Observation (CEACR) - adopted 2015, published 105th ILC session (2016)

Equality of Treatment (Accident Compensation) Convention, 1925 (No. 19) - Malaysia - Peninsular (Ratification: 1957)

Article 1(1) of the Convention. Equal treatment of foreign workers. The Committee recalls that, since 1 April 1993, the national legislation transferred foreign workers, employed in Malaysia for up to five years, from the Employees’ Social Security Scheme (ESS), which provided for periodical payments to victims of industrial accidents, to the Workmen’s Compensation Scheme (WCS), which guaranteed only a lump-sum payment of a significantly lower amount. On several occasions, the resulting unequal treatment of foreign workers in Malaysia has been discussed by the Conference Committee on the Application of Standards. In June 2011, the Conference Committee urged the Government to take immediate steps in order to bring national law and practice into conformity with Article 1 of the Convention, to respect the system of automatic reciprocity instituted by the Convention between the ratifying countries, and to avail itself of the technical assistance of the ILO to resolve administrative difficulties by concluding special arrangements with the labour-supplying countries under Articles 1(2) and 4 of the Convention. In 2011, the Government indicated that a technical committee within the Ministry of Human Resources including all stakeholders was considering the following three options: (i) extension of ESS coverage to foreign workers; (ii) creation of a special scheme for foreign workers under the ESS; and (iii) raising the level of the benefit provided by the WCS so as to be equivalent to that of the ESS benefit. An actuarial study on the three options under consideration was carried out with a view to determining the most suitable option in consultation with the stakeholders involved. In its latest report, the Government informs that it intends to extend the coverage of the ESS scheme to documented foreign workers subject to certain modifications concerning the employment injury benefits to ensure the administrative practicability of the new arrangements. The Government proposes to hold a technical session with the ILO to evaluate the conformity of the modified scheme with Article 1 of the Convention.

The Committee notes with interest the Government’s intention to transfer foreign workers, employed in Malaysia for up to five years, back under the ESS scheme, which is applicable to Malaysian citizens and foreign workers employed in Malaysia for a longer period. The Committee hopes that the technical consultation with the ILO will be organized in the very near future so as to enable the Government to proceed with the modification of the ESS scheme in line with the principle of equality of treatment of foreign workers and asks the Government to report on progress made in its next report due in 2016.