Employers want Sabah to stop allowing federal govt to dictate local labour laws

EMPLOYER associations in Sabah want the state government to assert its authority over laws governing workers in the state.

The groups made the call following concerns over a major legislative change they believed catered to the demands of the federal government.

They said the new laws could be detrimental to Sabah employers who are still struggling to stay afloat from cost escalations in the aftermath of Covid-19.

“The state government is seemingly meek in the issue… we dread the current process where the federal government is dictating the whole process,” Sabah Employers Association president Yap Cheen Boon said at a press conference yesterday in Kota Kinabalu.

Yap was speaking on behalf of the Federation of Malaysian Manufacturers (Sabah), Sabah Entrepreneurs Transformation, Kota Kinabalu Hardware, Machinery and Building Materials Traders Association, Sabah Timber Industry Association, and the Federation of Sabah Industries.

Yap cited one of the laws that was affecting Sabah employers was the requirement to hire a licensed safety officer when there are more than five workers.

Another new law included the incorporation of the Workers’ Minimum Standards of Housing and Amenities (Amendment) Act 2019 (Act 446) into the Sabah Labour Ordinance, and the progressive wage system.

The new laws require employers to provide beds, mattresses, locked cupboards, toilets, and a higher salary regime that will push the cost of running a company in Sabah higher.

Yap noted Sabah employers had only been consulted once, in 2019, on the amendment to the Sabah Labour Ordinance.

“We had expected the Sabah government to take lead in studying these amendments, engaging with stakeholders, and adapting it to Sabah’s unique context. However, the state government has been passive throughout the crucial process,” he said.

Sabah has the executive powers not to adopt any federal law it sees as detrimental to its people.

But Yap said the state involvement in the subsequent talks on the new law had been minimal.

Instead, the whole discussion had been run by the federal Jabatan Tenaga Kerja, he said.

Yap attributed some of these problems to the absence of a state human resource ministry.

He said the state government should strike a balance in the protection of local businesses and workers' welfare.

Sabah has the second largest working population in Malaysia. Its 1.9 million workers accountsfor 13% of Malaysia’s total employed persons.

But the state saw a 32% decline in the number of employers between 2018 and 2022 from 51,200 companies to 34,905 companies now.

“With fewer employers in operation, it is inevitable that demand for labour is hampered, resulting in Sabah having the country’s highest unemployment rate of 7.5%,” he said. –  June 20, 2024