By Alyaa Alhadjri
KUALA LUMPUR: Eradicating middlemen companies involved in the recruitment of labour would result in a "win-win situation" for both prospective employers and their workers, labour activist Charles Hector said.
Hector told theantdaily that amendments made to the Employment Act 1955 have effectively changed the relationship between workers and their principal employers by recognising the role of outsourcing recruitment agencies as "contractor for labour".
A Cabinet Committee on Foreign Workers in its meeting on July 5, 2005 had, according to a joint statement signed by 90 trade unions and labour associations last year, agreed to the recruitment of foreign workers through outsourcing companies (now known as 'Contractor for Labour' in the amended Act).
Hector said this move effectively recognised such third-party companies to be legal employers for the workers, despite the fact that they are actually working for another principal “employer” in various sectors.
He was commenting on the government's decision to do away with "corruption by proxy" as announced by Minister in the Prime Minister's Department Datuk Paul Low on Sept 23.
"There is nothing wrong with having commission agents who provide a genuine service that adds value to a transaction but middlemen who do not add value to a transaction will only add unnecessary costs to doing business," Low reportedly said.
The joint statement, which was submitted to the government in protest of amendments to the Act, also stated that these outsourcing companies recruited local and migrant workers on fixed-term contracts under terms and conditions usually less favourable than that of workers directly employed by principal companies.
Hector feels that reverting to the original system of direct employment of workers by the principal company will be beneficial to both parties.
"Employers will have direct control on the recruitment of workers who meet the needs of their companies.
"Workers will also have the assurance of knowing who their prospective employers are before leaving for work in another country," said Hector who cited the process of recruiting foreign workers as an example.
He added that such a move will also help to reduce various costs involved in the recruitment process, a larger sum of which is paid to the third-party companies for their services.
Labour lawyer A Sivanesan, meanwhile, said resistance against middlemen companies in the labour recruitment process was centred on the fact that workers are often shortchanged of their rights to benefits offered by the principal company.
This, he said, includes the right to be a member of trade unions and assurance of compensation in the event of any workplace accidents.
"It is not a legal offence [for third-party companies] to charge for services which they can offer," he said, adding that the government must also have policies in place to absorb the impact of changes made as a result of cutting out middlemen from the operational chain.
Sivanesan, who is Sungkai state assemblyman, cited the plight of farmers in his constituency who were initially awarded with a Temporary Occupational Licence (TOL) for their lands.
"They have been farming on the land for the past 50 years before the TOL was reviewed and awarded to a state-controlled body.
"This development body subsequently leased the land to another third party who then went on to negotiate with the farmers who had no choice but to agree with stipulated terms," he said.
Sivanesan pointed out that such cases can be resolved by improving the functions of government agencies involved in developing land for farming and helping the farmers market their produce, instead of relying on a third party.
While the government's decision to cut out "irrelevant" middlemen from the various sectors is laudable, implementation of such a move will require commitment and political will to withstand resistance from parties who may suddenly find their pockets running dry. - The Ant Daily, 29/9/2013, Let bosses hire foreign workers directly