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22 September 2005






On The Implementation 

Of the 

Amended Sarawak Labour Ordinance ( SLO)

22 September 2005

If SLO not FULLY Implemented by 1 October 2005, on 2 October 2005, MTUC will:

· Take protest & Industrial Actions
· Instruct all workers not to work overtime 


· All Employers who are affiliates of MEF, either directly or indirectly through SCCI and SMA, including all Banks.


On 19 September 2005 the Malaysian Employers Federation (MEF) declared that they have no qualms about implementing the new SLO except Schedule 1 of the Act.

Is this true?

We publish below official MEF documents and statements made by MEF & SCCI officials and reported in the press on 19 September 2005 in Kuching. 

Schedule 1 state that non-manual workers whose wages does not exceed RM2500 shall be covered under the new SLO.

Schedule 1 also state that all manual workers shall be covered, irrespective of their wages.

To be covered by the new SLO a worker must fall within the definition of an employee under schedule 1. This is not just for the purposes of overtime but other benefits like maternity, sick leave, annual leave and retrenchment benefits.

Therefore by suspending the 1st schedule, NO WORKER shall be covered even if the new SLO is implemented. VT Nathan, Vice President of MEF is a very senior and highly respected lawyer. Surely he is aware of this.

The only logical conclusion is that MEF does not want the New SLO to be implemented at all. They are using the overtime issue to mask their true intention.

By demanding that the schedule is suspended and introduce new bill to follow the EMPLOYMENT ACT 1955 reinforces our long held views that they are using Sarawakians Workers as pawns to keep the ceiling in the Employment Act at RM1500 for peninsular workers. They are prepared to keep exploiting Sarawakians workers exploited.

They are prepared to continue to deny Sarawakian workers basic Human Rights entitlement of maternity leave, sick leave, annual leave, retrenchment benefit and the right to due inquiry before dismissal.





2 Why the ceiling of RM2500 is more than justified.

The ceiling in the Employment Act (EA) was $1000 in 1984, increased to $1250 five years later in 1989 and another $250 five years later in 1995. It is due for review and the Federal Government has indicated that it will review it soon. 

Since the ceiling has been increased by $250 every five years, and the last review was 10 years ago, it would be reasonable to expect that the new ceiling for the EA will be at least $2000.

Please take cognizance of the fact that the Federal Government, State Government & Government Agencies and Statutory Bodies pays a Regional Allowance ranging between 15 to 25% of the basic salary to ALL government employees (irrespective whether they are transferred from Peninsular or Sarawakians serving in Sarawak, because of the higher cost of living in Sarawak)

For the private sector, employees in the Banking. Telekoms, Petronas & Shell are also paid similar cost of living allowance.

So if the Employment Act ceiling is to be reviewed to at least $2000 then the ceiling in Sarawak should be $2000 X 25% = $2500.

This is more than enough justification that threshold should be higher in Sarawak as the wages is higher to compensate for the higher costs of living.



3 Why MEF claims are simply Incredulous

In the Briefing to more than 100 employers representatives MEF declared: amongst others,
How in the world does Sabah has 386,655 employees earning between RM1500 and RM2500 is beyond comprehension. 

If there are almost 400,000 employees earning between RM1500 & RM2500, there must be at least 2 millions employees in the PRIVATE SECTOR in Sabah (based on MTUC's very reasonable calculation that those earning between 1500 and 2500 will be about 20% of the workforce).

EPF Figures as at 31/12/2004 shows that there are ONLY a total of 220,797 active contributors to the EPF in Sabah and those earning between RM1500-RM2500 cannot be more than 22,273. EPF has also 95% coverage, meaning that 95% of employees are contributing EPF for their employees.

President of MEF En Jafaar Carim is also Chairman of the Internal Audit Committee of the EPF and he signs off EPF accounts and annual report.

So either he is saying that EPF figures are wrong or employers are breaking the law and do not contribute EPF for more than 1 million employees in Sabah. Or is it that MEF plucked their figures from some rambutan trees at Tanjong.

Profile of EPF contributors - Salary Range

For Sarawak, MEF claims that the higher ceiling of RM2500 instead of RM1500 will cost employers an additional RM330, 371.532.00 a year. 

However, SCCI has admitted that they have not done any study and DO NOT KNOW THE COST IMPLICATIONS. It is in their Imagination!! Quote "he imagine it would be in the millions of ringgit".

Also MEF made wild assumption that every employee will work 2 hours overtime everyday - including rest days and public holidays. This would mean that every worker would have to work at least 60 extra hours a month, 720 hours a year without being paid a single sen. 720 hours is 30 complete days!
If at all true, it only goes to show employers have been exploiting workers by making them work excess hours without paying them. And they want the Chief Minister to allow them to continue to exploit workers.

Be that as it may be, 2 hours overtime a day would equate to 14 hours a week, = 35 percent of total works hours a week.

By claiming that the total cost is RM330,000,000 a year = RM27.5 million a month = 77% of total salaries of RM35,045.000 (EPF Figures). In Sabah, MEF showed that the ratio will be is 90.4%.

Since when does any employer has an overtime cost that is almost the same as the salary cost for executive employees????????

Perhaps Inland Revenue should audit these employers on these figures and assessed back tax, if any.

And MEF have the cheek to accuse that the Ministry of Human Resources Survey is not portraying the true picture. The MOHR survey indicates that the cost implications are reasonable and manageable.


MEF does not even respect and trust their own executives and accusing that they will be encouraged to delay their work just to claim overtime and become clock watchers.

MEF is saying that Sarawakians executives who are Masters Degree holders & Doctorates are lazy and clock watchers and will delay their work just to claim overtime.

It appears to us that MEF has a siege mentality and does not even trust their own highly qualified executives!!!!! 

And if they cannot even trust their own executives, CAN YOU TRUST MEF ANY MORE??

How about Sarawak Chamber of Commerce and Industry (SCCI)?

All participants to the gathering on 19 September 2005 were given copies of a standard letter addressed to the Chief Minister. Yet SCCI denied this.
5  Doctorate only earns 11 Ringgit extra.

In another joke, MEF claims that the salaries of Doctorate holders are only RM11 higher than Master's Degree Holders. No wonder the country is facing a serious problem of brain drain.

MEF also claimed that the Average Minimum Basic Salary for Executives for a basic Degree is RM1666 throughout their whole working lives. Otherwise why the heck do they claim that all executives will fall within the RM2500 limit???

Any person with primary education would realize that MEF figures are those for starting salaries and would increase over time and would fall out of SLO coverage once they cross the RM2500 limit.

Who are they trying to fool?

AS AN ORGANISATION REPRESENTING EMPLOYERS, we would expect it to be transparent and professional. They have stooped down to such a low.

Remember how George Bush tried to convince the United Nations to invade Iraq? Where are the Weapons of Mass Destructions?

We now appear to be hearing Words of Mass Deception?



The Chief Minister of Sarawak on 21 September 2005 has declared that the State Government has no objection to the RM2500 limit. He is only concerned that the ceiling should be standardized nationwide. We agree.

MEF claims that it wants standardization.
So we call on MEF as well as Employers in Sarawak to do the decent thing and demand the Federal Government review the EA ceiling to RM2500 immediately.

Due to the urgency in preparing this document , we acknowledge that there may be typo errors. Please check with MTUC at 019-8860819 if in doubt

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