only 500,000 approximately have salaried jobs to rely on,” he said.

“Now that the government agencies are congratulating each other on the successful SLO amendment bill being passed, it is imperative to immediately give parity to Sabah businesses the same operating environment as Peninsular Malaysia, such that employers can afford to comply sustainably.

“It does not makes sense to ask Sabah businesses to be patient with improvements to utilities’ supply, port capacity, road network to improve in due course if not later, when they are asked to shoulder the same labour cost pressures without delay. It is unfair for one side of the equation to be courted and feted, with the other side conveniently forgotten if not portrayed as villain,” Yap added.

He also said if Sabah’s labour law has now been federalized hence bypassing the need for state’s consensus, the federal Human Resource Ministry should move engage with Sabah employers for inclusive policy consideration. This is crucial to take into account Sabah’s unique labour aspects without federal-centric views being unilaterally imposed.

“One example is IMM-13 workers in Sabah; they are allowed to work, but not captured in the Sabah Labour Law amendment bill as not many federal human resource lawmakers are aware of their existence.

The incoming Housing Act that has been surreptitiously included in Sabah labour law amendment bill as well has not taken into account Sabah’s land ordinance intricacies across different districts, much less about the hierarchy of authority; will federal agency that is tasked with enforcement override local housing authority in order to bulldoze through the law? Is there a common standard of housing being agreed upon already for Sabah employers to follow without confusion?”

“SEA cannot stress enough that employer and worker co-exist symbiotically; one cannot do without the other. Asking Sabahan employers now to pay the same as Peninsular’s employers has to ensure immediately that Sabah businesses enjoy the same business environment standard as Peninsular’s businesses. Failing which is akin to perversely punishing the weak.

“Without true parity, the situation ahead will be full of hurdles to surmount,” he said.