International Journal Of Academic Research In

Topics: Trade union, Employment, Collective bargaining Pages: 12 (4739 words) Published: November 20, 2014
International Journal of Academic Research in Business and Social Sciences October 2012, Vol. 2, No. 10
ISSN: 2222-6990

The Impact of Employment of Foreign Workers: Local
Employability and Trade Union Roles in Malaysia
Ramesh Kumar Moona Haji Mohamed
(PhD Candidate), School of Distance Education, 11800,Universiti Sains Malaysia Email: rameshk@utar.edu.my

Charles Ramendran SPR
Faculty of Business & Finance, UTAR
Email: charlesr@utar.edu.my

Peter Yacob
Faculty of Business & Finance, UTAR
Email: petery@utar.edu.my
Abstract
The issue of foreign workers has received increase media and national attention. However, to date there has been limited research on the nature and consequences of employment of foreign workers in Malaysia. Introduction of significant changes in recruitment phenomenon has ended in painful and traumatic atmosphere which barely acceptable by local workforce in Malaysia. This conceptual paper can be derived from the field of industrial relations which play a significant role in employment of foreign workers. The article reports on the preliminary findings on employment status of local workforce and trade union rights affected by employment of foreign workers. In addition, the research makes a number of recommendations, including the need for further development on reducing the employment of foreign workers and more refined targeting of vulnerable foreign workers linked with labor legislations.

Keywords: Malaysia, foreign workers, trade union rights, local workers and employability Introduction
For over the past decade, Malaysia has over dependence on the foreign workers the number of foreign workers has increase gradually in Malaysia. According to the Economic Report 2010/2011 by the Finance Ministry, there were 1.8 million registered foreign workers in Malaysia, 38.2% were employed in the manufacturing sector, 16% in the construction and 14.2% in the plantation sectors. Indonesia accounted for the highest number of registered foreign workers in Malaysia at 50.9% followed by Bangladesh was second highest, accounting for 17% of the total foreign workers in Malaysia, Nepal at 9.7%, Myanmar, 7.8%, India, 6.3% and Vietnam, 4.2%. It is undeniable that the foreigners working in Malaysia have contributed to 530

International Journal of Academic Research in Business and Social Sciences October 2012, Vol. 2, No. 10
ISSN: 2222-6990

the economic growth of the country, in particular by alleviating labor shortages in selected sectors of the economy but they still bring a lot of disadvantages to the country in terms of employment opportunity for local workers and effectiveness roles of trade union movement. Currently government has agreed to approve the recruitment of 45,000 foreign workers from India to meet the demand in 13 small-scale business sectors, which are facing manpower shortage in year 2011. Human Resources Minister Datuk Dr S. Subramaniam said the approval was given after considering the plight of businessmen in these sectors such as restaurants, grocery shops and the textile industry, which was raised in a memorandum submitted by the Malaysian Associated Indian Chamber of Commerce and Industry (MAICCI) to the Prime Minister.

However, the Malaysian Trades Union Congress (MTUC) said it opposes strongly the proposed mass recruitment of 45,000 foreign workers from India because it would edge out locals from the labor market. MTUC vice-president A. Balasubramaniam said that such a big influx of foreign workers could have a profound effect on the wages of Malaysians and jeopardize the government’s high-income policy for them. Furthermore A. Balasubramaniam mentioned that the government needs to prioritize Malaysians school leavers, retrenched, unemployed, university graduates, and the poor before deciding to hire foreigners. He further highlighted the government should get inputs from trade unions before approving permits for foreign worker.

In this situation, challenges facing by local...

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