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

Individual Case (CAS) - Discussion: 2018, Publication: 107th ILC session (2018)



Malaysia – Peninsular Malaysia and Sarawak

A Government representative indicated that the Government had noted the concerns raised by the Committee in 2017 as well as its conclusions calling for the re-establishment of equality of treatment through the extension of the coverage of the Employees’ Social Security Scheme (ESS) to foreign workers. The Government had in fact agreed to extend the protection of the ESS, which would come under the Social Security Organization (SOCSO), to foreign workers and had taken serious measures over the past year to that effect. However, that process needed to be done in a just and fair manner and at a pace that was comfortable to both employers and workers, as well as the insurance panels, the system provider and the SOCSO. A period to ensure the smooth transition of foreign workers to the ESS was needed to allow for the establishment of implementation mechanisms, databases and roadmaps, and the organization of engagement sessions with stakeholders and the social partners to accommodate the change. Over the past year, the Government had taken several steps to strengthen and enhance the existing Workmen’s Compensation Scheme (WCS) with the objective of phasing it out during a transition period of a maximum of three years. This transition period was needed in view of three main factors. First, the SOCSO had only recently been made responsible for the implementation of the Employment Insurance System and needed a certain time for the funds to be sustainable and the administrative matters related to the Employment Insurance System to operate smoothly. In addition, the existing Social Security Act would need to be amended. Secondly, there existed contractual obligations with the insurance panels and the system provider of the e-compensation scheme. Lastly, employers needed to be provided with ample time to adjust to the changes that would occur when the WCS shifted to the ESS. In light of the recent changes that had occurred in the Government, the transition plan would be submitted to the new administration for consideration and approval. The Government was ready to take immediate action, which included further deliberations and engagement with the social partners. No foreign worker should be left without coverage for both employment and non-employment injuries. It was the responsibility of states to protect the rights of foreign workers and prevent all forms of discrimination. But it should be noted that access to medical care had always been made available to all workers, regardless of their status. The Government fully supported the principles of equality of treatment and was committed to complying with the request of the Committee to ensure that foreign workers had access to accident compensation. The Government had already sought ILO technical expertise and was ready to forge closer collaboration with the guidance and approval of the new administration. Discussions would be held and technical assistance be sought from the Office on the matter under discussion with a view to developing appropriate mechanisms to overcome any issues that might arise.

The Worker members stated that, for over two decades, the ILO supervisory mechanisms had been addressing the persistent issue of equal treatment of migrant workers, in particular with respect to employment injury. Since 1993, the Committee of Experts had addressed the transfer of foreign workers, employed in Malaysia for up to five years from the ESS, which provided for periodical payments to victims of industrial accidents, to the WCS, which guaranteed only a lump sum payment of a significantly lower amount. Lowering the protection afforded to migrant workers was a clear breach of Article 1 of the Convention, which required ratifying States to grant to migrant workers who suffered injury due to industrial accidents which occurred in its territory, or to their dependents, the same treatment in respect of workmen’s compensation as it granted to its own nationals. The Committee had discussed the case on multiple occasions, requesting the extension of the coverage of the ESS to migrant workers and the development, in consultation with the social partners, of laws and regulations that would ensure the removal of discriminatory practices between migrant and national workers. It had also noted with deep regret that the Government had taken no measures to implement the conclusions of the Committee, nor had it responded to the Committee of Expert’s express request to provide a detailed report on the application of the Convention. For many years, millions of migrant workers had been affected by this discriminatory treatment, despite filling substantial shortages in the supply of low-skilled labour for key economic sectors. It was estimated that around 20–30 per cent of the country’s workforce was constituted of migrant workers coming from a number of different countries, such as Cambodia, Indonesia, Lao People’s Democratic Republic, Myanmar, Philippines, Thailand and Viet Nam. In addition to the 2 million legally registered migrant workers, there were also several million undocumented migrant workers. It was estimated that between 1 and 4 million undocumented migrant workers who were engaged in the most hazardous jobs were not eligible for any compensation. Approximately one third of the workers in the agricultural, manufacturing and construction sectors were migrant workers, with migrant workers making up to 70 per cent of workers in the agricultural sector. Although those industries had contributed 297 billion ringgits (€63 billion) or 35.7 per cent of Malaysia’s gross domestic product in 2014, the rate of occupational accidents was extremely high. According to official data, between January and October 2017, the Department of Occupational Safety and Health had recorded 1,645 workplace accidents causing permanent or temporary disability and 46 fatal accidents in the manufacturing sector alone. In the same period, the construction industry and the agricultural sector had claimed the lives of 63 and 18 workers, respectively. Given that official statistics only took into account investigated accidents, it was estimated that the real number of workplace accidents was even higher. Despite those appalling numbers and the enormous contribution of migrant labour to the economic growth and development of Malaysia over the years, the Government continued to deny equal and fair treatment to migrant workers. While under the ESS, a permanently injured worker was entitled to a periodical cash benefit of 90 per cent of his/her “assumed average daily wage” (section 22b and the fourth Schedule of the Social Security Act), permanently injured migrant workers in the same situation would only be entitled to a lump sum payment of 62 months’ salary or 23,000 ringgits (around €4,900) under section 8 of the Workmen’s Compensation Act (WCA). The payment of a lump sum instead of periodic payments in itself amounted to a differentiation in the quality of the protection provided, as existing global evidence demonstrated. Furthermore, the level of the lump sum payment provided to migrant workers was a mere fraction of the amount to which Malaysian workers were entitled in the exact same situation. An actuarial simulation undertaken by the ILO, estimated that a national worker was entitled to a total of 425,000 ringgits, with periodic payments calculated as a lump sum. According to that simulation, migrant workers were entitled to about 23,000 ringgits which meant that they were only entitled to 5.4 per cent of the benefits received by Malaysian workers. Such a level of discrimination between workers in the twenty-first century was shocking and appalling to say the very least.

With regard to medical care, Malaysian workers were entitled to the free treatment of injuries at any public hospital or clinic, with the medical bill being settled by the ESS fund. Under the WCS, medical expenses for work injuries were borne by the employer, which exposed migrant workers to possible abuses, as employers might refuse to pay for the necessary treatment. In addition, migrant workers could only claim refunds for medical costs after they had fully recovered, and even then it usually took several months for them to be refunded, leaving them with no means of survival in the meantime. Undocumented migrant workers ran the risk of being arrested while attempting to access medical treatment. Furthermore, a national worker who sustained a workplace injury causing a temporary inability to work for at least four days was entitled to temporary disability benefits equivalent to 80 per cent of his or her wage. Migrant workers temporarily incapacitated due to workplace injury were only entitled to half-monthly payments equivalent to one third of their monthly wage. It should be noted that migrant workers were subject to other forms of unequal treatment. As the Committee had noted in its 2016 examination of the application in the country of the Right to Organize and Collective Bargaining Convention, 1949 (No. 98), migrant workers still faced a number of practical obstacles to collective bargaining, in particular due to insecure employment contracts and vulnerability due to anti-union discrimination. In addition, the estimated 300,000 to 400,000 migrant domestic workers employed in Malaysia were still denied basic labour protection under national laws, and suffered from abusive working conditions, including cases of forced labour. The Government had taken severe measures with regard to undocumented migrant workers. In July 2017, the Malaysian authorities had arrested over 3,300 undocumented migrant workers who had failed to register for an E-card. Due to their fear of detention and deportation, many migrant workers had gone into hiding, which severely limited their access to social protection. The Worker members expressed their deep concern at the situation of migrant workers, who constituted a significant part of the working population of the country. Despite numerous discussions in the Committee, the technical advice provided by the ILO and the Government’s statements that it would take the measures, they had not materialized so far. They urged the Government, with the greatest insistence, to bring its legislation and social security institutions into conformity with the Convention and to ensure equal treatment between migrant and national workers with respect to occupational injuries in an effective and expeditious manner. As a party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Malaysia was required to undertake legislative reforms to eliminate all discriminatory provisions. The new Government had renewed Malaysia’s commitment to undertaking such necessary reforms. They expected that the Government would fully honour its commitments by taking swift and concrete action to eliminate all forms of discrimination against migrant workers.

The Employer members recalled the numerous observations that had been made by the Committee of Experts over a number of years. In addition to the technical issues raised by the Worker members, it was important to consider the context of the situation. The examination of the case concerned Malaysia and Malaysia – Peninsular, that is, Peninsular Malaysia and East Malaysia. Malaysia was a federal state. It was made up of 13 federal states and three federal territories, divided between two regions. Governance of the state was divided between the federal and state governments, while the federal government exercised direct administration over the federal territories. Of particular note was the fact that the states of East Malaysia (Sabah and Sarawak) had separate immigration policies and controls, and a unique residency status. Visas were required for travel between those two states or between either state and Peninsular Malaysia, which created a number of issues, including in terms of the administration of the schemes at the national level. The situation giving rise to the discussion of the case had begun in 1993, when foreign workers had been transferred from the ESS, which provided for periodical payments to victims of industrial accidents, to the WSC, which guaranteed only a lump sum payment of compensation for industrial accidents. Over the years, the supervisory bodies had expressed concern at the differences in those schemes, indicated by the Worker members. The Government’s intention to carry out reforms and to align or realign the provisions applicable to foreign workers with the scheme for national workers should be welcomed. However, they also noted that as far back as 2011, the Government had indicated that a technical committee the Ministry of Human Resources, including all stakeholders, had considered the three following options: (1) the extension of the ESS to cover foreign workers; (2) the creation of a special scheme for foreign workers under the ESS; and (3) raising the level of benefits provided by the WSC to an equivalent level to those provided by the ESS. That was not the first time that the Government had provided similar information, and concrete action was not expected. It should be noted that the Government had expressed its willingness and commitment to address the situation before the present Committee.

They were aware that making those changes was easier said than done, considering a number of existing challenges. Under the ESS, workers were required to contribute for a minimum of 24 months before they or their family could receive any benefits, in the event of industrial accidents or occupational diseases. Foreign workers had often not been in the country long enough to have access to those benefits, while under the WSC, they were covered immediately in case of injury. While there were differences in the monetary compensation, as indicated by the Worker members, other elements also needed to be taken into account. Since foreign workers were generally contracted for fewer than 24 months, it had become evident that the ESS scheme was not suitable for them, at least not in its current form. Taking into account the large number of migrant workers concerned and their statistically high accident rate, achieving the objective of equity required the reconciliation of three main factors: first, the administrative and practical difficulties that impeded equal treatment of migrant workers, including that migrant workers were typically in Malaysia for project-type work, usually fewer than 24 months. Also, if they were incapacitated in industrial accidents, they were often repatriated making compensation an administrative challenge. Second, there was the question of whether or not the Convention required absolute equality of treatment. The actual requirement of the Convention was that workers had to receive the same treatment, which was often not possible for practical reasons. That raised the question of a broader interpretation, for example whether treatment of equal value was as acceptable as exactly the same treatment. Third, irrespective of the interpretation chosen, and given that the ESS scheme was difficult to apply to workers who were not in the country for the minimum qualifying period, it was essential to determine the actuarial equivalence of the lump sum paid under the WCS to migrant workers to the value of the periodic payments. The comparison between the value of the periodical benefits and that of a lump sum benefit was a particularly delicate and technical question. Depending on the answer, it was possible for the WCS to be viewed as a valid way of managing employment injury and invalidity benefits for foreign workers in Malaysia. This could require the adjustment of the payment. But the quantum of compensation was not the only consideration as coverage was also important. The ESS scheme applied only to workplace accidents (including commuting) that resulted in at least four days of sick leave, whereas no such restrictions applied to the WCS. With respect to coverage, the WCS was arguably more favourable to foreign workers than the ESS was to nationals. A number of other member States with federal or state jurisdictions faced similar challenges. That was the reason why a number of such States did not ratify Conventions unless their federal laws required compliance by States. However, since it was arguably outside the mandate of the Committee to request that member States to change their constitutions, it should be recognized that a solution to the issue was unlikely to involve the application of the domestic scheme directly to migrant workers. Instead, a hybrid solution should be sought to achieve a sustainable outcome, taking into account the practical challenges. In conclusion, the Committee should acknowledge the Government’s commitment to making progress on the issue, as well as its commitment to the value of equivalence. The Government should, as soon as possible, provide plans and processes on how it intended to achieve progress.

The Worker member of Malaysia said that Malaysia was a major destination country for migrant workers in Asia. There were about 2 million migrant workers with regular immigration status, while it was estimated that there were about 4 million migrant workers in an irregular situation, with an accurate number for the latter still being unavailable. The Committee had examined the case for the first time in 1996 after the downgrading of migrant workers from the ESS to the WCS in 1993. The compensation for workplace accidents involving migrant workers had continued to remain blatantly unequal. For example, national workers under the ESS were entitled to two forms of payment: temporary disablement and invalidity payment. They were also entitled to other additional benefits such as medical benefits, constant attendance allowance, vocational rehabilitation, dependants’ funeral and education benefits. On the other hand, migrant workers were entitled to a one-off payment under an insurance scheme that had to be purchased by employers, on the condition that the employers had purchased it. The insurance benefit entitlements provided constituted about US$2,500 to $6,281 for accidental death or permanent disability sustained during working hours. Migrant workers could also claim meagre sums for medical treatment and approximately US$1,206 could be claimed for repatriation and funeral expenses. If migrant workers were injured outside working hours, they had to sustain a permanent disability to benefit from an insurance which was supposed to cover loss of pay, compensation, treatment costs and reparation. Migrant workers in Malaysia were largely employed in dangerous jobs without sufficient protective equipment or training, and they also lived in very poor conditions. A high incidence of workplace accidents and commuting accidents had been documented, with the largest number of occupational injuries and deaths occurring in the manufacturing, construction and agricultural sectors, all of which were major sectors of employment for migrant workers. In 2018, the death of three migrant workers had caught the attention of the media. The 28-year-old Adelina had died in February 2018 at Taman Kota Permai Bukit Mertajam as a result of abuse. A post-mortem report found that she had died of organ failures, and the police had not ruled out the possibility that, in addition to being beaten and slapped, the maid’s health had also been neglected, including by not giving her proper food and shelter for several months. The family had been paid an amount equivalent to three years’ wages that had not been paid and compensation for the family, which had included the costs of repatriation and the funeral. In another case, an Indian migrant worker, Mr Lathif, a 22-year-old documented worker in Malaysia since January 2018, had been pinned under an overturned tractor while working in an oil palm plantation. He had died in May 2018 as a result of his serious injuries. The meagre compensation sum had yet to be paid to the family. Moreover, Haironnissa, an Indonesian migrant worker, had died of a high fever while in service. The panel clinic doctor had refused to refer her to hospital for further treatment. Her supervisor and production officer had failed to assist her, and she had died after her parents had taken her back to Indonesia. Action was still pending to investigate the company. Since January 2018, the Malaysian Trades Union Congress (MTUC) had been informed of 42 cases concerning occupational accidents of migrant workers. A total of 60 per cent of those workers had suffered salary deductions, inadequate access to medical treatment and were unable to work. No steps had been taken to implement the objectives of the Eleventh Malaysia Plan (2016–20), namely: (1) developing and implementing a comprehensive immigration and employment policy for migrant workers; (2) engaging with the tripartite constituents; and (3) providing the Committee with the detailed reports requested in 2011 and 2017. This was the fifth time since 1996 that the Committee had examined the Government’s failure to comply with the Convention. While the issue remained unresolved, the life, safety and security of migrant workers continued to be at stake. After 60 years, the Government had been replaced. The new Government should undo the wrong that had been done and reinstate equality of treatment of migrant workers in conformity with the Convention in accordance with the recommendation of the Committee of Experts without any further delay.

The Employer member of Malaysia noted that foreign workers in Malaysia were currently insured under the WCS, established by the WCA. The scheme had been working well, as foreign workers were provided many benefits, including: a lump sum payment for injuries or death; payments for injuries sustained during work; and payment for repatriating the deceased body to the country of origin in the event of death. The Labour Department was empowered to assess speedily claims for workmen’s compensation, receive payments from the respective insurance company and disburse workmen’s compensations to the dependants of deceased workers. Finally, the insurance premium under the WCS, ranging from 68 to 72 ringgits per employee per year, was fully paid by employers. More concretely, the types of benefits and compensation under the WCS were the following: (1) in the case of temporary disablement: half-monthly payments of up to 165 ringgits for up to of five years; (2) in the event of permanent total disablement: payments in the amount of wages for 60 months or 23,000 ringitts (whichever amount was inferior); if in need of constant personal assistance, an additional 25 per cent would be added to the compensation; (3) in the event of permanent partial disablement: a percentage of 23,000 ringgits depending on the degree of physical impairment or loss of earning capacity; (4) in the case of death during work or commuting: payments of the amount of wages for 60 months or 18,000 ringgits (whichever was inferior); (5) in the case of death or permanent total disablement: 23,000 ringgits; and (6) repatriation expenses for death or permanent total disablement: 4,800 ringgits. Taking into account those benefits and the accident coverage, it was ironic that the Committee had insisted on multiple occasions that foreign workers should be placed under SOCSO coverage, without examining whether that was really beneficial for foreign workers. For example, under the Employment Injury Scheme, coverage was limited to workplace employment injury, which included commuting injury, which had to fulfill the criteria that the sick leave arising out of employment injury was at least four days of unavailability for work, as compared to the WCS which provided for 24-hour coverage. In view of the above, while the examination by the Committee was based on the technical issues of equality of treatment, there was no realization that placing foreign workers under the SOCSO would be to their detriment. The insistence of the Committee to examine the present case would eventually result in foreign workers being covered by the Employment Injury Scheme which was only applicable for workplace employment injury, instead of the WCS, which provided 24-hour coverage with a list of benefits as indicated above which were superior and more beneficial than the benefits under the SOCSO Employment Injury Scheme.

The Government member of Bulgaria, speaking on behalf of the European Union (EU) and its Member States as well as Montenegro, Bosnia and Herzegovina, and the European Free Trade Association (EFTA) countries, Norway and the Member of the European Economic Area) said that the EU–Malaysia Partnership and Cooperation Agreement concluded two years ago had further strengthened its bilateral cooperation with the EU and had encompassed a wide range of areas, including human rights and sectoral cooperation on labour and employment. Nevertheless, it was deeply regrettable that the case had already been discussed the previous year by the Committee and that the discriminatory treatment of foreign workers was a long-standing issue that had persisted since 1993, despite recurrent calls by the Committee to putting an end to the practice. Since the detailed report, as requested by the Committee, had not been provided by the Government, she was bound to reiterate the same comments as the previous year. Migrant workers provided much needed skills and made an invaluable contribution to the social and economic development of Malaysia and often filled jobs that were considered undesirable by nationals. Yet their contribution was often not fully recognized, and they remained vulnerable to precarious conditions, abusive practices and unequal treatment, which contributed, among other issues, to an increased risk of accidents and health problems. She therefore urged the Government to take prompt measures to extend the social security scheme for national workers to foreign workers in order to bring an end to that discriminatory practice and ensure equal treatment of foreign workers, particularly with regard to accident compensation. In conclusion, she reiterated the commitment of the EU to a constructive engagement and partnership with Malaysia.

The Government member of Thailand, speaking on behalf of the member States of the Association of Southeast Asian Nations (ASEAN), welcomed the progress made by the Government and its willingness to extend the social security scheme to foreign workers, as well as the measures adopted. The Government should be encouraged to continue its efforts to realize its commitment with respect to the Convention, in particular to ensure equal treatment of foreign workers with regard to accident compensation. The Committee should consider the efforts made by the Government.

The Worker member of the United States recalled that there were two distinct workers’ compensation systems in Malaysia: one for Malaysians, the other for registered migrant workers. Unregistered migrant workers were not covered by any kind of accident compensation, even though they outnumbered registered migrant workers by an estimated two to one. To be cynical, there were actually three schemes in Malaysia: the ESS, WCS and nothing at all. There was no accountability for employers in relation to purchasing the workers’ compensation insurance. If an employer purchased no insurance, inadequate insurance or insurance with exclusions (for example, for injuries that occurred without the proper safety equipment), it was only the injured worker that suffered. Moreover, the registration of migrant workers was tied to specific employers. If a worker was injured performing work for another employer, not only was the worker no longer covered by the WCS, but he faced the risk of being arrested when seeking medical attention and of being deported. The WCS set a maximum limit for lump sum payments, which were abused by employers. For example, a Nepali construction worker had a workplace accident that had resulted in the loss of four fingers. The medical costs had been more than the 25,000 ringgits provided by the insurance policy. His employer had not only used the entire lump sum payment to pay for the medical expenses but was now charging the worker for the expenses, in excess of the policy. The worker was, in fact, paying for the injury, rather than being compensated for it. Sadly, under the WCS, that was a “best case” scenario, as that worker’s employer had purchased an insurance policy for the maximum amount. In the absence of labour inspections, there was no way of holding employers accountable for compliance with the minimum guarantees under the WCA, which was already in violation of the Convention, and did not cover two-thirds of the migrant workforce in the country. There was also no way for workers to lodge complaints for inadequate insurance, and particularly no way for them to do so without fear of retaliation. Not only was the existence of two accident compensation schemes for national and migrant workers plainly discriminatory and in violation of the Convention, but it was also exploitative of migrant workers. The WCA was a legal means of refusing to take care of workers injured at work, and offered a convenient means of avoiding obligations once the lump sum was paid. It was that kind of exploitation that the Convention sought to eliminate.

The Worker member of Singapore noted that, although the laws did not explicitly discriminate against migrant workers, in practice the rights of migrant workers were not fully protected due to the inaction of the Government. There were several examples. First, according to the Employee Provident Fund Act, 1991 (Act No. 452), contributions to the Employee Provident Fund were mandatory, but were voluntary for migrant workers. Moreover, migrant workers could withdraw savings only in the even of death, mental or physical incapacitation, or their return to their country of origin. Secondly, pursuant to the Trade Union Act, 1959 (No. 262), Malaysian workers could organize and form trade unions, while migrant workers only had this right if their employers had no objection. However, the Ministry of Home Affairs had set an absolute prohibition on migrant workers from joining any sort of association. Thirdly, under the Employment Act, 1955, every worker had to have a contract of employment clearly naming the employer. However, migrant workers were faced with the absence of employment contracts or contracts with less favourable conditions than those agreed before departure from their country of origin. Some employers did not renew the permit of workers, resulting in migrants losing their legal status. Migrant workers were also faced with issues regarding the right to collective bargaining, the non-payment of wages, unfair dismissal and the lack of protective workplace equipment. He referred to a pending complaint to a regional Labour Department concerning a Nepali worker who had been injured, who had not received any wages during his period of medical leave, and who had had to pay his medical expenses. Without paying 3,000 ringgits to the placement agency, he would not be able to return to his country of origin. As a result of an investigation by the Regional Labour Department, various labour law violations had been determined. Discriminatory practices such as those described above were occurring to migrant workers on a daily basis. Considering that the issue relating to the Convention had persisted for over 20 years, he called on the Government to restore migrant workers under the SOCSO and to ensure equal treatment and protection of migrant workers.

The Worker member of Australia said that the significantly inferior compensation rights of migrant workers were a direct breach of the Convention and remained of serious concern. According to estimates, between 4 and 6 million migrant workers were working in Malaysia. A large percentage of them were engaged by outsourcing or recruitment agencies, with more than 2,000 agencies in Malaysia alone. Legislative changes had made migrant workers employees of those agencies rather than of the employers for whom they provided labour, with those agencies organizing the legal documents. Although illegal, many migrant workers faced debt bondage situations. The withholding of passports was common and human trafficking occurred on an increasing scale. An Amnesty International report in 2010 had found that migrant workers were highly depended on the agents because, if they left or were dismissed by the agency their status changed to being illegal. Referring to the example of a Nepalese migrant worker employed by a recruitment agency, who did not know the name of his employer, which made it difficult to claim accident compensation, she emphasized that the current system meant that it was difficult to obtain a clear picture of the incidence of injury among migrant workers. Outsourcing also further limited the capacity of the labour inspectorate, which already made very few labour inspections. Despite past offers of ILO technical assistance, the breaches of the Convention had persisted.

The Worker member of Indonesia, speaking on behalf of the Indonesian Workers Welfare Union (IWWU), the Cambodian Labour Confederation (CLC), the Confederation of Trade Unions of Myanmar (CTUM), the Federation of Korean Trade Unions (FKTU), the Korean Confederation of Trade Unions (KCTU), the Federation of Free Workers (FFW) and the Center of United and Progressive Workers (SENTRO) if the Philippines emphasized that, despite the vital role played by migrant workers in the development of the South-East Asian region, they were often subject to abuse. Malaysia had benefited greatly from the employment of migrant workers in several economically important sectors, such as manufacturing, construction and plantations. However, the situation regarding migrant workers, particularly with respect to employment injury compensation, was not in accordance with the Convention and it was necessary to take bold action. The high incidence of workplace accidents and deaths among foreign workers in Malaysia was of serious concern. At a current side event during the present session of the International Labour Conference, the interregional trade union organizations (Asia and the Pacific, Africa, America, Arab States, South-East Asia and South Asian) had signed a memorandum of understanding (MOU) to join and coordinate efforts with a view to better promoting the protection of migrant workers across the region. During the signing ceremony of that MOU, the Director-General had expressed ILO commitment to support the initiative. The Government should demonstrate a similar commitment to ensure that the issues of migrant workers were addressed effectively.

The Government representative said that all the comments made during the discussion would be taken seriously as they would help the Government to improve the situation in the country. Support was being sought from the Employer and Worker members of the country and particularly the latter, to act as a catalyst in realizing the transfer of the protection of foreign workers by the ESS. Managing the welfare of foreign workers had always been a priority for the Government, as set out in the Eleventh Malaysia Plan (2016–20). The Government was committed to this priority, despite the recent change of administration, and would ensure that the quality of protection for all workers in the country was in accordance with international labour standards, and particularly those Conventions that had been ratified by the country. The Government had agreed to expand the coverage of the ESS to foreign workers, which would be done in a progressive and cautious manner. He concluded by assuring the full and undivided commitment of the Government to make efforts to ensure that Malaysia abided by the principles of the Convention.

The Employer members said that the main issues raised in the discussion related to the different benefits to which foreign and national workers were entitled, and the practical challenges relating to the reintroduction of equal treatment for foreign and national workers. The discussion had shown the many instances and scenarios that could occur with regard to documented and undocumented foreign workers. The Government needed to address those challenges, in cooperation with the social partners. It also needed to give genuine consideration to how to deal with the individual situations of foreign workers who had been injured, who were in a desperate situation, and who were denied access to social security benefits. Such situations also occurred in many other countries, and not only Malaysia, but the individuals concerned needed consideration. The issues surrounding the case had been raised many times by the ILO supervisory bodies, and the Committee would have to be realistic in recognizing that changes would not be immediate. While the commitment of the Government had been heard before, the new Government had given a firm undertaking to achieve progress. Between the obligations out of the commitments under the CPTPP and the Convention, the only way for the Government was to go forward.

The Worker members emphasized that the Committee had abundantly discussed the long-standing and persistent issue at previous sessions, including last year, and had consistently urged the Government to bring its legislation into conformity with the provisions of the Convention. They welcomed the answers provided by the Government, which had been conveyed in a positive and constructive manner. However, despite benefiting from ILO technical assistance on the subject in 2016, the Government had taken no concrete steps to address the situation and ensure equal treatment for migrant workers and national workers with respect to workplace injury compensation. The required measures to remedy the situation were quite simple and involved the re-introduction of all migrant workers in the ESS, so as to guarantee equal treatment between migrant workers and national workers in relation to accident compensation. Their reintegration under the ESS would be in accordance with the principles of the Convention, and it had been recommended by the ILO technical team in 2016 as the most effective solution. Recalling that urgent action was required on the issue, they called on the Government to show its commitment to giving full effect to the Convention by taking immediate and effective measures to meet the requirement of the Convention for equal treatment of migrant workers and national workers with respect to workplace accident compensation. In view of the persistence of the situation, while welcoming the positive approach, the Worker members urged the Government to accept a direct contacts mission to assess progress before the next International Labour Conference. They thanked the Government for the response and hoped that the situation would evolve positively in the coming years.

Conclusions

The Committee took note of the oral statements made by the Government representative and the discussion that followed.

The Committee welcomed the Government’s stated commitment to ensuring the Convention’s requirement for equal treatment of migrant workers and national workers.

Taking into account the Government’s submissions, the discussion of the case that followed, and the 2017 conclusions of the Committee, the Committee urged the Government to:

- take steps to develop and communicate its policy for governing the recruitment and treatment of migrant workers;

- take immediate steps to conclude its work on the means for reinstating the equality of treatment of migrant workers, in particular by extending the coverage of the Employees’ Social Security Scheme to migrant workers in a form that is effective;

- engage in genuine consultations with employers’ and workers’ organizations to develop laws and regulations that ensure the removal of discriminatory practices between migrant and national workers, in particular in relation to workplace injury;

- adopt special arrangements with other ratifying member States to overcome the administrative difficulties of monitoring the payment of compensation abroad; and

- take necessary legal and practical measures to ensure that migrant workers have access to medical care in the case of workplace injury.

The Committee called upon the Government to accept an ILO direct contacts mission with a view to implementing these recommendations and to develop mechanisms for overcoming the practical issues affecting the implementation of the domestic social security scheme to migrant workers.

Individual Case (CAS) - Discussion: 2017, Publication: 106th ILC session (2017)



A Government representative recalled that, currently, foreign workers were covered under the Workers’ Compensation Scheme (WCS) regulated by the Workmen’s Compensation Act (WCA) of 1952. The WCS was aimed at providing compensation for work injuries involving temporary disability, total and permanent disability, as well as occupational diseases to foreign workers during working hours. In the event of death, the compensation would be extended to the dependants. A constant attendance allowance was also payable to insured foreign workers who had succumbed to total and permanent disability. Further, ex-gratia payment for fatal accidents was also provided under the WCS during working and outside of working hours. The reason of introducing such ex-gratia payment was to provide additional monetary benefits to foreign workers as well as to their dependants. Over the years, Malaysia had taken proactive efforts to strengthen WCS. In this regard, few internal studies and a series of discussions with relevant agencies had been carried out in order to enhance the benefits provided under the WCS. This was time-consuming as it involved extensive deliberations on national laws, present policies and the economic situation. Insurance panellists appointed under the WCS had been tasked by the Government to revise the current compensation package in terms of quantum and premium chargeable, and suggested several proposals in this respect. The proposals aimed at enhancing the level of compensation submitted to the Ministry of Human Resources for further analysis, and an internal task force was formed to further review those proposals. Upon careful review, the Ministry concluded that the majority of the insurance panellists agreed with the quantum increase on work-related injuries compensation involving temporary, total and permanent disability, deaths and occupational diseases suffered by foreign workers. The Government had also engaged a technical consultation with the ILO Senior Specialist on Social Protection from the Decent Work Technical Support Team in 2016 to seek guidance in improving the social protection of foreign workers, particularly looking into WCS. Foreign workers needed to be covered for both employment and non-employment injuries. No foreign worker should be deprived of such rights. Furthermore, it is the responsibility of every State to protect foreign workers’ rights and prevent all forms of discrimination. In this regard, the speaker concluded by observing that Malaysia would comply with the call of the Committee in ensuring the foreign worker’s accident compensation guaranteed by the Convention and that the Ministry will hold discussions on the WCS with the social partners for their further consideration on the revised quantum prior to submitting to the Government for approval. The speaker concluded by indicating that such efforts could help the Government to implement the Convention in a fair manner.

The Worker members indicated that the Committee had discussed the application of the Convention in Malaysia on numerous occasions, most recently in 2011, recommending that the Government should consider inviting a high-level advisory mission of the ILO and avail itself of the technical assistance of the Office. A technical consultation was held in 2016 in order to discuss options to address the persistent situation so as to guarantee equal treatment to migrant workers who suffer personal injury due to industrial accidents, or in case of death – to their dependants. There were more than 2 million registered migrant workers and more than 1 million unregistered migrant workers, mostly from Indonesia, Nepal and Bangladesh. Migrant workers constituted around 20–30 per cent of the Malaysian labour force. The demand for migrant labour in Malaysia was increasing steadily. In 2016, Malaysia signed a Memorandum of Understanding to bring 1.5 million Bangladeshi workers into the country. Migrant workers were concentrated in the agricultural sector (70 per cent of the workforce), the construction sector (45 per cent) and the manufacturing sector (30 per cent). Official data from the Department of Occupational Safety and Health compiled in 2014 demonstrated that these were also the sectors with the highest incidences of workplace accidents. The Embassy of Nepal provided records showing that its workers died at a rate of nine per week in Malaysia during the second half of 2014. Given that the official figures only took into account investigated accidents, it was estimated that the real number was even higher. The types of work migrants are usually engaged in were hazardous and, due to the lack of protective equipment and unequal treatment, the risk of accidents was aggravated. While the demand for migrant labour had been increasing, the reverse was true in terms of the protection provided for these workers. Since 1993, the transfer of migrant workers to the Workmen’s Compensation Scheme had put them at a serious disadvantage as the Employees’ Social Security (ESS) Scheme offered a higher level of protection. Under the ESS Scheme, a permanently injured worker was entitled to a periodical cash benefit of 90 per cent of the “assumed average daily wage”, whereas under the Workmen’s Compensation Act, the permanently injured worker was entitled to a lump-sum payment of only 62 months’ salary or 23,000 ringgits (around €4,800), whichever was less. In the case of an injury, Malaysian workers were entitled to free treatment at any government hospital or clinic and the medical bill was settled by the social security fund. Under the Workmen’s Compensation Scheme, the employers of migrant workers were required to pay for the workers’ medical expenses. This exposed migrant workers to possible abuse, if employers did not pay for the required treatment. Migrant workers could only claim refunds for medical costs after they had fully recovered and even then, it took several months for them to be refunded leaving them with no means of survival in the meantime. Undocumented migrant workers had no guarantees of safety from arrest while attempting to access medical treatment in the case of workplace accidents. In addition, a Malaysian injured worker who had been certified as unfit for work for at least four days was entitled to temporary disablement benefit equivalent to 80 per cent of his/her wages. Migrant workers suffering temporary disablement were only entitled to half-monthly payments of a third of their monthly wages. National laws establishing a differing treatment between foreigners and nationals are not consistent with the Convention. Ratifying States undertook to adopt special arrangements in relation to payments they would have to make abroad and the Government had provided no information on what special arrangements it had undertaken with other member States in relation to the payment of accident compensation for returning migrants. The Government had confirmed that it had been signing memoranda of understanding (MoUs) with eight countries of origin (Bangladesh, China, India, Indonesia, Pakistan, Sri Lanka, Thailand and Viet Nam) in order to regulate the recruitment of foreign workers. However, to the knowledge of the Worker members, none of these agreements addressed the equal treatment of migrants or social protection. Discriminatory treatment in relation to accident compensation was not the only area where the Government has failed to recognize the massive contribution of migrant workers to the country’s economic performance. Migrant workers were subject to multiple forms of discrimination and inequalities. The Industrial Court had ruled that migrant workers working under a fixed-term contract could not benefit from the conditions agreed in collective agreements. Migrant domestic workers were in an even worse situation. Though critical to filling the increasing demand for household and caregiving services, domestic workers were excluded from the most basic labour protections, including social security coverage. Malaysia had benefited greatly from the employment of migrant workers in several economically important sectors. During the last two decades, those workers had helped to provide the labour that had fuelled the country’s emergence into an upper middle-income country. However, the Government had failed to protect the rights of migrant workers and to treat them equally, specifically in relation to accident compensation. The Government was therefore clearly not fully respecting its obligation under the Convention.

The Employer members recalled that this case dated back to 1993, when foreign workers employed in Malaysia for up to five years had been transferred from the ESS Scheme to the WCS. Ever since, benefits provided under the WCS had been lower than those provided under the ESS Scheme and there had therefore been a clear divergence with the provisions of the Convention which established the principle of equality of treatment between foreign workers and national workers without conditions of residence. Importantly, the Convention required foreign workers to be treated in the same way as national workers and not the other way around. Since 1996, the Committee on the Application of Standards had been continuously requesting that foreign workers be transferred back to the ESS Scheme. The Government had indicated in 2011 that it was considering various options within a technical committee of the Ministry of Human Resources with the involvement of all stakeholders. In its last report, the Government had indicated its intention to extend the coverage of the ESS Scheme to documented foreign workers subject to certain modifications aimed at ensuring administrative practicability of the new arrangements. In 2016, the Government had contacts with ILO social security specialists to evaluate the conformity of the modified scheme with the Convention. Extending the ESS Scheme to foreigners would require overcoming difficulties, notably with respect to the difficulties that led to the introduction of separate treatment between foreign workers and national workers. Referring to the 24 month contributory period for access to employment injury benefits under the ESS Scheme, which does not exist under the WCS, the Employer members observed that foreign workers were not suited for the ESS Scheme since they had generally been contracted for up to two years, in other words less than the qualifying period.

Taking into account the large number of migrant workers concerned and the high incidence of accidents experienced by this group, three main factors needed to be reconciled with a view to achieving the objective of equity. Firstly, the administrative and practical difficulties to ensuring equality of treatment were related to the fact that migrant workers were generally undertaking project work for less than two years and were being repatriated if they had become incapacitated following an industrial accident, which had made compensation an administrative and logistical challenge. Secondly, the question of whether the Convention provided for absolute equality needed to be answered in the light of the requirement of the Convention that migrant workers must receive the same treatment as national workers or whether treatment of equal value would also be acceptable under the terms of the Convention. Finally, there was a need to also determine the actuarial equivalence of the lump sum paid under the WCS to migrant workers and the value of the periodical payments granted under the ESS Scheme to Malaysian workers. The comparison between the value of periodic benefits and that of lump-sum payments was a particularly technical and delicate question. Depending on the answer, the WCS could have been viewed as a suitable and practicable solution for managing employment injury and invalidity benefits for foreign workers in Malaysia; if necessary with certain adjustments to the value of the lump-sum payments. If absolute equality was required, then means must be found to make it operational under separate levels of jurisdiction of the Malaysian Federation. Such problems were faced by other federal States and a lasting solution required taking into account the practicalities mentioned above. The Employer members concluded by requesting the Government to indicate the reasons for which the actuarial equivalence of the lump sum paid under the WCS to migrant workers with the periodical payments granted under the ESS Scheme to Malaysian workers had not been robustly established by the Government since it had been requested three years ago; how compensation had been paid and what compensation had been paid, in the event of an occupational accident or disease of migrant workers; the enforcement and administrative constraints regarding in particular the remittance of payment of accident compensation benefits to the next of kin or dependants of migrant workers in their country of residence; progress made towards reconciling the different treatment of workers covered by the ESS Scheme and foreign workers covered by the WCS; the future plans to align the treatment of foreign workers with that of Malaysian nationals in the event of accidents; and complementary information as to any special arrangements concluded with countries of origin in this respect.

The Employer member of Malaysia pointed out that the previous recommendations made by the Committee could not be implemented as quickly as expected. The Malaysian Employers Federation believed that the Government’s decision to place foreign workers under the WCA in 1993 was based on valid and practical reasons. Firstly, he explained, foreign workers were contracted to work in Malaysia for an initial period of two years, with a possible extension of up to five years. If such workers were placed under the Social Security Act, they would be required to make contributions for a minimum period of 24 months before they could be eligible for payment under the invalidity pension scheme; whereas under the WCA, such workers were eligible for compensation from the day of commencement of employment, without having to make any contributions. Secondly, under the WCA, the premiums for the insurance were fully paid by the employer and foreign workers were not required to make any payment for insurance coverage. This was not the case under the Social Security Act, under which employers and employees were required to make monthly contributions to the Scheme. Thirdly, when foreign workers were contracted to work in Malaysia and in the event that such workers suffered workplace injury or were declared invalid, periodical payments would need to be remitted on a monthly basis to the country of origin, which would pose an administrative burden on the administrator. Under the WCA, a lump sum was paid, which was also more practical for foreign workers. He concluded by requesting the Committee to look at the practical aspects of insurance coverage for foreign workers so that, ultimately, it was in the interest and for the benefit of the foreign workers themselves.

The Worker member of Malaysia stated that the Malaysian Trade Union Congress considered that migrant workers in Malaysia should be transferred from the WCS back to the ESS Scheme, as per the Government’s promise in 2011. The ILO Review of Labour Migration Policy in Malaysia in 2016 had noted the Government’s indication that it would consult with the relevant stakeholders regarding three options for providing accident compensation to migrant workers. However, no steps were taken to that end. Migrant workers in Malaysia were often employed in dangerous jobs without sufficient protective equipment or training. A high incidence of workplace accidents had been documented, with the largest number of injuries and deaths at work occurring in the manufacturing, construction and agricultural sectors, all of which were major sectors of employment for migrant workers. It must be noted, however, that under the 11th Malaysia Plan (2016–20), the Government intended to develop and implement a comprehensive immigration and employment policy for migrant workers, with the Ministry of Human Resources assuming the lead role in policy-making. The Government’s engagement with the various stakeholders, including the ILO, was also appreciated. Nevertheless a mere increase in the amount of compensation paid to foreign workers for work-related injuries involving temporary or total and permanent disability, death and occupational diseases would not suffice to place migrant workers on an equal footing with workers under the ESS Scheme. In 2016, a total of 483 complaints of denial of access to medical treatment, uncompensated accidents, hazardous work places, deaths, poor living conditions, deprivation of food, difficulty in seeking health care and long working hours had been reported and investigated by the authorities. It was believed, however, that many cases went unreported by employers to avoid legal and financial liability, in particular, if irregular workers were involved. He called on the Government to take immediate steps to develop and implement a comprehensive Foreign Employment Policy with realistic and workable occupational safety and health provisions. The Policy must regulate recruitment through the ESS Scheme, thereby ensuring that all migrant workers had a legitimate employer, and knew who their employer was, which would assist the Government to document all migrant workers. The policy should also be in compliance with the ILO Fair Migration Agenda and must ensure that in cases of accidents and deaths, the victims or the next of kin received adequate compensation, as provided under the ESS Scheme. These cases must be published and made publicly available to create awareness. In addition, the policy must be consistent with the provisions of the ESS Scheme to ensure the migrant worker’s right to paid medical leave and other rights not enjoyed by migrant workers under the WCS. It must put in place a process which would prevent employers from making deductions the wages to reclaim the cost of medical treatment and impose a duty on the employer to report an accident or fatality at the workplace immediately so as to engage the employer’s liability and pay the compensation to the migrant worker or his or her family in accordance with the ESS Scheme. Employers who terminated work permits of migrant workers on prolonged sick leave must be reprimanded and obliged to reinstate the work permits so as to ensure that the worker concerned could proceed with the litigation for compensation and enforce the liability of the employer. Finally, the policy must incorporate training of migrant workers on their rights, access to justice, and safety and health. The speaker concluded by stating that the Government should avail itself of ILO technical assistance, and accept an ILO Direct Contacts Mission to meet the Government’s objective to develop a comprehensive immigration and employment policy for migrant workers and to put it into immediate effect.

The Government member of Malta speaking on behalf of the European Union (EU), as well as the former Yugoslav Republic of Macedonia, Montenegro, Serbia, Bosnia and Herzegovina, Norway and Georgia, welcomed the initialling in 2016 of the Partnership and Cooperation Agreement (PCA) between the EU and the Government. The PCA further strengthened the bilateral cooperation and encompassed a wide range of areas, including sectorial cooperation on labour and employment. Both parties had signalled that they wished to sign the PCA by the end of 2017. Foreign workers provided much needed skills and made invaluable contributions to Malaysia’s social and economic development. They often filled jobs that were considered undesirable by nationals. Yet, their contribution was often not fully recognized, and they remained vulnerable to precarious conditions, abusive practices or unequal treatment, and to increased risks of accidents and health problems. The speaker expressed deep concerns regarding the discriminatory treatment of foreign workers that were not receiving equal treatment as compared with national workers in respect of employment injuries compensation. This long-standing issue persisted since 1993, despite the recurrent calls from the Committee to put an end to this practice. In its last report, the Government had expressed its willingness to extend the social security scheme applicable for national workers to foreign workers. The Government had also held consultations with the Office with a view to initiating internal discussions on the way forward. It was hoped that as a follow-up to these consultations, the Government would take the necessary measures in order to put an end to this discriminatory practice and ensure equal treatment of foreign workers with regard to accident compensation. The EU was available to provide further assistance in that area in the context of the recent meeting between the EU and the Association of Southeast Asian Nations (ASEAN) Committee on the Implementation of the ASEAN Declaration on the Protection and Promotion of the Rights of Migrant Workers (ACMW), in which representatives of the Government had participated actively. The EU remained committed to constructive engagement and partnership with the Government.

The Government member of Thailand speaking on behalf of the Association of Southeast Asian Nations (ASEAN), indicated that the Government had made efforts to address the issues pertaining to the application of the Convention and encouraged the Government to expedite the conclusion of internal studies and the discussions with relevant national agencies. The Government had engaged with the ILO technical specialists to assist in improving the social protection of foreign workers under the WCS. The speaker supported the positive actions taken by the Government, in particular with regard to engaging with the insurance panellists appointed under the WCS to revise and improve the accident compensation scheme. The Committee should consider the foregoing significant efforts of the Government and the progress already achieved.

The Worker member of Singapore recalled that work injury or accident compensation was an important safeguard for workers to make claims for work-related injuries or diseases, without the need for costly legal action. It was often a quick and effective way to provide social security and protection to workers in times of need. It was thus regrettable that this fundamental protection was subject to discriminatory practices. Despite numerous examinations by the Committee of Experts and the Conference Committee, there had been no practical response from the Government in addressing the disparities between nationals and foreign workers since 1993. As of September 2016, there were 1.85 million foreigners with valid Temporary Employment Passes in the country. The majority of foreign workers came from Indonesia (close to 750,000 workers), followed by Nepal (410,000 workers), Bangladesh (238,000 workers), Myanmar (140,000 workers), India (121,430 workers) and others (194,000 workers). These numbers did not include the vast number of unregistered foreign workers. Most foreign workers were employed in places with high accident risks, such as construction, manufacturing and plantations. She recalled that the Committee of Experts had previously concluded that the Government had “undermined the system of automatic reciprocity in granting equality of treatment to nationals of ratifying States” and that parties to the Convention must implement the principle of equal treatment in respect of workmen’s compensation between their own nationals and foreign workers. According to the 2015 World Bank’s report, Malaysia had the fourth largest number of migrants and the seventh highest ratio of migrants to total population in East Asia and the Pacific. Immigrant labour played a crucial role in Malaysia’s development towards the Government’s articulated Vision 2020. As nationals had become more educated, immigrant labour helped to fill in the gaps in the low- and mid-skilled jobs, which represented three quarters of all jobs in Malaysia. She called on the Government to consider the humane aspect of the issue as injured foreign workers may be unable to work when they were repatriated to their home countries, and many were the sole breadwinners in their respective families. The Government needed to recognize that these workers contributed directly to the country’s economic growth and thus should be treated without discrimination. She called upon the Government to urgently resolve the differences between the ESS Scheme for nationals and the WCS for foreign workers so as to ensure equitable and adequate protection for every worker.

The Worker member of Australia drew attention to the situation of Nepalese migrant workers working in Malaysia, who were subject to lower accident compensation protection compared to Malaysian workers. Since 1993, only Malaysian citizens and permanent residents were eligible to contribute to the social security system and benefit from financial assistance in the event of an industrial accident. Nepalese migrant workers were only eligible for coverage under the WCA for employment injury compensation. Many employers of Nepalese workers however made no contribution under this scheme. Moreover, the protection offered under the WCA was much lower than that available to Malaysian workers. For example, the claim process under the WCA was complex and a health assessment of the injured worker could take over three months. Under the claims process, an employer could also reclaim expenses incurred for an injured worker’s treatment. The fact that most Nepalese workers worked long hours in dangerous occupations in plantations, factories and the mining industry without safety equipment also increased the risk of injury, which in turn amplified the effect of the discrimination. In the case of undocumented workers, no accident compensation was provided under any scheme. Moreover, there were no guarantees of safety from arrest while attempting to access medical treatment for undocumented workers, which had a chilling effect on reporting injuries. It was common practice to repatriate injured workers back to Nepal. The Nepalese embassy reported that, in the last three years, the number of workplace fatalities of Nepalese workers in Malaysia had been 348 in 2014, 461 in 2015 and 386 in 2016, i.e. an average of nine deaths per week. In most cases, the official cause of death was cardiac arrest and no post-mortem examination was carried out. The breaches of the Convention had persisted for many years and the ILO had offered technical assistance to the Malaysian Government for a number of years. He urged the Committee to make strong recommendations which would increase the degree of ILO supervision to continue the engagement of the Government and the technical assistance involving all stakeholders. This should ensure further and urgent steps to strengthen compliance with this Convention to secure equal treatment for Malaysian and foreign workers with regard to accident compensation.

The Worker member of Indonesia emphasized that Malaysia had benefited greatly from the employment of migrant workers in several economically important sectors, while migrant workers had not received fair treatment. Particularly, in respect of the employment injury compensation, migrant workers were provided with a lump sum under the WCS rather than a periodical payment under the social security system. Moreover, this protection did not extend to domestic workers. As a result, they were not provided with any guarantee of compensation in the event of workplace-related injury. In 2006, Malaysia and Indonesia signed an MoU on the employment of domestic workers. However, existing gaps allowed widespread abuse by employers. Due to the high number of complaints received, Indonesia suspended the deployment of domestic workers to Malaysia in 2009, pending a revised agreement. Referring to the case of a Filipino domestic worker who was denied access to proper medical assistance when injured, the speaker stated that the Government had failed its obligation under the Convention regarding the provision of basic labour protection to migrant workers. In this regard, comprehensive measures were needed along with the extension of social protection.

The Government representative reaffirmed that managing the welfare of foreign workers had always been a priority to the Government, as evidenced by the 11th Malaysia Plan (2016–20). In order to achieve the aspirations laid out in that Plan, the Government had undertaken numerous initiatives, including a review of labour laws and regulations, the introduction of the employers’ responsibility for workers from their arrival until their return to their countries of origin and the introduction of a guideline on foreign workers’ accommodation with basic amenities. The contributions to the WCS were payable only by employers and covered compensation for accidents that occurred not only during working hours but also outside of working hours. In addition, the scheme did not impose any qualifying period to receive the compensation. Thus, foreign workers received the compensation immediately after the incident had taken place. Contribution to the WCS was one of the pre-conditions to be authorized to hire foreign workers. In relation to the statement made on procedural elements pertaining to paid sick leave, reporting of accidents, payment of compensation, and the importance of the safety and health of workers, these elements were already embedded under existing labour laws and regulations. The Government made progressive efforts in order to enhance the benefits available under the WCS. The Government had engaged with insurance panellists to revise the quantum and the benefits of the WCS and would conduct further deliberation with the social partners in due course. He pledged the full and undivided commitment of the Government to the efforts that lied ahead, to ensure that the WCS would be in conformity with the requirements of the Convention.

The Worker members noting the information provided by the Government representative, considered that there remained no doubt that national laws and practices were completely out of line with the Convention and that migrant workers suffered unequal treatment with respect to employment injury protection. This was not a recent problem. However, with the growing number of migrant workers, the consequences of this discriminatory behaviour were escalating. The WCS was less favourable than the ESS Scheme with respect to the duration, level and types of benefits workers received in the case of workplace injury. The Committee on the Application of Standards had recommended on several occasions that the Government take the necessary steps in order to bring its legislation in line with the Convention and had benefited from ILO technical assistance on this matter. The Worker members expressed the hope that the discussion would finally make a difference in ensuring that the Government took urgent steps to remedy the key areas of concerns, in consultation with the country’s social partners. Migrant workers were to be reintegrated in the ESS Scheme and were entitled to the same level of accident compensation as Malaysian nationals. Moreover, the Government needed to make sure that special arrangements with other ratifying States where migrant workers come from were negotiated so that migrant workers could benefit from the same level of protection after they return to their country of origin. The necessary measures needed to be taken in order to ensure that undocumented migrant workers did not have to fear arrest and retaliation when they seek medical assistance following workplace accidents. Discrimination in relation to accident compensation was sadly not the only area where migrant workers lacked protection. Even though, a substantive part of the labour force was constituted of migrant workers, Malaysia had failed in providing workers with the necessary protections of their fundamental rights guaranteed under ILO standards. The Worker members expressed the sincere hope that there would be a change of attitude in relation to this category of workers, especially if the Government continued recruiting more migrant workers.

The Employer members thanked the Government for the efforts made in overcoming the difficulties faced in the implementation of the Convention. Equality of treatment was required by the Convention. At the same time, strict equality of treatment should not result in dismantling the protection currently enjoyed by migrant workers under the WCS by subjecting them to qualifying conditions required by the ESS Scheme. Practical solutions were therefore to be explored and the Government needed to provide more information in this respect and a clear statement as to the current development policy for the employment of migrant workers. The Employer members concluded by referring to the Government’s indication that it would hold tripartite consultations on these issues in due course, urging it to undertake these consultations soon.

Conclusions

The Committee took note of the oral statements made by the Government representative and the discussion that followed.

Taking into account the discussion, the Committee called upon the Government of Malaysia to take immediate, pragmatic and effective steps to ensure that the Convention’s requirement for equal treatment of migrant workers and national workers is met.

The Committee nevertheless called upon the Government to expedite its efforts to address this long-standing issue, as the need for real progress is becoming increasingly urgent. Specifically, the Committee calls upon the Government of Malaysia to, without delay:

- take steps to develop and communicate its policy for governing the recruitment and treatment of migrant workers;

- take immediate steps to conclude its work on means of reinstating the equality of treatment of migrant workers, in particular by extending the coverage of the Employees’ Social Security Scheme to migrant workers in a form that is effective;

- work with employers’ and workers’ organizations to develop laws and regulations that ensure the removal of discriminatory practices between migrant and national workers, in particular in relation to workplace injury;

- adopt special arrangements with other ratifying member States to overcome the administrative difficulties of monitoring the payment of compensation abroad;

- take necessary legal and practical measures to ensure that migrant workers have access to medical care in the case of workplace injury without fear of arrest and retaliation;

- avail itself of the technical assistance of the ILO with a view to implementing these recommendations and to develop mechanisms for overcoming the practical issues affecting implementation of the domestic social security scheme to migrant workers.

Individual Case (CAS) - Discussion: 2011, Publication: 100th ILC session (2011)

A Government representative referred to the background of this case, emphasizing Malaysia’s situation as a trading nation with an open economy facing volatile external market influences. The steady growth of the Malaysian economy had largely been attributed to the Government’s pragmatic leadership and flexible policies and initiatives to diversify and build a more multi-sectored economy. Labour had always been central to the economic transformation of Malaysia over the past five decades. In this framework, the Government had articulated Vision 2020 which envisioned a holistic development status by the year 2020 and had set in motion in 2010 the New Economic Model (NEM) to improve competitiveness in all economic sectors by systematically fostering innovation and promoting higher value-added sources of growth. The NEM was supported by four pillars: Malaysia: People First, Performance Now concept; the Government Transformation Program (GTP); the Economic Transformation Program (ETP); and the Tenth Malaysia Plan (10MP). In line with this policy, the Decent Work Agenda for the country’s workforce relied among other principles on a firm and constant policy of ensuring adequate and equitable social security protection for all workers in the country regardless of their background. In the quest to achieve a balance between socio-economic development and social equity, the Prime Minister’s Department had since 2010 initiated a series of “Lab studies” to review the country’s principal pieces of labour legislation and recommend modern and realistic provisions, in addition to examining new areas of improvement in relation to the management of foreign workers. The findings and outcomes of the studies included, among other areas, the promotion of a sound and quality social security management, and were currently being tabled for consideration and endorsement by the Malaysian stakeholders.

The Government of Malaysia was committed to building consensus for common goals, through regular collaborative engagement with the tripartite social constituents in particular, so as to generate a common perspective on the appropriate system for managing and administering social security for workers in Malaysia. The Government through the National Labour Advisory Council (NLAC) within the purview of the Ministry of Human Resources, and in collaboration with several other consultative forums and stakeholders, undertook to constantly pursue the formulation of the right mechanism and system to administer and remedy this issue.

The Worker members said that this case involved clear and unmistakable discrimination against foreign workers in relation to compensation for industrial accidents. The transfer in 1993 from the Employees’ Social Security (ESS) Scheme to the Workmen’s Compensation Scheme (WCS) resulted in a deterioration of the conditions applicable to foreign workers, as compensation for industrial accidents, which consisted of a flat-rate lump sum, was much less beneficial than the measures envisaged by the 1969 Social Security Act for employed persons, namely the provision of a pension or other periodical payments to victims or their dependants. Moreover, the conditions governing insurance against industrial accidents differed for national and foreign workers. In 1997, this Committee had called on the Government to re-establish equality of treatment and, following a high-level advisory mission, the Government had indicated in 1998 that it envisaged reviewing the situation of foreign workers in relation to the social security scheme. However, nothing had been done. Indeed, in its latest reply in 2010, the Government no longer considered it necessary to modify its law or practice. It referred to administrative and practical problems in the payment of benefits and the monitoring of workers who had returned to their country, as a justification for discrimination.

Recalling the requirements of the Convention (Article 1(1)) regarding equality of treatment between nationals and foreign workers from Members which had ratified the Convention, and concerning mutual assistance between such member States (Article 4), they emphasized that such arrangements were all the more relevant in that most of the foreign workers in Malaysia came from countries which had also ratified the Convention. In the absence of a comparative and actuarial study by the Government of the two schemes for the different types of compensation (temporary and permanent incapacity, invalidity and survivors’ benefits), and as the Government claimed that the lump sum payable to foreign workers was not lower than the pension paid to national workers, the Government should allow foreign and national workers to choose between the two schemes.

The Government clearly had no intention of complying with the Convention and did not envisage granting equal treatment to workers from other member States that had ratified the Convention. Such deliberate violation of the Convention had serious consequences, as there were many foreign workers in Malaysia (1.9 million in 2007), and many industrial accidents occurred among foreign workers (13,000 officially reported in 2006). Moreover, most of the workers were from countries in the region for which practical arrangements would be possible with a minimum of goodwill. The case was illustrative of the discrimination suffered by migrant workers in the region and justified the fact that the Committee of Experts had requested Malaysia to provide explanations to the Conference concerning such a deliberate violation of the Convention.

The Employer members emphasized that the basic principle behind the Convention, adopted as early as 1926, was that migrant workers should receive no less favourable treatment regarding accident compensation than national workers in line with the fundamental principle of equality of treatment between national and non-national workers. In ratifying the Convention in 1957, Malaysia had undertaken to guarantee this principle to migrant workers and their dependants without any condition as to residence (Article 1(2) of the Convention) and to enter into special arrangements with other member States so as to make payments outside Malaysia (Article 2). Moreover, the member States which ratified this Convention undertook to afford each other mutual assistance with a view to facilitating its application (Article 4).

The Employer members noted the history of this case, emphasizing that Malaysia’s adherence to the Convention had been non-contentious until 1996, when the Government asserted that the coverage of certain categories of Malaysian nationals and migrant workers with regard to accident compensation had been transferred already in 1993 from the ESS scheme to the Workmen’s Compensation Act (WCA) due to enforcement and administrative constraints, particularly regarding the remittance of payment of accident compensation benefits to the next of kin or dependants of migrant workers in their home country. In 1996, the Employer members had noted that the WCA provided for a level of benefit lower than the previous one and that as long as Malaysian workers continued to be covered by a scheme offering a noticeably higher level of benefits, there was a clear divergence with the provisions of the Convention. This Committee had expressed the hope that the Government would in the very near future take all necessary measures to reintegrate migrant workers into the same system as nationals. In 1998, the Committee of Experts had noted that the report requested in 1996 had not been received and that in the event of an occupational accident, migrant workers received compensation in the form of a lump sum, whereas nationals had the right to the periodic payment of these benefits. As the Government had not provided a report, the Employer and Worker members considered that this Committee was bound to reiterate its previous conclusions and expressed the hope that the results of the recently conducted ILO advisory mission would help to resolve the problems.

The Committee of Experts then made observations in 1999, 2000, 2001, 2002, 2003 and 2006. In 2008, the Committee of Experts noted that, taking into account the large number of migrant workers concerned and their high accident rate, the situation called for special efforts from the Government to overcome the administrative and practical difficulties that were impeding equal treatment of migrant workers who suffered industrial accidents. In particular, in 2008, the Government was asked to demonstrate the actuarial equivalence of the lump sum paid under the WCS to migrant workers to the amount of the periodical payments granted under the ESS to Malaysian workers. Attention was also drawn to the possibility of overcoming any difficulties in the payment of compensation abroad, through special arrangements between the Members concerned in line with Article 2 of the Convention.

The Employer members emphasized that today was the third examination of this case in this Committee since ratification. They noted with regret that according to the latest report of the Committee of Experts, the Government saw no need to modify its national law and practice to bring it into conformity with the Convention or to resort to the technical assistance which the international community was willing to provide for this purpose. It was therefore not surprising that the Committee of Experts had invited the Government to supply full particulars to the Conference Committee and to report in detail in 2011. The elapse of time between 1996 and 2011 demonstrated that there was a significant barrier preventing the Government from fully complying with the Convention with regard to the amount paid and how it was paid to migrant workers and their dependants.

The Employer members called for a solution to this issue in compliance with the Convention. They asked in particular for information on the following: the reasons for which the actuarial equivalence of the lump sum paid under the WCS to migrant workers to the periodical payments granted under the ESS to Malaysian workers had not been robustly established by the Government since it had been requested three years ago; how compensation was paid and what compensation was paid, in the event of an occupational accident of migrant workers originating from countries which had ratified the Convention, such as, Indonesia, India, Myanmar, Bangladesh, the Philippines (which had ratified in 1994), Thailand, Pakistan and China; the arrangements in place with other member States in order to make payments outside Malaysia, as envisaged in Article 2 of the Convention; the enforcement and administrative constraints regarding in particular the remittance of payment of accident compensation benefits to the next of kin or dependants of migrant workers in their home country. Since the Cartier working group had asserted that Convention No. 19 was likely to receive further ratifications, there was a need to obtain a better understanding of the barriers to implementation.

The Worker member of Malaysia stated that approximately five million foreign workers in Malaysia, either recorded or unrecorded, did not benefit from equal treatment in terms of social security in case of employment-related injuries and/or diseases, as they had been excluded from the ESS scheme and placed under the WCS. The inequalities they suffered related to the fact that under the ESS, a worker benefited from mandatory social security protection regardless of whether the work was registered or unregistered; the coverage was wider, including both accidents and illness or diseases, as well as accidents suffered while commuting to and from work; payments were periodic akin to a pension scheme; there was a lump sum payment; and a higher amount of compensation was awarded. Workers’ compensation under the WCS on the other hand, was confined to a lump sum payment that was far lesser compared to the ESS Scheme. Further, under the WCS, only reported cases led to compensation. If an accident was not reported, the worker was not entitled to any benefits. The High Court had recently ruled that a foreign worker, whose permit had expired after one year of residence, had no legal standing to claim benefits because his status was irregular. Even though it was reassuring to hear that the Government was looking into this matter, the speaker called for specific progress to be made since this issue had been reviewed by the Conference Committee three times.

The Employer member of Malaysia indicated that the WCS was a suitable and practicable approach for managing employment injury and invalidity benefits for foreign workers in Malaysia. Under the ESS, employees were required to contribute for a minimum of 24 months before they or their family could get any benefit under the scheme in case of industrial accidents or occupational diseases. Foreign workers would be required to contribute 0.75 per cent of their wages towards the invalidity and pension insurance scheme and if they were declared to be an invalid before having contributed for 24 months, they would be deprived of any invalidity pension despite having made contributions. Under the WCS once foreign workers were insured, they were covered by the scheme and there was no requirement for 24 months of contributions before the foreign workers could be entitled to the benefits under the scheme. Foreign workers in Malaysia were generally contracted for up to two years at a time and therefore, the ESS scheme was not suitable for them.

The Worker member of Australia shared the concern expressed by the Worker members over the longstanding failure of the Malaysian Government to comply fully with Convention No. 19 and regretted that the Government had not yet addressed the points raised by the Committee of Experts and this Committee, despite numerous examinations over the past years. The speaker noted that Malaysia was a destination for many workers in the region seeking better employment opportunities, and that at present, over two million migrant workers performing a wide range of work, including in industries with a high risk of serious accidents, were registered in the country. In this regard, international labour standards provided ratifying states with guidance as to appropriate laws and policies to be established to ensure respect for the rights of migrant workers. A key principle in these instruments, including in Convention No. 19, was the principle of equality of treatment and non-discrimination of migrant workers. The existence within Malaysia of two distinct laws, regulating compensation in the event of workplace accidents, the application of which depended on the nationality of the worker, and which provided for different levels of payments, failed to comply with the fundamental principle of non-discrimination and equality of treatment. Under the current arrangement, a migrant worker who was injured as a result of an accident at work received a lump sum payment that was significantly lower to the ongoing payments paid to local workers under the ESS scheme. Migrant workers were not entitled to ongoing support and might find themselves not only without a job, but also without adequate income security to support themselves and their family. Furthermore, the speaker noted that the present case embodied a number of key themes being discussed at the 100th International Labour Conference, including the importance of taking a rights-based approach and of ensuring the extension of social security protection to all workers, as well as the right for all workers to be free from discrimination as stated in the Director-General’s Global Report under the follow up to the 1998 ILO Declaration on Fundamental Principles and Rights at Work. The dominance of these themes in this year’s Conference reinforced the centrality and importance of ensuring decent work for all workers. While recognizing that the management of workers’ compensation for migrant workers might pose administrative and practical challenges, the speaker emphasized that sensible arrangements in line with the Convention were achievable and reminded the Government of its obligations. In this regard, technical assistance was available. She concluded by urging the Government to take immediate steps to ensure equal protection for migrant workers under national laws with respect to workers’ compensation, in full compliance with the Convention.

The Government member of Singapore welcomed the positive steps taken by the Government of Malaysia in order to review the country’s principal pieces of labour legislation and recommend modern and realistic provisions through a series of studies under the auspices of the Prime Minister’s department. He also noted that the findings and outcomes of the studies contained proposals for improvement in relation to the management of foreign workers in Malaysia, including their social protection. As the outcome of the studies was being tabled for consensus and endorsement by the stakeholders of Malaysia, the speaker welcomed these consultations and urged the Committee to allow the Malaysian Government more time for the review process to be completed. His Government looked forward to a successful review so as to help the Government of Malaysia identify areas for improvement and the gaps in legislation in its effort to formulate the right solution and tackle the challenges in administering social security protection for all the workers in Malaysia.

The Worker member of Indonesia recalled that most foreign workers in Malaysia were Indonesian nationals, currently estimated at approximately 2.5 million, both documented and undocumented. Many of them were working in construction, the manufacturing industry and plantations, thus facing high risks of work accidents. It was indeed important that they should be respected and treated equally as they were making a significant contribution to the country’s development. The speaker supported the recommendation of the Committee of Experts which called for equal treatment of both local and foreign workers. The latter should be covered by the ESS scheme while the WCS should be discontinued. It was common practice in the Asian context, including in Indonesia, to treat foreign workers equally. Under the Indonesian social security law, all workers had access to social security benefits including foreign workers, in case of injury, even though the economic development of Indonesia was lower than that of Malaysia. For many years after the introduction of WCS, hundreds of thousands of Indonesian workers had been doubly penalized in case of accident by not only losing their jobs and being sent back home, but also by not having any social security protection and facing difficulties in finding a new job in their own country. Extending protection to foreign workers through equal treatment would not involve additional expenditures for the public budget because the social security contributions would be paid by the workers and employers concerned. The speaker concluded by indicating that in July 2009, his trade union Konfederasi Serikat Buruh Sejahtera Indonesia (KSBSI) had signed a Memorandum of Understanding with the Malaysia Trade Union Congress (MTUC) under which these two International Trade Union Confederation (ITUC) affiliates agreed to work together to strengthen the protection of Indonesian migrant workers in Malaysia including through industrial accident protection. Their action included producing a so-called migrant workers’ passport with information on the rights of foreign workers. The speaker expressed the hope that both unions would be involved in the future in discussions on the improvement of industrial accident compensation legislation in Malaysia.

The Government representative expressed his Government’s respect and appreciation for the views and comments submitted by various member States and the social partners in relation to the application of the Convention in Malaysia. He reinstated Malaysia’s commitment to heighten its collaboration and engagement with the social partners to address and tackle priority labour issues of common concern, pursuant to the country’s Decent Work Agenda. Malaysia treasured and valued genuine and constructive tripartism and addressed matters through social dialogue. In the past months, the Government, under the auspices of the Prime Minister and with the engagement of several ministries and departments had discussed new ways of dealing with labour issues arising out of challenging labour market. The Government’s journey towards making a difference required indulgence, understanding and support. In today’s economic scenario, the Government’s priorities were directed towards securing the welfare and well-being of workers, without distinction as to their background.

The Worker members emphasized that the case involved flagrant discrimination against foreign workers in relation to compensation for industrial accidents, which was in direct contradiction with the principle of equality of treatment set out in the Convention. Moreover, the Government showed no will to remedy situations of discrimination, by continuing to refer to practical problems related to making payments and monitoring, while failing to establish specific arrangements with the countries of origin of the workers concerned, as envisaged by Article 4 of the Convention. The Government therefore needed to reconsider as rapidly as possible the discrimination that had existed since 1993, reintegrate foreign workers into the Employees’ Social Security Scheme and keep the Committee of Experts informed of the measures envisaged in that respect. In conclusion, they called on the Government to request a high-level mission with a view to addressing the administrative issues at the regional level.

The Employer members, referring to the statements of the Government representative, pointed out that the Government had not mentioned Convention No. 19 in its concluding remarks. While taking note of the measures adopted by the Government of Malaysia, no information had been given on the implementation of such measures and how this could affect compliance with the Convention. Recalling that many countries, such as Indonesia, Nepal, Bangladesh, India, Pakistan, Viet Nam, Cambodia, Thailand, and the Philippines had migrant workers in Malaysia, he questioned how compensation for industrial accidents was paid to migrant workers and what enforcement mechanisms were in force. They urged the Government to take action, in consultation with the social partners, to ensure compliance with the Convention and to engage with the Conference Committee and the ILO.

Conclusions

The Committee noted the statement of the Government representative and the discussion that followed. The Committee recalled that, since 1 April 1993, when foreign workers employed in Malaysia for up to five years were transferred 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, the Malaysian social security system had contained inequalities of treatment which ran counter to the provisions of the Convention.

The Committee noted the information provided by the Government highlighting Malaysia’s situation as a trading nation with an open economy facing volatile external market influences, as well as the Government’s pragmatic leadership, which ensured the steady growth of the Malaysian economy in the past decades. In this framework, the Government had set in motion in 2010 the New Economic Model (NEM) to improve competitiveness in all economic sectors. The Committee also noted that the Prime Minister’s Department had since 2010 initiated a series of Lab studies to review the country’s principal pieces of labour legislation and recommend modern and realistic provisions, in addition to examining new areas of improvement in relation to the management of foreign workers. The findings and outcomes of the Lab studies included, among other areas, the promotion of a sound and quality social security management, and were currently being tabled for consideration and endorsement by the Malaysian stakeholders. The Government through the National Labour Advisory Council (NLAC) within the range of authority of the Ministry of Human Resources, and in collaboration with several other consultative forums and stakeholders, undertook to constantly pursue the formulation of the right mechanism and system to administer and remedy this issue.

The Committee hoped that the Lab studies and the broad tripartite consultations conducted by the Government through the NLAC would provide the right framework for the re-examination of the social security coverage of foreign workers in respect of industrial accidents, and that the Government would be able to report their findings in this area in its next detailed report on the Convention due in 2011. Regretting however that the Government representative had given no full replies to the concrete questions raised by the Committee of Experts, the Committee urged the Government to reconsider its position in its 30 July 2010 report that there was no need to modify national law and practice, and to take immediate steps in order to bring national law and practice into conformity with Article 1 of the Convention. It also urged the Government to include in the next report a full comparative analysis of the benefits provided by the ESS and WCS schemes and to demonstrate the actuarial equivalence of the lump sum paid under the WCS to foreign workers in cases of temporary or permanent incapacity, invalidity or survivors’ rights to the amount of the periodical payments granted under the ESS to Malaysian workers in similar cases.

Furthermore, the Committee observed that by not complying with the principle of equality of treatment between nationals of any other member State which has ratified the Convention and its own nationals, the Government of Malaysia undermined the system of automatic reciprocity in granting equality of treatment to nationals of ratifying States that the Convention established between them. This concerned, in particular, countries which were supplying workforce to Malaysia and were also parties to the Convention: Indonesia, India, Bangladesh, Philippines, Thailand, Pakistan and China. The Committee recalled in this respect that the administrative difficulties of monitoring the payment of compensation abroad could be overcome by way of special arrangements between the Members concerned in line with Article 1(2) of the Convention, and that Article 4 required ratifying Members to afford each other mutual assistance with a view to facilitating the application of the Convention. In this context, the Committee considered that, in order to make full use of Articles 1(2) and 4 of the Convention, the Government should consider inviting a high-level advisory mission of the ILO and avail itself of the technical assistance of the Office.

Direct Request (CEACR) - adopted 2023, published 112nd ILC session (2024)

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Article 1 of the Convention. Extending the effective coverage of the Employees Social Security Scheme to foreign workers and transition measures. (i) Completing the transition towards full implementation. The Committee notes with interest the information provided by the Government as regards the measures taken to increase the registration of foreign workers with the Social Security Organization (SOCSO), aiming to achieve effective coverage under the Employees’ Social Security Scheme (ESSS), which include: (i) engagement sessions with foreign workers and employers to boost awareness on the scheme; (ii) engagement sessions via official social media platforms; (iii) induction sessions conducted by the National Institute of Occupational Safety and Health (NIOSH); (iv) organization of events with media coverage to increase registration; and (v) granting of amnesty periods for employers. The Committee takes due note that the registration of foreign workers with the SOCSO platform is a requirement for the approval and renewal of work permits, and that the lack of registration of foreign workers by employers may be penalized with fines, criminal prosecution, and imprisonment. Lastly, the Committee takes note that 1,568,143 foreign workers were registered in June 2023. In view of the above, the Committee requests the Government: (i) to provide further statistical data on the evolution of the registration of foreign workers since January 2019, indicating in particular the number of registrations per year; (ii) to indicate how many workers previously covered by the Workers’ Compensation Scheme (WCS) have been properly transferred to the Employees’ Social Security Scheme (ESSS); (iii) to indicate the number of employers penalized for lack of registration of foreign workers with the ESSS and the nature of the penalties applied; and (iv) indicate the number of employers who have benefited from an amnesty and the periods granted.

(ii) Addressing challenges to effective implementation. The Committee takes note of the information provided by the Government concerning the efforts made to identify the dependents of foreign workers in co-operation with the Embassies and High Commissions in Malaysia, social security agencies in the foreign workers’ countries of origin, in particular Indonesia, Nepal, Myanmar, and Pakistan, and with other relevant parties. The Committee also notes that, to overcome obstacles related to language barriers, the Government has continued to produce the official Employment Injury Scheme for Foreign Workers brochures in several languages (Bahasa Malaysia, English, Bengali, Nepali, Burmese, Tamil and Thai), and that translations into other languages are underway.

(iii) Removal of discriminatory practices in relation to workplace injury. The Committee notes that the Government indicates that only foreign workers who have a valid immigration permit and a formal employment contract are covered by the Employees’ Social Security Scheme (ESSS), and that a new section 69F of the Employment Act, 1955, has been introduced to address discrimination at the workplace, including the possibility of the application of fines. In this context, the Committee requests the Government to provide information regarding labour inspection reports related to discriminatory practices against foreign workers involving work-related injuries and, if any, sanctions applied in this respect.

(iv) Access of foreign workers to medical care in case of work-related injury. The Committee takes due note that foreign workers who are victims of work-related accidents are afforded appropriate medical care at SOCSO’s panel clinics or public clinics/hospitals and rehabilitation treatments, which continues to be provided until foreign workers return to their home countries. In this context, the Committee requests the Government to confirm whether the medical care provided under these conditions is also afforded to foreign workers who have suffered work-related accidents but have not yet been registered with the SOCSO.

(v) Ensuring the sustainability of work-related injury benefits under the ESSS, considering the extension to foreign workers. The Committee notes, that according to the report on the eleventh actuarial valuation of the Employees’ Social Security Scheme (ESSS), conducted in 2019 with the technical assistance of the ILO, the overall financial situation of the scheme was considered sound. The Committee also takes note that, according to this report, the gap between the current 1.25 per cent rate of contribution and the necessary cost rate has fluctuated in recent years, and that the inclusion of foreign workers may add a pressure on the overall cost. The Committee takes note that the report recommends the situation to be monitored closely and the impact of this group over the financial situation reassessed soon in a next actuarial valuation. In view of this, the Committee requests the Government to provide up to date information on the reassessment of the financial situation of the Employees’ Social Security Scheme (ESSS), considering the incorporation of foreign workers.

Article 2. Special arrangements with contributing countries to ensure the payment of compensation abroad. The Committee once again requests the Government to indicate whether documents relating to the hiring of foreign workers, such as model contracts of engagement, and standing operations procedures contain information on the rights, entitlements and conditions relating to employment injury protection, in the main languages of foreign workers. In addition, the Committee requests the Government to confirm that bilateral agreements in this regard have only been concluded with Indonesia, Pakistan, Nepal and Myanmar.

Article 4. Mutual assistance in the application of the Convention. The Committee takes note of the information concerning the continuation of the initiatives to ensure that employers comply and foreign workers are registered under the scheme to access the employment-injury related benefits, also in the context of the Decent Work Country Programme (DWCP) with the ILO.

Direct Request (CEACR) - adopted 2021, published 110th ILC session (2022)

Article 1 of the Convention. Extending the effective coverage of the Employees Social Security Scheme to foreign workers and transition measures. (i) Completing the transition towards full implementation. In its previous comment, the Committee noted, from the report of the Direct Contacts Missions (DCM) that took place in October 2019, that the implementation of the extension of coverage of foreign workers for work-related accidents and diseases compensation under the Employees’ Social Security Scheme (ESSS) and the transition from the Workers’ Compensation Scheme (WCS) were under way. The Committee noted, essentially, that all new foreign workers entering Malaysia with valid documents were being registered with the Social Security Organisation (SOCSO) for coverage under the ESSS since 1 January 2019, and that all foreign workers already in Malaysia were due to have transitioned from the WCS to the ESSS and registered with SOCSO, which administers the ESSS, by 31 December 2019.

The Committee takes note of the information provided by the Government in its report concerning the progress achieved and the means taken to increase the number of foreign workers registered under the ESSS. In this regard, the Government indicates that information sharing and awareness raising sessions have been held with stakeholders (i.e. employers, employers’ organization, workers’ organization, private employment agencies and Embassies/High Commissions) across Malaysia. The Government also reports the collaboration of the Immigration Department to identify, through data integration, the employers who have not registered their foreign workers with SOCSO and notify them of their obligation to do so. In addition, the registration of foreign workers with SOCSO has become one of the prerequisites for renewal of their work permit by the Immigration Department, since 1 July 2020. As a result, the Government indicates that, as of 14 August 2021, 1,868,770 foreign workers and 95,556 employers (employing foreign workers) had been registered with SOCSO.

The Committee takes due note of the measures taken to increase the registration of foreign workers with SOCSO, with a view to achieving effective coverage under the ESSS and requests the Government to continue providing information on progress made in this regard, and on the number of foreign workers registered with SOCSO, out of the total number of foreign workers in Malaysia. The Committee further requests the Government to provide information on the sanctions imposed on employers who fail to register their foreign workers with SOCSO after receiving notification of their obligation in this regard.

(ii) Addressing challenges to effective implementation. The Committee previously noted the challenges attached to the effective coverage of foreign workers for work-related injury and requested the Government to take all measures required to ensure that the legal framework for the protection of foreign workers in case of work-related injury translated into regular practice.

It also requested the Government to continue to work on the identification of dependants of workers who suffered work-related injuries, including those who were born in Malaysia following the entry on the territory of the foreign workers.

The Committee notes the measures reported by the Government to address this particular issue. First, the Government indicates that information on the foreign workers’ dependents must be provided at the time of registration with SOCSO, via the “Foreign Workers’ Dependants” Declaration Form. Second, the Government has engaged with relevant foreign Government entities to find means of identifying and contacting the dependants of foreign workers, through, for example, the Embassies/High Commissions in Malaysia and the social security agencies of migrant sending countries. Lastly, the Government reports that Memorandum of Collaboration (MOCs) have been concluded with the social security agencies of some of the main countries of origin of foreign workers and that the expansion of MOCs to other source countries is in progress, with a view to improve the benefit delivery process to dependants in the main source countries. The Committee requests the Government to continue providing information on any further measures taken with a view to ensuring that work-related injury compensation, in practice, is paid to the dependent children of deceased foreign workers, in Malaysia and abroad, to give full effect to Article 1 of the Convention.

Furthermore, the Committee previously noted that ensuring the ESSS effectiveness in covering foreign workers in practice was another important challenge, and that particular attention should be paid to small and medium enterprises and micro-enterprises, including in more remote geographical areas, who may require assistance in this regard. In this regard, the Committee noted that language was reported to often be a serious impediment for workers to understand the extent of their rights and obligations, and that efforts were needed to make the procedure more simple and leaner. On this last point, the Committee notes that the Government has undertaken the translation of the ‘Employment Injury Scheme for Foreign Workers’ brochures in the languages of the main countries of origin of foreign workers.

The Committee requests the Government to pursue its efforts to address the challenges linked to the operationalization and the effective implementation of the extension of the ESS Act provisions concerning work-related injury compensation to foreign workers and to provide information on further measures taken or envisaged in this regard.

(iii) Removal of discriminatory practices in relation to workplace injury. In its previous comment, the Committee noted that certain labour contractual practices might lead to a loss of work permit and thus a possible loss of the legal status necessary to be entitled to employment-related injury benefits. Some of the practices referred to included, notably: the change of employer, despite the work permit being issued for a specific employer; the abrupt contractual termination (including while benefits were ongoing); and the retention of documents necessary to claim work-related injury benefits. The Committee observed that the application of immigration laws and policies could lead, in some cases, to inequality of treatment for foreign workers as regards work-related injury protection, and hoped that the Government, in consultation with social partners would seek constructive solutions to eliminate such discrimination and ensure (i) the maintenance of the protection of foreign workers,(ii) the provision of medical care and (iii) the payment of benefits for work-related injury despite changes in their employment or immigration status.

In the absence of any progress reported by the Government on this issue, the Committee once again requests the Government to provide information on measures taken with a view to eliminating the discriminatory practices referred to above and ensuring the maintenance of work-related benefits provided to injured workers, regardless of their employment and immigration status.

In addition, the Committee once again requests the Government to consider extending the coverage of ESSS for work-related injury to all foreign workers who are nationals of any other Member which has ratified the Convention, irrespective of their status, with a view to giving full effect, in practice, to Article 1 of the Convention and requests the Government to provide information on any measures taken or envisaged in this regard.

(iv) Access of foreign workers to medical care in case of work-related injury. In its previous comment, the Committee requested the Government to provide information on the measures envisaged or taken with a view to ensuring that the required medical care was provided to foreign workers injured in the course of their work for as long as needed, irrespective of status, and that it was not impeded by the termination of their contract or the expiration of their work permit.

The Committee notes the indication by the Government that, under the ESSS, foreign workers who are still employed and suffer from employment injuries or occupational diseases may receive free medical treatment at SOCSO’s panel clinic or Government clinic / hospital, or submit a claim for the reimbursement of the costs of medical treatment to SOCSO.

The Committee requests the Government to indicate the measures in place to ensure that victims of work-related accidents or occupational diseases continue to be provided with the medical care and treatment they require for as long as needed, irrespective of changes in their employment or immigration status. In the absence of any provision to this effect, the Committee requests the Government to take the necessary measures to ensure that the entitlement of work-related injury victims to medical care is not impeded by the termination of their contract or the expiration of their work permit.

The Committee also requested the Government to provide information on measures taken or envisaged to ensure that foreign workers were not deterred from seeking necessary medical care, as well as to address practical barriers to effective access, including language and practice related to their conditions of employment. The Committee hopes that the ongoing translation of the ‘Employment Injury Scheme for Foreign Workers’ brochures in the language of migrant sending countries, referred to above, addresses this issue and requests the Government to provide information on any other measures taken to ensure the effective access of foreign workers to medical care in case of work-related injury, in application of Article 1 of the Convention.

(v) Ensuring the sustainability of work-related injury benefits under the ESSS, considering the extension to foreign workers. It its previous comment, the Committee expressed the hope that the Government would continue to carry out regular actuarial valuations with the view to assess the financial sustainability of work-related injury benefits under the ESSS. The Committee notes with interest that, according to the information provided by the Government, actuarial valuations are carried out regularly to assess the financial sustainability of the ESS scheme. The Committee further observes that an actuarial valuation of the employment-injury scheme and general invalidity scheme is currently being conducted, with the technical assistance of the ILO. The Committee requests the Government to provide information on the findings and recommendations of this actuarial valuation, when finalized, and a copy of it.

Article 2. Special arrangements with contributing countries to ensure the payment of compensation abroad. In its previous comment, the Committee noted the advances made by the Government towards the conclusion of arrangements with the member States from which foreign workers mainly originated to ensure the payment of employment injury benefits abroad, including the conclusion of one Memorandum of Cooperation (MoC) with Indonesia. With a view to strengthening the application in practice of the protection afforded to foreign workers under the ESS scheme, the Committee stressed the need for documents related to the hiring of foreign workers (model contracts of engagement, standing operations procedures, etc.) to be transparent, specific as to the process and conditions for entitlement to work-related injury benefits and to be drafted in a language that could be understood by foreign workers,

The Committee notes with interest that, in reply to its request for information on the conclusion of further agreements with other member States which have ratified the Convention, the Government indicates that 3 additional MoCs had been signed as of August 2021, with Nepal, Pakistan and Myanmar. The Government also indicates that the translation of the ‘Employment Injury Scheme For Foreign Workers’ brochures in the source country’s language is on-going, in collaboration with the social security agencies from the source country and Embassies/High Commissions. The Committee encourages the Government to pursue its efforts to conclude additional agreements with the countries of origin of foreign workers, and in particular with those who have ratified the Convention, and requests the Government to supply copies of the agreements concluded so far.

The Committee also requests the Government to supply a copy of the ‘Employment Injury Scheme For Foreign Workers’ and to indicate whether other documents relating to the hiring of foreign workers, such as model contracts of engagement, and standing operations procedures also contain information on the rights, entitlements and conditions relating to employment injury protection, in the main languages of foreign workers.

Finally, the Committee invited the Government to consider means of strengthening tripartite consultations and participation in the process leading to the conclusion of agreements with source countries, and requested the Government to provide information on measures taken to such effect. The Committee takes note of the Government’s indication that it continues to engage with MEF and MTUC through multiple platforms, some of which is institutionalized such as the National Labour Advisory Council, National OSH Council, National Wage Consultative Council. The Committee takes due note of this information.

Article 4. Mutual assistance in the application of the Convention. The Committee welcomes the statement by the Government of its continuous engagement with the ILO in the framework of Malaysia’s Decent Work Country Programme. Noting that social protection is among the priorities identified for the upcoming phase of implementation, the Committee hopes that the actions planned will aim, amongst others, at ensuring the application of the Convention in practice and requests the Government to provide information in this regard.

The Committee reminds the Government of the possibility to avail itself of the technical assistance of the ILO to further the application of the Convention.

[The Government is asked to reply in full to the present comments in 2023.]

Direct Request (CEACR) - adopted 2019, published 109th ILC session (2021)

The Committee notes the report of the direct contacts mission, which took place on 14–17 October 2019, following the request by the Conference Committee on the Application of Standards (CAS) in June 2018. The Committee expects that, in the context of a genuine, meaningful and effective tripartite dialogue the following issues, examined by the Direct Contacts Mission (DCM), will be addressed.

Article 1 of the Convention. Extending the effective coverage of the Employees Social Security Scheme to foreign workers and transition measures.

(i) Completing the transition towards full implementation

The Committee notes the information provided by the Government and the Social Security Organization (SOCSO), to the direct contacts mission, concerning the implementation of the extension of coverage for work-related accidents and diseases compensation to foreign workers. More particularly, it notes that the extension of the Employees’ Social Security Scheme (ESSS) to foreign workers is effective since 1 January 2019 and covers both work-related accidents and diseases. As regards the transition from the former scheme, the Committee notes that foreign workers already in Malaysia with valid Foreign Workers Compensation Scheme (FWCS) coverage have to be registered with SOCSO by their employers one day after the expiration of FWCS coverage, and at the latest at the end of the transition period which runs until 31 December 2019. New foreign workers entering Malaysia on or after 1 January 2019 must possess a valid working permit, passport and special pass issued by the Immigration Department of Malaysia, and once their status has been validated by the Immigration Department of Malaysia, they have to be registered with SOCSO by the employer for coverage under the ESSS to become effective. The Committee further notes from the direct contacts mission report that, as of 10 October 2019, 932,000 foreign workers out of a total number of more than 1.9 million were registered with SOCSO, and that over 44,000 employers with foreign workers were registered. The authorities were confident that the registration was well under way but acknowledged that many operational aspects of the scheme’s extension to foreign workers still needed to be tested. The Committee hopes that the Government will take the necessary measures to increase the registration of foreign workers by their employers with a view to achieving effective coverage under the ESSS, and requests the Government to keep it informed of progress made in this regard by providing statistical data on the number of foreign workers registered with SOCSO.

(ii) Addressing challenges to effective implementation

The Committee notes the indication in the direct contacts mission report that there are a number of challenges attached to the effective coverage of foreign workers for work-related injury. The major challenges reported are the operationalization of the extension of the ESSS coverage to foreign workers, the ESSS effectiveness in covering these workers in practice, and the sustainable financing of work-related injury benefits under the ESSS. As regards the scheme’s operationalization, taking into account the specificities and circumstances of foreign workers, the Committee notes that SOCSO recognized that challenges existed in relation to the nature of the accidents covered, since the vast majority were commuting accidents where more investigation was required. Identifying the occupational origin of diseases involved also a complex and lengthy process, which could unfold once foreign workers had already left Malaysia. SOCSO also indicated that identifying and liaising with the dependants of foreign workers, whether in Malaysia and abroad, was also challenging and that the most effective process still needed to be tested, as well as finding ways to ensure the payment of benefits abroad. The Committee welcomes in this regard the indication by SOCSO that additional fields for the identification of dependents had been inserted in the new Notification Form that foreign workers need to fill at the onset of their employment. As regards the effectiveness of the ESSS coverage for foreign workers, the Committee notes the Government’s indication to the direct contacts mission that authorities were willing to explore ways to improve their outreach to all employers to ensure that they registered all their foreign workers since coverage was conditional upon registration. The Committee notes in this regard the Malaysian Employer’s Federation’s (MEF) recommendation that particular attention be brought to small and medium enterprises and micro-enterprises, including in more remote geographical areas, which may need further assistance to fulfil their obligations. The Committee further notes that the direct contacts mission reported that language was often a serious impediment for workers to understand the extent of their rights and obligations as well as the need to make the procedure more simple and leaner. In this sense, the Committee welcomes the efforts of the Malaysian Trade Unions Congress (MTUC) and MEF to produce documents, guidelines and leaflets aiming at sensitizing and educating workers and employers in both the sources countries and Malaysia on the practicalities and legal framework surrounding the recruitment, placement, employment, protection, and repatriation of foreign workers. Lastly, the Committee notes the indication by SOCSO to the direct contacts mission, that employers should be more willing to report work-related injuries under the Employees’ Social Security Act, 1969 (ESSS), since employers do not incur a direct liability, as they did under the FWCS, and due to the high penalties they can face for non-compliance with their reporting obligations.

The Committee requests the Government to take all measures required to address the above-mentioned challenges and to ensure that the legal framework for the protection of foreign workers in case of work-related injury translates into regular practice. The Committee requests the Government to provide information on the measures taken for such purposes and on the progress achieved in the implementation of the extension of the ESSA provisions concerning work-related injury compensation to foreign workers. Furthermore, the Committee requests the Government to continue working on the identification of dependants of workers who suffer work-related injuries, including those who were born in Malaysia following the entry on the territory of the foreign workers, in order to give full effect to Article 1 of the Convention. In this regard, the Committee requests the Government to keep it informed of concrete measures taken with a view to ensure that work-related injury compensation, in practice, is paid to the dependent children of deceased foreign workers.

(iii) Removal of discriminatory practices in relation to workplace injury

The Committee notes from the direct contacts mission report that certain labour contractual practices might lead to a loss of work permit and thus a possible loss of the legal status necessary to be entitled to employment-related injury benefits. Some of the practices referred to include, notably: change of employer although the work permit was issued for a specific employer; abrupt contractual termination (including while benefits were ongoing); and the retention of documents necessary to claim work-related injury benefits, etc. In this regard, the Committee notes the serious concerns expressed by the MTUC as to the silence of laws and policies when it came to guaranteeing the maintenance of the payment of benefits, medical treatment and protection of foreign workers under the ESSA when their work permit expired or when their employment was terminated. The Committee notes that the Government indicated to the direct contacts mission that in cases which amounted to unfair labour practices, foreign workers could lodge a complaint before the Ministry of Human Resources, which would refer it to the competent authorities for it to be entertained. The Committee observes that the application of immigration laws and policies may lead, in some cases, to inequality of treatment for foreign workers as regards to work-related injury protection, and hopes that the Government, in consultation with social partners will seek constructive solutions to eliminate such discrimination and ensure the maintenance of the protection of foreign workers, provision of medical care and payment of benefits for work-related injury despite changes in their employment or immigration status. The Committee requests the Government to provide information on measures taken in this regard. The Committee also requests the Government to consider extending the coverage of ESSS for work-related injury to all foreign workers nationals of any other Member which has ratified the Convention, irrespective of their status, with a view to giving full effect, in practice, to Article 1 of the Convention and to keep it informed of any measures taken or envisaged in this regard.

(iv) Access of foreign workers to medical care in case of work-related injury

The Committee notes with interest from the direct contacts mission report that coverage of foreign workers under ESSS has removed many of the obstacles they faced under the FCWS scheme with regard to access to medical care and treatment such as geographical and financial access, although access in remote areas is expected to remain challenging. The Committee notes, more particularly that, once a foreign worker is registered to SOCSO, he/she has access on an equal footing with nationals to all public hospitals and SOCSO clinics on the territory. The Committee further notes from the information provided to the direct contacts mission that, although the costs of medical services for foreign workers continue to be charged at a different rate, SOCSO reimburses their totality, up to the costs charged in public medical institutions. The Committee notes the practical question highlighted by the MTUC and reported to the direct contacts mission, concerning the continuation of care or treatment when the work permit has expired, as well as the possibility of illicit practices that impede effective access to medical care for foreign workers. Such practices range from the withholding of documents necessary to claim for benefits, the refusal to allow workers to take sick leave, the deduction of the costs of medical care from workers’ wages by employers’, to avoiding using medical facilities because of the risk of being reported in case of undocumented workers. The Committee further notes from the information provided by the authorities to the direct contacts mission, that undocumented foreign workers have access to medical facilities in case of employment-related injury, and that there were currently more than 31.5 million Malaysian ringgit (MYR) of unpaid bills for medical services provided to documented and undocumented foreign workers. The Committee requests the Government to provide information on the measures envisaged or taken with a view to ensuring that the required medical care is provided to foreign workers injured in the course of their work for as long as needed, irrespective of status, and that it is not impeded by the termination of their contract or the expiration of their work permit, so as to give full effect to the Convention. The Committee also requests the Government to provide information on measures taken or envisaged to ensure that foreign workers are not deterred to seek necessary medical care, as well as to address practical barriers to effective access, including language and practice related to their conditions of employment.

(v) Ensuring the sustainability of work-related injury benefits under the ESSS considering the extension to foreign workers

The Committee notes from the information provided by SOCSO to the direct contacts mission that the extension of work-related injury benefits under the ESSS to foreign workers was not accompanied by a change in the contribution rate for employers, which is the 1.25 per cent of the insured monthly wages, as set out in the Second Category Contribution Schedule for the ESSS. It further notes that employers are the only contributors for work-related injury. The Committee hopes that the Government will continue to carry out regular actuarial valuations with the view to assess the financial sustainability of work-related injury benefits under the ESSS. The Committee welcomes that an actuarial valuation is planned in the near future, taking into account the extension of such benefits to foreign workers, and invites the Government to keep it informed of its findings and recommendations.

Article 2. Special arrangements with contributing countries to ensure the payment of compensation abroad. The Committee notes the information provided by the Government to the direct contacts mission, according to which foreign workers in Malaysia came from 15 source countries at least. The Committee notes with interest that up to October 2019, the Government visited nine source countries and signed one Memorandum of Cooperation with Indonesia to ensure the payment of benefits abroad. The Committee notes, however, the observations made by the MTUC and MEF to the direct contacts mission that they regretted the lack of information shared by the authorities in this regard and their non-involvement in the process. They believed that their long experience with their counterparts in other countries, including source countries, could be useful to move towards good and efficient practices. The Committee stresses the need for special arrangements and documents related to the hiring of foreign workers (model contracts of engagement, standing operations procedures, etc.) to be transparent and respect international labour standards and invites the Government to consider specifying the process and conditions to be entitled to work-related injury benefits in these documents, in a language that can be understood by foreign workers, with a view to strengthening the application in practice of the protection afforded to them under the ESSS. The Committee requests the Government to provide information on measures taken to such effect as well as regarding further agreements concluded with other member States which have ratified the Convention to ensure the payment of benefits abroad, together with the copies of such agreements. The Committee further invites the Government to consider means of strengthening tripartite consultations and participation in the above-mentioned process, and requests the Government to provide information on measures taken to such effect.

Article 4. Mutual assistance in the application of the Convention. The Committee notes with interest that the International Labour Office supports Malaysia in its implementation of Sustainable Development Goal (SDG) 8 through its Decent Work Country Programme (DWCP). The Committee also welcomes that the Government expressed interest to the direct contacts mission to benefit from peer-to-peer exchanges which could be facilitated by the ILO. The Committee considers that the Government and social partners could gain immensely from exchanges of information, experiences and expertise, among themselves, with their peers and with the ILO to further the application of the Convention and reminds the Government of the possibility to avail itself of the technical assistance of the ILO in this regard.

Observation (CEACR) - adopted 2019, published 109th ILC session (2021)

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 107th Session, June 2018)

In its previous comment, the Committee hoped that the Government would take advantage of the direct contacts mission requested by the Committee on the Application of Standards (CAS) with a view to implementing its conclusions as well as its long-standing requests, so as to guarantee to foreign workers the right to equality of treatment with national workers in case of employment injury, and requested a reply from the Government on the issue raised in its comments. The Committee welcomes that the direct contacts mission took place from 14 to 17 October 2019, and takes note of the findings and recommendations contained in its report.

The Committee recalls that the CAS, in June 2018, urged the Government to: (i) take steps to develop and communicate its policy for governing the recruitment and treatment of migrant workers; (ii) take immediate steps to conclude its work on the means for reinstating the equality of treatment of migrant workers, in particular by extending the coverage of the Employees’ Social Security Scheme to migrant workers in a form that is effective; (iii) engage in genuine consultations with employers’ and workers’ organizations to develop laws and regulations that ensure the removal of discriminatory practices between migrant and national workers, in particular in relation to workplace injury; (iv) adopt special arrangements with other ratifying member States to overcome the administrative difficulties of monitoring the payment of compensation abroad; and (v) take necessary legal and practical measures to ensure that migrant workers have access to medical care in the case of workplace injury. The Committee notes with satisfaction that the coverage of accident compensation for foreign workers under the Employees’ Social Security Act, 1969 (ESSA) is being implemented, as indicated by the Government in its report. In this regard, the Committee notes that, as of 1 January 2019, foreign workers’ protection in case of work-related injury has moved from the scope of the Foreign Workers’ Compensation Scheme under the Workmen’s Compensation (Foreign Workers’ Compensation Scheme) (Insurance) Order, 2005, to the Employees’ Social Security Scheme (ESSS), administered under the Employees’ Social Security Act, 1969 (Act 4) (ESSA, 1969). The Committee observes more particularly that, under this Act, foreign workers who suffer a work-related injury are now entitled to periodical payment for temporary disability and permanent disablement as a result of an employment injury, medical treatment, and constant attendance care for the workers with disabilities. Furthermore, the dependants of an insured foreign worker who dies as a result of a work-related injury are entitled to periodical payments for loss of support; and funeral benefits (sections 15 and 57, ESSA, 1969). The Committee further observes that these benefits are provided in the same manner and amount in respect of foreign workers and national workers, with the exception of the funeral grant, which is higher for foreign workers. The Committee further notes, from the direct contacts mission report, the importance that the authorities and social partners attach to tripartite consultation and social dialogue in this process. The Committee notes however the view of the Malaysian Trade Union Congress (MTUC) and the Malaysian Employers’ Federation (MEF) that the effectiveness of consultative and participatory processes could be improved to better benefit from their insights and support in the implementation of the legislative amendments, the adoption of a work plan, and effective follow-up.

In light of the above, the Committee requests the Government to ensure, through the appropriate mechanism, genuine, effective and meaningful social dialogue and a participatory process involving social partners in the implementation of the above-mentioned provisions, and to provide information on any measures taken to this effect. The Committee trusts that this dialogue will be framed by the issues addressed in the direct request. The Committee reminds the Government of the possibility to avail itself of the technical assistance of the Office in this regard.

The Committee is raising other matters in a request addressed directly to the Government.

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

The Committee notes the observations made by the International Trade Union Confederation (ITUC) received on 19 September 2018. The Committee requests the Government to provide its comments in this respect.

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 107th Session, May–June 2018)

The Committee notes the discussion that took place in the Conference Committee on the Application of Standards (CAS) in June 2018 concerning the application of the Convention. The Committee recalls that the discussion in the CAS has been based upon long-standing issues raised and comments made by the Committee, urging the Government to take the necessary measures with a view to re-establishing the principle of equal treatment between foreign and national workers in case of employment injury. The Committee observes that the CAS, in its conclusions, welcomed the Government’s stated commitment to ensuring the Convention’s requirement for equal treatment of migrant workers and national workers. The Committee observes that the CAS urged the Government to: (i) take steps to develop and communicate its policy for governing the recruitment and treatment of migrant workers; (ii) take immediate steps to conclude its work on the means for reinstating the equality of treatment of migrant workers, in particular by extending the coverage of the Employees’ Social Security Scheme (ESS) to migrant workers in a form that is effective; (iii) engage in genuine consultations with employers’ and workers’ organizations to develop laws and regulations that ensure the removal of discriminatory practices between migrant and national workers, in particular in relation to workplace injury; (iv) adopt special arrangements with other ratifying member States to overcome the administrative difficulties of monitoring the payment of compensation abroad; and (v) take necessary legal and practical measures to ensure that migrant workers have access to medical care in the case of workplace injury. The CAS called on the Government to accept an ILO direct contacts mission with a view to implementing these recommendations and to develop mechanisms for overcoming the practical issues affecting the implementation of the domestic social security scheme to migrant workers. The Committee recalls that, in its previous comments, it has repeatedly drawn the attention of the Government to the fact that, since 1993, the national legislation provided for foreign workers employed in Malaysia for up to five years, to be transferred from the ESS, which provides for periodical payments to victims of industrial accidents, to the Workmen’s Compensation Scheme (WCS), which guarantees only a lump-sum payment of a significantly lower amount. The Committee notes that in its reply the Government states that it is taking serious efforts to shift the protection of foreign workers from the WCS to the ESS to adhere to the principle of equal treatment for workers. The Committee notes the Government states it has agreed to extend the ESS, which will be under the Social Security Organization (SOCSO), to foreign workers. To this purpose, a transition period is envisaged to ensure the smooth extension, in order to to establish implementation mechanisms, databases, roadmaps and engagement sessions with stakeholders and social partners. The Committee notes the Government’s indication, that the transition period is planned to last, at a maximum, for three years, due to three main factors, which are the following: (i) the SOCSO has just been recently tasked with the implementation of Employment Insurance System, which needs certain time for the funds to be at a sustainable stage, and to ensure the smooth operation of administrative matters related to Employment Insurance System. In addition, the existing Social Security Act 1969 will need to undergo certain amendments in its provision; (ii) existing contractual obligation with the insurance panels and system provider of the e-compensation scheme; and (iii) providing employers with ample time to adjust to the changes that will occur with the shifting from the WCS to the ESS. The Committee welcomes the statement that the Government stands ready to take immediate action, including further deliberation and engagement with social partners from trade unions and employers’ federation. The Committee welcomes the intention of the Government to seek technical assistance from the ILO. The Committee welcomes the Government has accepted the direct contacts mission which will take place in 2019. The Committee firmly hopes that the Government will take advantage of the direct contacts mission with a view to implementing the conclusions by the CAS as well as its long-standing requests, so as to guarantee to foreign workers the fundamental right to equality of treatment with national workers in case of employment injury.

[The Government is asked to reply in full to the present comments in 2019.]

Observation (CEACR) - adopted 2017, published 107th ILC session (2018)

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 106th Session, June 2017)

The Committee notes with concern that the Government’s detailed report has not been received in spite of an express request to this effect and the discussion on the application of the Convention in Peninsular Malaysia and Sarawak by the Committee on the Application of Standards (CAS) of the International Labour Conference (ILC) in June 2017. The Committee recalls that the CAS discussion was based on the long-standing comments made by the Committee of Experts urging the Government to take the necessary measures with a view to re establishing, both in law and in practice, the principle of equal treatment between foreign and national workers in case of employment injury. In these successive comments, the Committee has continuously recalled that, since 1 April 1993, the national legislation provided for foreign workers, employed in Malaysia for up to five years, to be transferred 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. The Committee also recalls that, in June 2011, the CAS had already 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 labour-supplying countries in accordance with Articles 1(2) and 4 of the Convention. In reply, the Government had indicated that a technical committee within the Ministry of Human Resources, including all stakeholders, was considering the various options with a view to bringing the national legislation in line with the requirements of the Convention.

The Committee notes that, at the 2017 session of the ILC, the CAS once again called upon the Government to take immediate, pragmatic and effective steps to ensure that the Convention’s requirement for equal treatment of migrant workers and national workers was met and to expedite its efforts to this effect, as the need for real progress is becoming increasingly urgent. Specifically, the CAS called upon the Government to, without delay: (i) take steps to develop and communicate its policy for governing the recruitment and treatment of migrant workers; (ii) take immediate steps to conclude its work on the means of reinstating the equality of treatment of migrant workers, in particular by extending the coverage of the ESS to migrant workers in a form that is effective; (iii) work with employers’ and workers’ organizations to develop laws and regulations that ensure the removal of discriminatory practices between migrant and national workers, in particular in relation to workplace injury; (iv) adopt special arrangements with other ratifying member States to overcome the administrative difficulties of monitoring the payment of compensation abroad; (v) take necessary legal and practical measures to ensure that migrant workers have access to medical care in the case of workplace injury without fear of arrest and retaliation; and (vi) avail itself of the technical assistance of the ILO with a view to implementing these recommendations and to develop mechanisms for overcoming the practical issues affecting implementation of the domestic social security scheme to migrant workers.

In view of the urgency of the persistent situation where foreign workers employed in Malaysia for up to five years, who become victims of industrial injuries, are denied their fundamental right to equality of treatment with national workers and thus deprived of, inter alia, lifelong pensions in case of permanent disability, the Committee fully endorses the CAS conclusions and urges the Government to conform with its international obligations by taking the required measures in an effective and expeditious manner.

Observation (CEACR) - adopted 2016, published 106th ILC session (2017)

Article 1(1) of the Convention. Equal treatment of foreign workers. Since 1996 the Committee has been requesting that foreign workers be transferred back to the social security scheme of nationals, as the workers’ compensation scheme, which is now applicable to them, provides for significantly lower compensation payments in the form of lump sums and not of a periodical payment as guaranteed by the social security system. The Government stated in its last report its willingness to extend the social security scheme for national workers to foreigners and informed in its 2016 report that it recently held a technical consultation with the ILO on these issues with a view to initiating internal discussions on the way forward. The Committee recalls that the current situation, whereby foreign employees are not entitled to equal treatment with national workers in respect of employment injury compensation persist since 1993. The ILC Committee on the Application of Standards has at several occasions also asked the Government to comply with the obligations assumed under the Convention and put an end to the discriminatory treatment of foreign workers as regards employment injury compensation. The Committee strongly hopes that, with the technical cooperation of the ILO, the Government will be able to report progress on the measures taken in this respect.

[The Government is asked to supply full particulars to the Conference at its 106th Session and to send a detailed report in 2017.]

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

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.

Observation (CEACR) - adopted 2014, published 104th ILC session (2015)

The Committee notes with regret that the Government’s report has not been received. It must therefore repeat its previous comments.

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 100th Session, June 2011)

Article 1(1) of the Convention. Equal treatment of foreign workers. The Committee recalls that since 1 April 1993, the Malaysian social security system has contained inequalities of treatment that run counter to the provisions of the Convention. This inequality is due to national legislation that 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 case of Malaysia has been discussed by the Conference Committee on the Application of Standards. Most recently, 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 August 2011, the Government indicated that a technical Committee within the Ministry of Human Resources including all stakeholders will pursue the formulation of the right mechanism and system to administer this issue 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.

Replying to the Committee’s 2011 observation, the Government indicates in its latest report that it is currently in the midst of conducting the actuarial study on the three options under consideration and that upon completion of the study, continuous engagement with the stakeholders will be carried out before the most suitable option is determined. The Committee hopes that the study under preparation will be finalized shortly, that the choices made by the Government in consultation with all stakeholders will fully take into account the requirements of the Convention, that a new approach consistent with the Convention will be implemented expeditiously and that it will report thereon.

The Committee hopes that the Government will make every effort to take the necessary action in the near future.

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

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 100th Session, June 2011)

The Committee notes that the Government’s report has not been received. It must therefore repeat its previous observation, which read as follows:

Article 1(1) of the Convention. Equal treatment of foreign workers. The Committee recalls that since 1 April 1993, the Malaysian social security system has contained inequalities of treatment that run counter to the provisions of the Convention. This inequality is due to national legislation that 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 case of Malaysia has been discussed by the Conference Committee on the Application of Standards. Most recently, 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 August 2011, the Government indicated that a technical Committee within the Ministry of Human Resources including all stakeholders will pursue the formulation of the right mechanism and system to administer this issue 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.

Replying to the Committee’s 2011 observation, the Government indicates in its latest report that it is currently in the midst of conducting the actuarial study on the three options under consideration and that upon completion of the study, continuous engagement with the stakeholders will be carried out before the most suitable option is determined. The Committee hopes that the study under preparation will be finalized shortly, that the choices made by the Government in consultation with all stakeholders will fully take into account the requirements of the Convention, that a new approach consistent with the Convention will be implemented expeditiously and that it will report thereon.

The Committee hopes that the Government will make every effort to take the necessary action in the near future.

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

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 100th Session, June 2011)

Article 1(1) of the Convention. Equal treatment of foreign workers. The Committee recalls that since 1 April 1993, the Malaysian social security system has contained inequalities of treatment that run counter to the provisions of the Convention. This inequality is due to national legislation that 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 case of Malaysia has been discussed by the Conference Committee on the Application of Standards. Most recently, 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 August 2011, the Government indicated that a technical Committee within the Ministry of Human Resources including all stakeholders will pursue the formulation of the right mechanism and system to administer this issue 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.

Replying to the Committee’s 2011 Observation, the Government indicates in its latest report that it is currently in the midst of conducting the actuarial study on the three options under consideration and that upon completion of the study, continuous engagement with the stakeholders will be carried out before the most suitable option is determined. The Committee hopes that the study under preparation will be finalized shortly, that the choices made by the Government in consultation with all stakeholders will fully take into account the requirements of the Convention, that a new approach consistent with the Convention will be implemented expeditiously and that it will report thereon.

[The Government is asked to reply in detail to the present comments in 2013.]

Observation (CEACR) - adopted 2011, published 101st ILC session (2012)

Follow-up to the conclusions of the Committee on the Application of Standards (International Labour Conference, 100th Session, June 2011)

Article 1(1) of the Convention. Equal treatment of foreign workers. The Committee recalls that since 1 April 1993, the Malaysian social security system has contained inequalities of treatment that run counter to the provisions of the Convention. This inequality is due to national legislation that 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 case of Malaysia has been discussed by the Conference Committee on the Application of Standards. Most recently, 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 its report received in August 2011, the Government replied that it is considering bringing its national law and practice into conformity with Article 1 of the Convention. A technical Committee including all stakeholders will be formed under the Ministry of Human Resources to pursue the formulation of the right mechanism and system to administer this issue 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. Upon completion of the study by the technical Committee, the Government will consider engaging technical assistance of the ILO to facilitate bringing the national legislation in compliance with the principle of equality of treatment between nationals and non-nationals.

The Committee notes that an ILO mission visiting the country from 3 to 7 October 2011, was briefed on action being taken to rectify the situation. The Committee also notes the comparative tables supplied by the Government with its report, listing in detail the characteristics of both the WCS and the ESS with respect to qualifying conditions, conditions for the granting of benefits and the calculation formulas used to compute benefits. It notes that there are considerable differences in the levels of benefits granted by the WCS and ESS, as illustrated by the fact that the WCS does not grant invalidity pensions in case of permanent total invalidity and that the WCS benefit in case of permanent partial disability represents only 6.5 per cent of the ESS benefit. The Committee hopes that in determining the most suitable option among those mentioned above, the Government will act with the best interests of migrant workers in mind and will treat them on an equal footing with Malaysian workers. The Committee trusts that the Government will accomplish this task in the very near future so as to be able to report success in its next report to be supplied by 1 September 2012.

[The Government is asked to reply in detail to the present comments in 2012.]

Observation (CEACR) - adopted 2010, published 100th ILC session (2011)

For many years, the Committee of Experts as well as the Conference Committee on the Application of Standards, have been drawing the Government’s attention to the fact that the national legislation and practice need to be brought in compliance with the principle of equality of treatment between nationals and non-nationals with regard to compensation for industrial accidents, in conformity with Article 1(1) of the Convention. In 1993, foreign workers were transferred from the Employees’ Social Security Scheme (ESS) which provides for periodical payments to victims of industrial accidents and their dependants, to the Workmen’s Compensation Scheme (WCS), which only guarantees the payment of a lump sum. In 1997, the Conference Committee concluded that the level of benefits granted under the ESS was significantly higher than that guaranteed by the WCS and insisted that foreign workers benefit from the same protection as Malaysian nationals. An ILO high-level technical advisory mission visited the country in May 1998 to examine ways of giving effect to the conclusions of the Conference Committee. As a result, the Government stated in its 1998 report that it was planning to review the coverage of foreign workers under the ESS and to propose amendments to the Social Security Act of 1969 in this regard. Since then, however, no steps were undertaken to bring the law and practice into conformity with the Convention.

In its previous observation of 2008, the Committee noted that, taking into account the large number of foreign workers concerned and their high accident rate, the situation called for special efforts from the Government of Malaysia to overcome administrative and practical difficulties, that were impeding equal treatment of foreign workers who suffer industrial accidents. The Committee invited the Government to avail itself of the technical assistance of the Office in this respect.  In particular, the Government was asked to demonstrate the actuarial equivalence of the lump sum paid under the WCS to foreign workers in cases of temporary or permanent incapacity, invalidity or survivors’ rights to the amount of the periodical payments granted under the ESS to Malaysian workers in similar cases. With respect to the difficulties mentioned by the Government concerning the payment of compensation abroad, the Committee pointed out that these difficulties could be overcome by way of special arrangements between the Members concerned in line with Article 1(2) of the Convention. Such arrangements should be concluded in the first place with the main countries supplying workforce to Malaysia. Among the 1.9 million foreign workers currently employed in Malaysia, more than 1.5 million come from Indonesia, followed by India, Myanmar, Bangladesh, the Philippines, Thailand, Pakistan and China. All of these countries are parties to the Convention.

In its response to the Committee’s observation, the Government limited itself to reiterating its position that the WCS is a suitable and practical approach for managing compensation of industrial accidents for foreign workers in Malaysia, and expressed the opinion that the system is reliable and suitable to the needs of the workforce in Malaysia.

The Committee regrets to note that the Government, in its reply received on 30 July 2010, sees no need to modify the national law and practice to bring it into conformity with the Convention or to resort to the technical assistance which the international community is willing to provide for this purpose. In such a situation, it is the obligation of the Committee to advise the Government that it is breaching its obligations under international law by not observing the principle of equality of treatment between nationals of any other member State which has ratified the Convention and its own nationals. Such violation of the Convention by the Government of Malaysia undermines the system of automatic reciprocity in granting equality of treatment to nationals of ratifying States that the Convention establishes between them. Given the gravity of the situation, the Committee requests the Government to reconsider its position.

[The Government is asked to supply full particulars to the Conference at its 100th Session and to report in detail in 2011.]

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

For many years, this Committee as well as the Conference Committee on the Application of Standards have been drawing the Government’s attention to the fact that the national legislation and practice need to be brought in full compliance with the principle of equality of treatment between nationals and non-nationals with regard to compensation for industrial accidents, in conformity with Article 1, paragraph 1, of the Convention. In 1993, foreign workers were transferred from the Employees’ Social Security Scheme (ESS) which provides for periodical payments to victims of industrial accidents and their dependants to the Workmen’s Compensation Scheme (WCS), which only guarantees the payment of a lump sum. In 1997, the Conference Committee concluded that the level of benefits granted under the ESS was significantly higher than that guaranteed by the WCS and insisted that foreign workers benefit from the same protection as Malaysian nationals. An ILO high-level technical advisory mission visited the country in May 1998 to examine ways of giving effect to the conclusions of the Conference Committee. As a result, the Government stated in its 1998 report that it was planning to review the coverage of foreign workers under the ESS and to propose amendments to the Social Security Act of 1969 in this regard. Since then, however, no information was provided by the Government with regard to the intended amendments.

The Committee recalls that, while foreign nationals residing in Malaysia on a permanent basis are treated equally compared to national workers and covered by the ESS, those working in the country for a period of up to five years are covered only by the WCS. In its latest report, the Government stated that the policy to separate foreign and local workers should not be viewed as a form of discrimination against foreign nationals working in Malaysia. Foreign workers were transferred from the ESS to the WCS when it was found that the system had to operate under great administrative and operational problems due to the extreme practical difficulties to obtain accurate vital information about the beneficiaries residing abroad. The decision to place foreign workers under the WCS was motivated by the desire to protect such workers by a scheme that would best serve their interests. It was accompanied by an increase of the quantum of lump sum granted as well as, since 1996, by an extension of the insurance coverage also to accidents occurring outside working hours. A new extension of the WCS to foreign maids in order to provide them with greater protection was also currently being examined. The Government therefore considered that the assumption that the level of benefits under the WCS is substantially lower than that provided under the ESS should no longer be entertained. It indicated that an in-depth study on the proposal to cover foreign workers under the ESS Act of 1969 brought to light several impediments in implementing the proposal mainly related to administrative considerations such as the control and monitoring of long-term periodical payments. Malaysia’s experience reveals, according to the Government, that equal treatment through placing local and foreign workers under the same scheme is not only impossible to implement but also unfavourable to foreign workers themselves.

The Committee takes due note of the Government’s explanations that in separating national and foreign workers into different schemes offering differential treatment it has acted in the best interests of foreign workers in the situation where administrative difficulties precluded them from the provision of long-term periodical payments. The Committee however wishes to point out that the objective of the Convention consists precisely in helping ratifying States to deal with such kind of situations promoting solutions based on the principle of equality and not on discrimination. Depriving foreign workers of the right to equal treatment invoking their best interest would twist the meaning of the Convention to the extent that it does not make sense anymore and serves no useful purpose for other ratifying States. Although the Government affirms that the compensation payable under the WCS is not inferior to that paid under the ESS, it does not give any actuarial data comparing the benefits granted under these two schemes, which would demonstrate that the lump sums paid under the WCS correspond in each particular case (temporary or permanent incapacity, invalidity or survivors’ rights) to the actuarial equivalent of the periodical payments granted under the ESS. The Committee is therefore bound to observe that the current situation is not substantially different from the situation in 1997 when the national law and practice were found to be in breach of the principle of equal treatment guaranteed by the Convention. With respect to the difficulties mentioned by the Government concerning the payment of compensation abroad, the Committee wishes to stress that measures in this respect need to be taken by way of special arrangements between the Members concerned in line with the second paragraph of Article 1 of the Convention. Such arrangements are even more important in cases where the main countries supplying workforce to Malaysia are also parties to the Convention: among the 1.9 million foreign workers currently employed in Malaysia, more than 1.5 million come from the following countries: Indonesia (1.17 million), followed by India, Myanmar, Bangladesh, the Philippines, Thailand, Pakistan and China. Taking into account the large number of foreign workers concerned and the high accident rate among them, the Committee considers that the situation calls for special efforts from the Government of Malaysia to overcome administrative and practical difficulties which impede equal treatment of foreign workers who suffer industrial accidents. The Committee therefore asks the Government to report the steps undertaken to bring national law and practice in conformity with the Convention and wishes to recall the possibility for the Government to avail itself of the technical assistance of the Office in this respect.

[The Government is asked to reply in detail to the present comments in 2010.]

Observation (CEACR) - adopted 2006, published 96th ILC session (2007)

In its previous comments, the Committee requested the Government to provide information on the measures taken to ensure that foreign workers (and their dependants) who are nationals of countries that have ratified the Convention receive the same compensation as that granted to national workers in the event of occupational accidents. The Government indicates in its last report that, while it understands the Committee’s concern, it is of the view that the current arrangement of separate workers’ compensation systems for local and foreign workers appears to function in a satisfactory manner and that the compensation payable to foreign workers is not inferior to that payable to Malaysian workers. The Government adds that a policy decision needs to be taken before the issue of non-conformity with the Convention is addressed.

The Committee regrets to note that the Government has not taken any measures to bring the national legislation into conformity with the Convention. It reiterates that the national legislation, which establishes, in case of employment injury, the principle of differing treatment between national and foreign workers, is not consistent with the Convention. In Malaysia, in the event of an employment accident, benefits are provided through two distinct national laws. By virtue of the Employee’s Social Security Act, 1969, national workers are entitled to a pension, whereas according to the Workmen’s Compensation Act, 1952, foreign workers are entitled to a lump-sum payment. Furthermore, the conditions governing affiliation to insurance against employment accidents differ between national workers (compulsory insurance when earnings are below RM3,000) and foreign workers (exclusion from compulsory insurance of non-manual workers earning over RM500).

The Committee is therefore bound once again to recall that, by virtue of Article 1, paragraphs 1 and 2, of the Convention, each Member which ratifies the Convention undertakes to grant, without any condition as to residence, to the nationals of any other Member which has ratified the Convention who suffer employment injury in its territory, or to their dependants, the same treatment as that granted to its own nationals in respect of workers’ compensation. The Committee considers that, since the compensation payable to foreign workers under the Workmen’s Compensation Act is not considered to be inferior to that payable to national workers, all workers, whether they are nationals of Malaysia or foreign nationals, could be allowed to decide which of the two systems they prefer for their own personal coverage. Such a measure would be consistent with the fundamental principle established by the Convention, according to which States parties must implement the principle of equal treatment in respect of workmen’s compensation between their own nationals and foreign workers (nationals of any other Member which has ratified the Convention), and have to ensure that it is possible for foreign workers or their dependants who suffer employment injury and return to their countries of origin to receive the payments abroad under special arrangements. The Committee accordingly expresses the firm hope that the Government will re-examine the matter and provide information in its next report on the measures taken or envisaged to bring the national law and regulations into conformity with the Convention. It also requests the Government to provide detailed statistical information on the number and nationalities of foreign workers employed in the country.

[The Government is asked to reply in detail to the present comments in 2007.]

Observation (CEACR) - adopted 2003, published 92nd ILC session (2004)

In its previous comments, the Committee requested the Government to provide information on the measures taken to ensure that foreign workers (and their dependants) who are nationals of countries that have ratified the Convention receive the same compensation as that granted to national workers in the event of occupational accidents. The Government indicates in its report that studies reveal that the Workmen’s Compensation Scheme has features that are superior and not available under the social security schemes. An example of such coverage is the provision for transport cost for injured workers to be sent back to their country of origin as well as transport costs for the body of a worker who dies. The lump sum paid to injured workers or to the dependants of workers who die is also significantly higher than the accumulated average pension paid under the social security schemes to the national workers. After comparing the two schemes, the Government has concluded that in general terms there is equity in the protection provided. Moreover, the Workmen’s Compensation Scheme is more relevant to the requirements of foreign workers. The Committee pointed out in its previous observations that in some other respects the employees’ social security scheme was superior to the Workmen’s Compensation Scheme in the benefits granted. The Committee must consequently remind the Government that Article 1, paragraphs 1 and 2, of the Convention requires each Member which ratifies the Convention to grant, without any condition as to residence, to the nationals of any other Member which has ratified the Convention who have suffered employment injury on its territory, or their dependants, the same treatment as that granted to its own nationals in respect of workers’ compensation. In these circumstances, the Committee considers that national laws which establish, in the event of employment injury, the principle of differing treatment between foreign workers - who receive a lump sum - and nationals - who receive a pension - are not consistent with this provision of the Convention. Under the Convention, States parties must undertake to establish the principle of equal treatment in respect of workmen’s compensation between their own nationals and foreign workers, and must enable foreign workers or their dependants who have returned to their countries of origin to receive the payments abroad under special arrangements. The Committee accordingly hopes that the Government will be able to provide information in its next report on measures taken or envisaged to bring national laws and regulations into conformity with the Convention.

Observation (CEACR) - adopted 2002, published 91st ILC session (2003)

The Committee notes with regret that the Government’s report does not contain a reply to its previous comments. It hopes that a report will be received for examination at its next session and that it will contain full particulars on the following points.

Article 1, paragraph 1, of the Convention. In its previous comments, the Committee drew the Government’s attention to the fact that, since 1 April 1993, the coverage of foreign workers employed in the private sector in terms of compensation for employment accidents had been transferred from the Employees’ Social Security Scheme (governed by the Employees’ Social Security Act, 1969) to the Workmen’s Compensation Scheme (governed by the Workmen’s Compensation Act 1952 and its implementing legislation). A review of these two schemes shows that the benefits provided are of a different nature and that, in general terms, the Employees’ Social Security Scheme offers a higher level of protection. For example, under the Employees’ Social Security Scheme, a permanently injured worker is entitled to a pension (periodical payments corresponding to a certain percentage of the previous wage), whereas under the Workmen’s Compensation Scheme a permanently injured worker is entitled to a lump-sum payment. The same applies to the survivors’ benefits due in the event of the death of the worker as a result of an employment accident. The Committee recalls that Article 1, paragraph 1, provides that each Member which ratifies the Convention undertakes to grant to the nationals of any other Member which has ratified the Convention, or to their dependants, the same treatment in respect of compensation for employment accidents as it grants to its own nationals. In these conditions, the transfer of foreign workers employed in the private sector from the Employees’ Social Security Scheme to the Workmen’s Compensation Scheme is not in conformity with this provision of the Convention. The Committee hopes that the Government will be in a position to provide information in its next report on the measures taken to guarantee to foreign workers the same compensation that is granted to national workers in case of employment injury. In this respect, the Committee recalls that in its report provided in 1998, the Government indicated that it envisaged the possibility of returning foreign workers to the Employees’ Social Security Scheme and had proposed amendments to the legislation to this effect.

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

The Committee notes that the Government’s report has not been received and that the Government’s last report contained no reply to its previous comments. It must therefore repeat the observation it made in 1998 which read as follows:

The Committee notes the Government’s report and the discussion which took place at the 1998 Conference Committee on Malaysia’s application of Article 6, paragraph 1(b), of the Migration for Employment Convention (Revised), 1949 (No. 97), raising similar problems to those considered under this Convention.

Article 1, paragraph 1, of the Convention. In its previous comment, the Committee drew the Government’s attention to the fact that the transfer of foreign workers, working in the private sector, from the Employee’s Social Security Scheme (ESS) to the Workmen’s Compensation Scheme was not in conformity with this provision of the Convention. A review of the two schemes had in fact shown that the level of benefits in case of industrial accident provided under the ESS was substantially higher than that provided under the Workmen’s Compensation Scheme. In this respect the Committee notes with interest that the Government has now reported that it is envisaging reviewing the present situation regarding the coverage of foreign workers under the ESS and that it is proposing amendments to the Social Security Act of 1969 in this regard. The Committee hopes that in its next report the Government will be able to indicate the progress made in amending the Social Security Act in order to ensure that foreign workers will receive the same workmen’s compensation benefits as those paid to nationals in conformity with this provision of the Convention. Please supply copies of the proposals made or the amended law, if adopted, in the next report.

The Committee hopes that the Government will make every effort to take the necessary action in the very near future.

Observation (CEACR) - adopted 2000, published 89th ILC session (2001)

The Committee notes that the Government’s report contains no reply to its previous comments. It must therefore repeat its previous observation, which read as follows:

The Committee notes the Government’s report and the discussion which took place at the 1998 Conference Committee on Malaysia’s application of Article 6, paragraph 1(b), of the Migration for Employment Convention (Revised), 1949 (No. 97), raising similar problems to those considered under this Convention.

  Article 1, paragraph 1, of the Convention.  In its previous comment, the Committee drew the Government’s attention to the fact that the transfer of foreign workers, working in the private sector, from the Employee’s Social Security Scheme (ESS) to the Workmen’s Compensation Scheme was not in conformity with this provision of the Convention. A review of the two schemes had in fact shown that the level of benefits in case of industrial accident provided under the ESS was substantially higher than that provided under the Workmen’s Compensation Scheme. In this respect the Committee notes with interest that the Government has now reported that it is envisaging reviewing the present situation regarding the coverage of foreign workers under the ESS and that it is proposing amendments to the Social Security Act of 1969 in this regard. The Committee hopes that in its next report the Government will be able to indicate the progress made in amending the Social Security Act in order to ensure that foreign workers will receive the same workmen’s compensation benefits as those paid to nationals in conformity with this provision of the Convention. Please supply copies of the proposals made or the amended law, if adopted, in the next report.

The Committee hopes that the Government will make every effort to take the necessary steps in the near future.