Network Rail fined £4m for Paddington crash

Network Rail was today fined £4m for "systemic and unacceptable" safety failures that led to the 1999 Paddington rail disaster.

Thirty-one people died and more than 400 were injured when a local Thames Trains service went through a red signal and collided with a London-bound First Great Western express train.

Network Rail - the firm responsible for maintaining Britain's railways - was fined at Blackfriars crown court, in London.

The company, which had earlier admitted breaches of the 1974 Health and Safety at Work Act between January 1 1995 and October 5 1999, was also ordered to pay £225,000 towards prosecution costs.

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Officials from Railtrack, the precursor to Network Rail, were warned at least five years before the collision that a set of signals was badly laid out and so difficult for drivers to interpret that a serious incident was likely to happen, the hearing was told.

The signals had been misinterpreted by drivers at least seven times in the previous five years, and had been the subject of internal inquiries.

The Paddington disaster, which was likened in court to a "senseless and unnecessary terrorist attack", would never have happened had it not been for a string of safety blunders.

Failures spanned several years and flowed from "the culture at the top" of the company, the court heard.

Passing sentence, Mr Justice Bean said Railtrack had admitted that its failure to carry out "adequate root cause analysis" of signals passed at danger (Spads) had been "systemic and unacceptable".

Quoting from his judgment, he added: "It was due, as counsel to the [Lord Cullen] inquiry submitted, to a combination of incompetent management and inadequate process, the latter consisting in the absence of a process at a higher level for identifying whether those who were responsible for convening such committees were or were not doing so.

"If a signal sighting committee had been convened, it would have found that SN [signal] 109 was unacceptable, not merely because of its non-compliance with the relevant group standards, but also of the inferior quality of its visibility."

Chris Newell, the principal Crown Prosecution Service legal adviser, said Railtrack had been held accountable for the "disastrous and inexcusable failures" that caused the tragedy.

Denman and Maureen Groves, who lost their daughter, Juliet, in the crash, said it was "plain from quite early on" who was to blame for the disaster.

"Now we believe the truth has been heard in court," they said. "But still there are those who should have been brought to court today to stand trial for manslaughter.

"They go unpunished for their gross negligence that killed our beloved daughter Juliet and 30 others. The worrying thing is they still work for Network Rail."

The Network Rail chairman, Ian McAllister, said the company was "very sorry for the failings of Railtrack some seven years ago that contributed to the tragedy at Ladbroke Grove".

"Network Rail accepts the fine imposed by the court today," he added. "The events of Ladbroke Grove will always be remembered, and our thoughts must remain with the families and friends of the 31 people who lost their lives on that tragic day and those that were injured."

The court heard that one Railtrack official had gone as far as to assure First Great Western Trains and the rail drivers' union Aslef that he had ordered an expert review into the safety of the controversial signal when he had in fact not done so.

Another official was so concerned he sent a colleague an email warning of "a big one". He asked that it be deleted once read.

At 8.11am on October 5 1999, his fears were realised when the Thames Trains service, leaving Paddington, passed signal SN109 at red and drove into the path of the First Great Western Trains flyer, which was travelling from Cheltenham.

Both drivers belatedly realised they were on a collision path but were unable to stop and crashed at 130mph.

At the hearing, Philip Mott QC said "a catalogue of failures to act over a number of years" had "left one signal in an inadequate state and continually missed by experienced and inexperienced drivers".

Mr McAllister said new systems that would prevent a repeat of the disaster were in place.

"The railways have seen huge change since 1999," he added. "Network Rail took over from Railtrack in 2002 and completed the installation of an automatic train braking system that would have prevented the Ladbroke Grove tragedy.

"This system ... will automatically apply a train's brakes if it passes a signal at red or approaches one too quickly."

EU Socialists call for hedge fund regulation

BRUSSELS (Reuters) - Hedge funds and private equity pose risks to financial market stability and should be regulated more tightly, top Socialist MEPs said on Thursday.

The European Union assembly's second-largest group unveiled a report which it said showed the case for mandatory regulation in a sector that has hit the headlines in recent months for its ever-bigger takeovers and sparked labour union concern.

"We are dealing with hedge funds raising questions of systemic risk," Poul Nyrup Rasmussen, president of the group and a former prime minister of Denmark, told reporters.

Hedge fund TCI put Dutch bank ABN AMRO (AAH.AS: Quotazione, Profilo) into play last month by asking for it to be split up to create more value to shareholders.

Private equity firm Texas Pacific Group came under fire when airline catering firm Gate Gourmet, which it has since sold, sacked hundreds of people.

"The first thing we will move on is transparency and disclosure," Rasmussen said.

Parliament has no power to initiate legislation but the Socialists want to launch a debate to persuade the European Commission to make proposals that EU states could adopt.

The EU legislature has joint say along with EU governments on legislation related to financial services.

"After that we will focus on how can we, through national and EU legislation, protect our companies against undermining their international competitiveness," Rasmussen said.

"We are proposing a whole range of regulations, starting from incentives to direct EU and national regulation," he said, adding this could include a European regulator for the sector.

John Monks, leader of pan-EU labour union group ETUC, warned a seminar organised by the Socialist group that hedge funds and private equity groups faced a "long and bitter fight", accusing them of "asset stripping" and "destroying jobs".

But Dan Waters of Britain's Financial Services Authority told the seminar that a study of risk in the hedge fund sector found that "overall, this is not an alarming picture".

"There is no case demonstrated for the regulation of hedge funds in Europe. It would be a serious mistake to do so," he said.

Portuguese Finance Minister Fernando Teixeira dos Santos said EU finance ministers will discuss sector oversight soon.

"Such a European framework could be based on minimum standards, soft law, recommendation or just robust peer pressure mechanism in order to ensure healthy competitiveness," he said.

But dos Santos, whose country becomes EU president in July, said it was too early to say if mandatory rules were needed.

EU Internal Market Commissioner Charlie McCreevy, responsible for financial services, has repeatedly said no new rules are needed -- to the increasing anger of many lawmakers.

"McCreevy is the last voice in Europe and the United States saying what we need is deregulation. McCreevy is not that important for the moment," Rasmussen said.

McCreevy responded by saying there are rules in place that govern hedge fund activities and their exposure to banks.

"The case for additional legislation at EU level has not been proven but is being kept under review," his spokesman said.

Javier Echarri of private equity industry lobby EVCA told the seminar the sector invested in 8,000 European companies last year and was properly regulated by national watchdogs.

New GLS Report: UNDUE INFLUENCE: Corporations Gain Ground in Battle over China's New Labor Law

A behind-the-scenes battle is raging worldwide over reforms in China’s labor law. On the one side are U.S.-based and other global corporations who have been aggressively lobbying to limit new rights for Chinese workers. On the other side are pro-worker rights forces in China, backed by labor, human rights, and political forces in the U.S. and around the world.

A new report by Global Labor Strategies, entitled UNDUE INFLUENCE: Corporation Gain Ground in Battle Over China’s New Labor Law, details how lobbying by American Chamber of Commerce in Shanghai (AmCham), the United States-China Business Council, and U.S.-based global corporations have forced significant changes in contract, collective bargaining, severance, and other rights guaranteed for Chinese workers under a law to be voted on later this year by the Chinese National People's Congress. UNDUE INFLUENCE follows on GLS's groundbreaking report: BEHIND THE GREAT WALL: U.S. Corporations Opposing New Rights for Chinese Workers.

The battle is far from over, however. UNDUE INFLUENCE reveals that while publicly claiming to support the new legislation, companies like Wal-Mart, Microsoft, Google, General Electric and others have launched an unpublicized new attack demanding further gutting of the law's most important provisions.

But UNDUE INFLUENCE also discloses significant pushback by Chinese and international forces. U.S. members of Congress have introduced legislation decrying the corporate intervention and apparent Administration complicity; China's official labor organization, the All-China Federation of Trade Unions (ACFTU), has taken a strong stand against corporate pressure; international union federations have pressured their employers to reverse course; and human rights organizations have mobilized support for Chinese workers' rights.

Such counter-pressure has led to splits among global companies operating in China. Nike has virtually repudiated the efforts of the United States Chamber of Commerce in Shanghai (AmCham) to lobby against the law. And the E.U. Chamber of Commerce has reversed its opposition to the law and renounced its threat that its member companies may leave China if the law is passed. Undue Influence reveals this and other shifts among U.S. and E.U. corporations operating in China.

Copies of Undue Influence are available here. The report appendices are available here.

EXECUTIVE SUMMARY

1. A behind-the-scenes battle is raging worldwide over reforms in China’s labor law. On the one side are U.S.-based and other global corporations who have been aggressively lobbying to limit new rights for Chinese workers. On the other side are pro-worker rights forces in China, backed by labor, human rights, and political forces in the U.S. and around the world.

2. Corporations operating in China are claiming success in pressuring the Chinese government to weaken or abandon significant pro-worker reforms it had proposed. Global Labor Strategy’s analysis of the revised draft of the law shows how many of their demands have been conceded.

3. Now both the American Chamber of Commerce in Shanghai (AmCham) and the US-China Business Council have launched an unpublicized new attack demanding further weakening of the law.

4. The Bush Administration recently revealed to the U.S. Congress that it has been “closely following” the drafting of the new labor contract law and that the American Embassy in China has been consulting AmCham on this matter. But the Administration appears to have done nothing to disassociate itself from the efforts of U.S. corporations and their representatives to restrict the rights of Chinese workers.

5. Chinese and international forces are engaged in a significant pushback against the gutting of China’s new labor law. U.S. members of Congress have introduced legislation decrying the corporate intervention and apparent Administration complicity; China’s official labor organization, the All-China Federation of Trade Unions (ACFTU), has taken a strong stand against corporate pressure; international union federations have pressured their employers to reverse course; and human rights organizations have mobilized support for Chinese workers’ rights.

6. Such counter-pressure has led to splits among global companies operating in China. Nike has virtually repudiated the efforts of the United States Chamber of Commerce in Shanghai (AmCham) to lobby against the law. And the E.U. Chamber of Commerce has reversed its opposition to the law and renounced its threat that its member companies may leave China if the law is passed.

7. The battle is likely to come to a head in the Chinese National People’s Congress in April or June of 2007. But the implementation of the new law, and the further expansion of Chinese workers’ rights, will depend on the rapid changes going on in Chinese labor relations, which are increasingly marked by burgeoning strikes, worker protests, lawsuits, and changing forms of labor organizations, including the expansion of the ACFTU into foreign invested enterprises such as Wal-Mart.

8. The new focus on the role of U.S. and other global corporations in China represents the emergence of a “new paradigm” for analyzing the current form of globalization not just in terms of a “trade debate” based on “free trade vs. protectionism,” but as a product of a global “sweatshop lobby” that is deliberately shaping labor law and labor markets around the world.

9. The role of China in the global economy is shaping up to be the dominant economic issue in the 2008 presidential elections in the U.S. With widespread anxiety about the security of U.S. jobs, the role of U.S. corporations in opposing rights for Chinese workers is emerging as a significant issue in those elections.

Very thanks to: laborstrategies.blogs.com

New GLS Report: UNDUE INFLUENCE: Corporations Gain Ground in Battle over China's New Labor Law

A behind-the-scenes battle is raging worldwide over reforms in China’s labor law. On the one side are U.S.-based and other global corporations who have been aggressively lobbying to limit new rights for Chinese workers. On the other side are pro-worker rights forces in China, backed by labor, human rights, and political forces in the U.S. and around the world.

A new report by Global Labor Strategies, entitled UNDUE INFLUENCE: Corporation Gain Ground in Battle Over China’s New Labor Law, details how lobbying by American Chamber of Commerce in Shanghai (AmCham), the United States-China Business Council, and U.S.-based global corporations have forced significant changes in contract, collective bargaining, severance, and other rights guaranteed for Chinese workers under a law to be voted on later this year by the Chinese National People's Congress. UNDUE INFLUENCE follows on GLS's groundbreaking report: BEHIND THE GREAT WALL: U.S. Corporations Opposing New Rights for Chinese Workers.

The battle is far from over, however. UNDUE INFLUENCE reveals that while publicly claiming to support the new legislation, companies like Wal-Mart, Microsoft, Google, General Electric and others have launched an unpublicized new attack demanding further gutting of the law's most important provisions.

But UNDUE INFLUENCE also discloses significant pushback by Chinese and international forces. U.S. members of Congress have introduced legislation decrying the corporate intervention and apparent Administration complicity; China's official labor organization, the All-China Federation of Trade Unions (ACFTU), has taken a strong stand against corporate pressure; international union federations have pressured their employers to reverse course; and human rights organizations have mobilized support for Chinese workers' rights.

Such counter-pressure has led to splits among global companies operating in China. Nike has virtually repudiated the efforts of the United States Chamber of Commerce in Shanghai (AmCham) to lobby against the law. And the E.U. Chamber of Commerce has reversed its opposition to the law and renounced its threat that its member companies may leave China if the law is passed. Undue Influence reveals this and other shifts among U.S. and E.U. corporations operating in China.

Copies of Undue Influence are available here. The report appendices are available here.

EXECUTIVE SUMMARY

1. A behind-the-scenes battle is raging worldwide over reforms in China’s labor law. On the one side are U.S.-based and other global corporations who have been aggressively lobbying to limit new rights for Chinese workers. On the other side are pro-worker rights forces in China, backed by labor, human rights, and political forces in the U.S. and around the world.

2. Corporations operating in China are claiming success in pressuring the Chinese government to weaken or abandon significant pro-worker reforms it had proposed. Global Labor Strategy’s analysis of the revised draft of the law shows how many of their demands have been conceded.

3. Now both the American Chamber of Commerce in Shanghai (AmCham) and the US-China Business Council have launched an unpublicized new attack demanding further weakening of the law.

4. The Bush Administration recently revealed to the U.S. Congress that it has been “closely following” the drafting of the new labor contract law and that the American Embassy in China has been consulting AmCham on this matter. But the Administration appears to have done nothing to disassociate itself from the efforts of U.S. corporations and their representatives to restrict the rights of Chinese workers.

5. Chinese and international forces are engaged in a significant pushback against the gutting of China’s new labor law. U.S. members of Congress have introduced legislation decrying the corporate intervention and apparent Administration complicity; China’s official labor organization, the All-China Federation of Trade Unions (ACFTU), has taken a strong stand against corporate pressure; international union federations have pressured their employers to reverse course; and human rights organizations have mobilized support for Chinese workers’ rights.

6. Such counter-pressure has led to splits among global companies operating in China. Nike has virtually repudiated the efforts of the United States Chamber of Commerce in Shanghai (AmCham) to lobby against the law. And the E.U. Chamber of Commerce has reversed its opposition to the law and renounced its threat that its member companies may leave China if the law is passed.

7. The battle is likely to come to a head in the Chinese National People’s Congress in April or June of 2007. But the implementation of the new law, and the further expansion of Chinese workers’ rights, will depend on the rapid changes going on in Chinese labor relations, which are increasingly marked by burgeoning strikes, worker protests, lawsuits, and changing forms of labor organizations, including the expansion of the ACFTU into foreign invested enterprises such as Wal-Mart.

8. The new focus on the role of U.S. and other global corporations in China represents the emergence of a “new paradigm” for analyzing the current form of globalization not just in terms of a “trade debate” based on “free trade vs. protectionism,” but as a product of a global “sweatshop lobby” that is deliberately shaping labor law and labor markets around the world.

9. The role of China in the global economy is shaping up to be the dominant economic issue in the 2008 presidential elections in the U.S. With widespread anxiety about the security of U.S. jobs, the role of U.S. corporations in opposing rights for Chinese workers is emerging as a significant issue in those elections.

Very thanks to: laborstrategies.blogs.com

Workers 'worse off under private equity'

Companies that are taken over by private equity firms leave their employees demoralised and financially worse off, according to a new report by The Work Foundation published today.

Where private equity groups bring in their own executives - so-called management buy-ins - around a fifth of jobs are cut within six years of the deal, while the remaining staff end up an average of £231 worse off than other private-sector workers.

The record of management buyouts, where the existing executives remain in place, is slightly better, with the overall workforce usually expanded after a round of initial job cuts. Nevertheless, workers are still on average £84 worse off each year compared to other private-sector employees.

The report said private equity takeovers also often destroy relations between management and their staff. Just one in 10 managers in private equity- owned firms said they were positive about the role of trade unions in the workplace, while some 40 per cent said they were "hostile" towards unions.

The Work Foundation, an independent think tank, concludes its report by calling on the Government to tighten workplace regulations to provide more protection for employees in the event of takeovers. The report also calls for tighter tax rules to prevent private equity firms from offsetting large portions of their debt interest against tax, and demands that the private equity industry becomes more transparent.

Will Hutton, chief executive of The Work Foundation, said: "Private equity firms pride themselves on their ability to squeeze performance from the organisations they own, and they turn up the pressure on individuals in order to do so. We are concerned that often, the price that is paid by workers is too high and that levels of trust between workers and managers suffer."

By James Daley
Published: 26 March 2007
Thanks to: news.independent.co.uk

Domestic help credit scheme to be launched in Sweden

After observing the experiments of the Finnish Tax Administration pertaining to the so-called domestic help credit, Sweden is now following the example set by its neighbour.
The domestic help credit has caused a heated debate in Sweden. The labour unions and left-wing parties have labelled the benefit as "a maidservant deduction", while the non-socialist parties have expressed enthusiasm about such a rebate.

"In Finland, the domestic help credit has created some 10,000 new jobs, while according to our calculations, approximately 3,000 to 19,000 new jobs could be opened up in Sweden", reported Sweden’s Minister for Industry Maud Olofsson.
Minister Olofsson noted further that the primary aim of the domestic help credit would be to help families with children.

"This is a gender equality reform, as today men and women alike work outside home", Olofsson concluded.
The domestic help credit can be granted for ordinary housekeeping, nursing and provision of care and maintenance and repair of homes or summer residences.

Finns find salaries in several public sector occupations loo low

Helsinki (16.03.2007 / edited 17.03.2007 - Juhani Artto) What are the average monthly earnings (in full-time work) for nurses? What should they be?

The earnings of nurses and nine other employee groups were treated in this way in the opinion survey, published last week by the Trade Union for the Public and Welfare Sectors JHL. Nine of the ten occupations, covered by the survey, are common to the public sector.

Before the questions were posed, the interviewees were told that in Finland the average monthly earnings of wage and salary earners are over EUR2,500.

Interestingly, Finns seem to have rather realistic picture of the earnings.

Still more interesting is that

• replies to the question "How much are the average monthly earnings of ..." came close to the basic pay

• and replies to the question "How much should the average monthly earnings of ... be" came close to the total earnings.

As the table below indicates, there is, in all ten occupations, a considerable difference between the average basic pay and the average total earnings. The latter includes overtime pay, working hour supplements, fringe benefits, performance-based bonuses and several other one-off items.

Among nurses the difference is almost EUR600 per month. The average difference between basic pay and total earnings of all ten occupations is over EUR330 per month.

For employees in nine of the ten occupations Finns support an average pay rise of EUR217 per month. This can be concluded from a comparison between the interviewees' idea of "proper pay" and the total earnings of the employees. Private child minders top the list with people recommending a EUR339 per month pay rise for them.

The tenth group, home care assistants, proves to be the exception. The interviewees find their total earnings to exceed the "proper pay" deserved by them, by EUR21 per month.

Results of JHL's opinion survey show that Finnish citizens share the union's claim that pay levels for public sector employees is too low. People, as well as the union, clearly regard the value of work performed by child minders, library clerks, building caretakers, nurses etc. as being worth more than their earnings indicate. Thus the results give valuable backing for the union in its collective bargaining efforts in the near future.

In the last few months' of the election campaigns, politicians have largely agreed with the need to raise the pay level of public health care employees. However, economists have reminded everyone that the budget framework does not allow for significant pay rises for any large group of public sector employees.

In eight of the ten occupations there is a considerable female majority. Therefore the debate about the pay level in these occupations has also had a strong gender dimension. Women are in majority also among youth leaders. Of the ten occupational groups only building caretakers are mostly men.

	Basic pay (e/month)	Total earnings (e/month)	"Present pay" in Finns' minds (e/month)	"Proper pay" in Finns' minds (e/month)
Nurse Sairaanhoitaja	1 835	2 422	2 093	2 532
Practical nurse Lähihoitaja	1 613	2 016	1 824	2 234
Assistant nurse Sairaala-apulainen	1 456	1 829	1 691	1 999
Kindergarten assistant Lastenhoitaja	1 609	1 862	1 762	2 102
Private childminder Perhepäivähoitaja	1 408	1 674	1 653	2 013
Home care assistant Kodinhoitaja	1 621	2 014	1 688	1 993
School assistant Koulunkäyntiavustaja	1 527	1 649	1 595	1 864
Youth leader Nuoriso-ohjaaja	1 659	1 920	1 778	2 035
Library clerk Kirjastovirkailija	1 569	1 767	1 856	2 046
Building caretaker Kiinteistönhoitaja	1 524	1 886	1 988	2 154

The table is produced by Statistics Finland. The basic pay and total earnings concern October 2006. The opinion survey figures are based on interviews, in February 2007, with 1,000 Finns (from 15 to 75 years of age).

Politicians Support Time Off Work to Care for Elderly

The idea of giving employees the right to adjust their working life in order to take care of elderly family members is gaining ground in government.


The idea of granting employees either shortened hours at work or short-term leaves of absence to take care of ailing elderly relatives was put forth by Finland’s Social Forum. This is an annual gathering of NGO's, professional, religious, and political groups.

In their meeting last week, they presented a report to government that urged legislators to enact changes to make this possible.

The newspaper Kotimaa reported on Tuesday that the idea is almost unanimously supported by newly elected parliamentarians.

Outgoing Minister for Social Affairs and Health says this subject should be incorporated into the next round of negotiations for national wages and working conditions.

The National Coalition’s party council chair, Sari Sarkomaa, says that implementing this type of workplace flexibility should be included in the next government's agenda.

Care for the elderly rose to become one of the main concerns of voters in the general elections. With baby boomers pushing 70 and poised to leave the workforce in droves, the government will have to come up with ways to take care of them even as income tax revenue declines.

Thanks to : YLE News, Finland.

Malaysia Employment Law : Occupational Safety And Health Act.

WHAT IS OCCUPATIONAL SAFETY AND HEALTH ACT ?

The Occupational Safety and Health Act is an Act which provides the legislative framework to secure the safety, health and welfare among all Malaysian workforce and to protect others against risks to safety or health in connection with the activities of persons at work.

This Act was gazetted on 24th February 1994 and may be cited as the Occupational Safety and Health Act 1994. This Act is a practical tool superimposed on existing safety and health legislation.

The aims of this Act are

• to secure the safety, health and welfare of persons at work against risks to safety or health arising out of the activities of persons at work
• to protect person at a place of work other than persons at work against risks to safety or health arising out of the activities of persons at work
• to promote an occupational environment for persons at work which is adapted to their physiological and psychological needs
• to provide the means whereby the associated occupational safety and health legislation may be progressively replaced by a system of regulations and approved industry codes of practice operating in combination with the provisions of this Act designed to maintain or improve the standards of safety and health.

The provision of the Occupational Safety and Health Act 1994 are based on the self-regulation scheme. Its primary responsibility is to ensure safety and health of work lies with those who create the risks and those who work with the risks.

Through self-regulating scheme that is designed to suit the particular industry or organization, this Act also aims to establish effective safety and health organization and performance.

The concept of self-regulation encourages cooperation, consultation and participation of employees and management in efforts to upgrade the standards of safety and health at the workplace.

The Occupational Safety and Health Act 1994 is enforced by the Department of Occupational Safety and Health (DOSH), a government department under the Ministry of Human Resources Malaysia.

Department of Occupational Safety and Health (DOSH) will ensure through enforcement and promotional works that employers, self-employed persons, manufacturers, designers, importers, suppliers and employees always practise safe and health work culture, and always comply with existing legislation, guidelines and codes of practice.

Department of Occupational Safety and Health (DOSH) will also formulate and review legislation, policies, guidelines and codes of practice pertaining to occupational safety, health and welfare as a basis in ensuring safety and health at work.

Department of Occupational Safety and Health (DOSH) is also the secretariat to National Council for Occupational Safety and Health, a council established under section 8 of the Occupational Safety and Health Act 1994.

The National Council for Occupational Safety and He

Malaysia Employment Law : SOCIAL SECURITY ORGANIZATION

WHAT IS SOCIAL SECURITY ORGANIZATION ?

The Social Security Organization is an organization set up to administer, enforce and implement the Employees' Social Security Act, 1969 and the Employees' Social Security (General) Regulations 1971.

The Social Security Organization provides social security protection by social insurance including medical and cash benefits, provision of artificial aids and rehabilitation to employees to reduce the sufferings and to provide financial guarantees and protection to the family.

SOCSO is the abbreviation for Social Security Organization. It is commonly known in the Malay term as PERKESO or Pertubuhan Keselamatan Sosial.

WHO IS COMPULSORY TO CONTRIBUTE TO SOCSO ?

An employee employed under a contract of service or apprenticeship and earning a monthly wages of RM2,000 and below must compulsorily register and contribute to SOCSO regardless of the employment status whether it is permanent, temporary or casual in nature.

An employee must be registered with the SOCSO irrespective of the age.

SOCSO only covers Malaysian workers and permanent residents. As a result, foreign workers are protected under the Workmen's Compensation Act 1952.

Nevertheless, SOCSO does not cover the following categories of persons :

• A person whose wages exceed RM2,000 a month and has never been covered before.
• Government employees.
• Domestic servants employed to work in a private dwelling house which includes a cook, gardeners, house servants, watchman, washer woman and driver.
• Employees who have attained the age of 55 only for purposes of invalidity but if they continue to work they should be covered under the Employment Injuries Scheme.
• Self-employed persons.
• Foreign workers.

WHAT DO WAGES MEAN FOR THE PURPOSE OF SOCSO CONTRIBUTION ?

For the purpose of SOCSO contribution, wages mean all remuneration payable in money to an employee. The following payments are considered as wages :

• salary
• overtime payment
• commissions and service charge
• payment for leave, sick, annual, rest day, public holidays, maternity and others
• allowances, shift, incentive, housing, food, cost of living and others.

Payments made to an employee paid at an hourly rate, daily rate, weekly rate, task or piece rate are also considered as wages.

However, the following payments are not considered as wages :

• payments by an employer to any statutory fund for employees
• mileage claims
• gratuity payments or payments for dismissal or retrenchment
• annual bonus.

WHAT IS THE COVERAGE PROVIDED TO AN INSURED PERSON BY SOCSO UNDER ESSA 1969 ?

An insured person or dependants will be entitled to the following benefits :

• Periodical payments in the case of invalidity
• Periodical payments in the case of disablement suffered as a result of an employment injury
• Periodical payments to the dependants of an insured person who dies as a result of an employment injury
• Payments for funeral benefit or expense on the death of an insured person as a result of an employment injury
• Periodical payments to an insured person who is in receipt of invalidity pension or disablement benefit and is so severely incapacitated or disabled as to require the personal attendance of another person
• Medical treatments for the attendance on insured persons suffering from disablement
• Periodical payments to dependants of an insured person who dies while in receipt of invalidity pension

SOCSO provides coverage to eligible employees through 2 schemes namely

• Employment Injury Insurance Scheme
• Invalidity Pension Scheme.

These schemes are classified into 2 categories :

• First Category - Employment Injury Insurance Scheme and Invalidity Pension Scheme. The contribution payment is made by both the employer and employee
• Second Category - Employment Injury Insurance Scheme Only. The contribution is paid by the employer only. An employee who is not eligible for coverage under the Invalidity Pension Scheme is protected under this category.

These schemes provide the benefits of invalidity pension, invalidity grant, survivors pension, rehabilitation, funeral benefit, constant attendance allowance and educational loan.

Malaysia Employment Law : Pension

WHAT IS PENSION ?

Pension means money paid under given conditions to a person following retirement or to surviving dependants.

The Pensions Act 1980 which came into force on the 1st January 1976 is the governing act for pensions benefits in Malaysia. This Act provide for the administration of pensions, gratuities and other benefits for officers in the public service and their dependants.

Under the Pensions Act 1980, pension, gratuity or other benefit granted shall be charged on the Federal Consolidated Fund.

Pension does not include any cash award granted in lieu of accumulated vacation leave to an officer whose salary is not paid out of the Federal Consolidated Fund.

An officer refers to an officer of the public service or an employee of any statutory or local authority who prior to retirement or death, was service in Malaysia or in any of the territories which presently constitute Malaysia.

WHO IS ENTITLED TO PENSION BENEFITS ?

In Malaysia, officers on full-time employment in the public service under given condition are entitled to pension benefits.

Public service refers to :

• the Judicial and Legal Service
• the General Public Service of the Federal Government
• the Police Force
• the Railway Service
• the Education Service
• the Joint Public Services common to the Federal Government and of one or more of the states
• the Public service of each state
• the Parliamentary service
• such other service as the Yang di-Pertuan Agong may determine to be public service for the purposes of the Pensions Act 1980

Officers in the public service

• who have opted or who are deemed to have opted for any New Scheme
• who are or were appointed under any New Scheme
• who by virtue of their option are bound by any New Scheme

and temporary officers in the public service who were appointed prior to the 1st January 1976 and who were not given the option to opt for the New Scheme which came into force from that date are entitled for pension benefits.

New Scheme is the revised salaries and terms and conditions of service of officers in the public service arising from the revision of salaries and terms and conditions of service of such officers made by the Federal Government with effect from the 1st January 1976 or from any other subsequent revision made by the Federal Government from time to time.

UNDER WHAT CIRCUMSTANCES CAN PENSION BE REDUCE OR WITHHOLD ?

An officer who is found guilty of negligence, irregularity or misconduct may have his or her pension, gratuity or other benefit for which the office would have been eligible, be reduced or withheld.

Malaysia Employment Law : Dispute

WHAT IS PENSION ?

Pension means money paid under given conditions to a person following retirement or to surviving dependants.

The Pensions Act 1980 which came into force on the 1st January 1976 is the governing act for pensions benefits in Malaysia. This Act provide for the administration of pensions, gratuities and other benefits for officers in the public service and their dependants.

Under the Pensions Act 1980, pension, gratuity or other benefit granted shall be charged on the Federal Consolidated Fund.

Pension does not include any cash award granted in lieu of accumulated vacation leave to an officer whose salary is not paid out of the Federal Consolidated Fund.

An officer refers to an officer of the public service or an employee of any statutory or local authority who prior to retirement or death, was service in Malaysia or in any of the territories which presently constitute Malaysia.

WHO IS ENTITLED TO PENSION BENEFITS ?

In Malaysia, officers on full-time employment in the public service under given condition are entitled to pension benefits.

Public service refers to :

• the Judicial and Legal Service
• the General Public Service of the Federal Government
• the Police Force
• the Railway Service
• the Education Service
• the Joint Public Services common to the Federal Government and of one or more of the states
• the Public service of each state
• the Parliamentary service
• such other service as the Yang di-Pertuan Agong may determine to be public service for the purposes of the Pensions Act 1980

Officers in the public service

• who have opted or who are deemed to have opted for any New Scheme
• who are or were appointed under any New Scheme
• who by virtue of their option are bound by any New Scheme

and temporary officers in the public service who were appointed prior to the 1st January 1976 and who were not given the option to opt for the New Scheme which came into force from that date are entitled for pension benefits.

New Scheme is the revised salaries and terms and conditions of service of officers in the public service arising from the revision of salaries and terms and conditions of service of such officers made by the Federal Government with effect from the 1st January 1976 or from any other subsequent revision made by the Federal Government from time to time.

UNDER WHAT CIRCUMSTANCES CAN PENSION BE REDUCE OR WITHHOLD ?

An officer who is found guilty of negligence, irregularity or misconduct may have his or her pension, gratuity or other benefit for which the office would have been eligible, be reduced or withheld.

Malaysia Employment Law : Dispute

WHAT IS A DISPUTE ?

A dispute being referred to as trade dispute under the Industrial Relations Act 1967 means any disagreement between the employer and workman or employee which is connected with the employment or non-employment or the terms of employment or the conditions of work of such workman or employee leading to industrial action.

The Industrial Relations Act 1967 governs the relationship between employers and workmen or employees and their trade unions and generally deals with trade disputes.

WHAT DOES THE INDUSTRIAL RELATIONS ACT 1967 PROVIDES ?

The Industrial Relations Act 1967 is applicable throughout Malaysia and provides for the regulation of relations between employers and workmen or employee and their trade union and the prevention and settlement of trade disputes.

This Act emphasizes on direct negotiation between employers and workmen or employees and their trade unions to settle their differences and to regulate their collective relationship and to settle any dispute arising therefrom through their own effort and through mutually agreed procedures with minimal government intervention.

Where the government intervention is necessary, such intervention will be confined mainly to providing a legal framework to which the parties can turn to if they so wished.

Under the Industrial Relations Act 1967, the legitimate rights of employers and workmen or employees and their trade unions are protected.

This Act also provides the procedure relating to submissions of claims for recognition and scope and representation of trade union and collective bargaining.

Under this Act, matters relating to promotion, recruitment, dismissal, transfer, retrenchment, reinstatement and allocation of duties and prohibition of strikes and lockouts over any of these matters are not allowed to be included in the proposal for collective bargaining.

Where direct negotiation between employers, workmen or employees and their trade unions fails, this Act provides for speedy and just settlement of trade disputes by conciliation or arbitration

This Act provides the power to the Ministry of Human Resources to intervene and to refer at any stage any trade dispute to the Industrial Court for arbitration.

After a trade dispute has been referred to the Industrial Court and on any matter covered by a collective agreement or by an award of the Industrial Court, employees or workmen are not allowed to declare strike or lockout.

Collective agreement means an agreement in writing concluded between an employer or a trade union of employers on one hand and a trade union of workmen or employees on the other, relating to terms and conditions between the two such parties.

This Act makes it an offence for any person to give financial aid in direct furtherance or support of any illegal strike or lockout. Such offences are seizable in nature and no bail shall be granted.

Peaceful and orderly picketing in furtherance of a trade dispute is permitted under Part IX, section 20 of the Industrial Act 1967 provided that such picketing is carried out at or near the place where a workmen or employee works and where a trade disputes exists. It will be illegal however for one or more persons to attend at or near a place of employment where a workmen works if such attendance is, by nature of its manner or number, calculated to intimidate any person in the place or to obstruct the approach thereto or egress therefrom or to lead to a breach of the peace.

Award means an award made by the Industrial Court in respect of any trade dispute or matter referred to it or any decision or order made by it under the Industrial Relations Act 1967. An award of the tribunal is final and legally binding on the parties to the dispute.

Unless approved by the Ministry of Human Resources, collective agreement cannot contain better terms of employment than those stipulated under the Employment Act 1955.

Part IV, section 15 of the Industrial Relations Act 1967 provides the protection of pioneer industries during the initial years of their establishment for a period of at least 5 years from the date of commencement of operation in Malaysia against any unreasonable demands from a trade union.

Malaysia Employment Law : Sexual Harassment

WHAT IS SEXUAL HARASSMENT ?

Sexual harassment means any unwelcome verbal, non-verbal, visual, psychological or physical conduct of a sexual nature that might, on reasonable grounds, be perceived by the victim as placing a condition of a sexual nature on his or her employment because of his or her sex.

Sexual harassment may also consist of an unwelcome verbal, non-verbal, psychological or physical conduct of sexual nature that might, on reasonable grounds, be perceived by the victim as an insult or humiliation, or a threat to his or her well-being, and has no connection with his or her employment.

Sexual harassment in the office includes work related harassment which happens outside the office. Such work related harassment may includes situations taking place at work-related social gathering or functions, conferences, workshop or training sessions and during work assignments outside the office.

Sexual harassment in the course of work-related travel is also considered sexual harassment in the office. Where sexual harassment occurs as a result of employment responsibilities or relationship over the phone and through electronic media, it is also considered sexual harassment in the office.

ARE THERE DIFFERENT TYPES OF SEXUAL HARASSMENT ?

There are two categories of sexual harassment, namely sexual coercion and sexual annoyance.

Sexual coercion is known as quid pro qul sexual harassment in the United States.

Sexual Coercion is a type of harassment which has direct results in some consequence to the victim's employment. It is an employment discrimination.

Sexual coercion is under a condition of employment, where an openly or implicitly offer in keeping a job or getting a promotion is made by a supervisor to an employee in exchange for sexual favors. Such person normally has the power over promotion or raise of the employee.

In sexual coercion, promotion and favorable job benefits will follow if an employee takes the advantage and consented to sex. On the contrary, if the employee rejects, the job benefits are denied.

The second type of harassment - sexual annoyance is also known as hostile environment sexual harassment.

Sexual annoyance is a demeaning and unwelcome sexually related behavior that is offensive, hostile or intimidating to the victim, but has no direct connection to any job benefits. However, the annoying behavior creates an offensive working environment which affects the victim's ability to continue working.

Sexual annoyance includes sexual harassment by an employee against a co-employee. Similarly, sexual harassment by a company's customer against an employee also falls into this category.

Nevertheless, the definition of subjective words like unwelcome, offensive and annoying still leaves for individual interpretation by courts.

Malaysia Employment Law : Firing

UNDER WHAT CIRCUMSTANCES CAN A CONTRACT OF SERVICE BE TERMINATED BY EITHER THE EMPLOYER OR EMPLOYEE ?

Where a contract of service is considered broken, an employer can dismiss an employee. A contract of service is considered to have been broken when an employee has been absent from work for more than 2 consecutive working days without prior leave from the employer or without informing or attempting to inform the employer at the earliest opportunity during such absence with reasonable excuse.

An employer may terminate the contract of service where the employee is found guilty of misconduct, misdemeanor or negligence.

An employee has the right to terminate the contract of service, where an employer fails to pay wages within seven days after the wages period.

A contract of service can also be terminated without notice :

• by paying to the other party or indemnity in lieu of notice
• if there is a willful breach by the other party of a term or condition of the contract of service

Where the contract of service has expired or work being completed, the contract may also be terminated. Written notice being given by either party may also terminates a contract of service.

WHAT IS THE NOTICE PERIOD REQUIRED TO TERMINATE A CONTRACT OF SERVICE ?

An employee may resign by giving notice of resignation or termination to the employer to terminate the contract of service. An employer may also dismiss an employee by giving notice of termination to such employee. In both situation, the length of notice shall be the same pursuant to the contract of service.

Where the period of notice of termination is not specified in the contract of service, the notice period shall be as follows :

• less than 2 years of service - minimum 4 weeks
• 2 years or more but less than 5 years of service - minimum 6 weeks
• 5 years of service or more - minimum 8 weeks

OTHER THAN TERMINATION, WHAT ACTIONS CAN AN EMPLOYER TAKES AGAINST AN EMPLOYEE ON THE GROUNDS OF MISCONDUCT ON THE PART OF THE EMPLOYEE ?

Where an employee is found guilty of misconduct by an employer, the employer may take the following actions :

• downgrade the employee
• impose any other lesser punishment as the employer considers just and fit

Malaysia Employment Law : Hiring

WHO CAN I EMPLOY ?

You can employ almost any local citizens. A person whom you employ under a contract of service is an employee.

In Peninsular Malaysia, only employees as being defined in the Employment Act 1955 is protected under the Act. In Sabah and Sarawak, an employee is defined in the Labour Ordinance (Sabah Cap. 67) and Sarawak Labour Ordinance (Cap. 76) respectively.

An employee under the Employment Act 1955 means :

• any person whose wages does not exceed RM1,500 per month under a contract of service with an employer
• any person who irrespective of the wages earns in a month has entered into a contract of service with an employer and disengaged in
  • manual labour
  • engaged in the operation of mechanically propelled vehicles
• one who supervises and oversees employees in manual labour
• any person engaged in any capacity in any vessel registered in Malaysia with certain exception

An amendment has been made to the Act on 1st August 1998 to include employee earning between RM1,500 and RM5,000 per month. However, these persons are only covered in terms of wages, allowances or other cash benefits.

Any complaints on employment shall be made by an employee to the nearest Department of Labour Office or Jabatan Buruh.

Where there are disputes such as unfair dismissal, employees covered and not covered under these Acts or Ordinance can voice their complaint to the Industrial Relations Department.

You are not permitted to employ women to carry out underground, industrial and agricultural work between 10:00 PM to 5:00 AM without exemption from the Directory General of Department of Labour.

Subject to certain requirements, you can only employ foreign workers in the plantation and manufacturing sectors. Only nationals of Cambodia, Indonesia, Philippines, Sri Lanka, Thailand, Bangladesh and Pakistan are permitted to be employed in these sectors.

A foreign company is only permitted to employ expatriate personnel in areas where there are lack of trained local to do the job under certain requirements.

A company with foreign paid-up capital of US$2 million and above will automatically be allowed 5 expatriate posts including key posts. Where such company requires additional expatriate posts, a request has to be made and posts requested will be given when necessary.

A company with foreign paid-up capital of less than US$2 million will be considered for expatriate posts on certain basis.

HOW DO I EMPLOY A LOCAL CITIZEN ?

There are various ways of offering an employment. Employment can be offered through advertisement, employment agencies, friends and even direct approach.

Your potential employee will apply for a position through phone, letter or personal approach. They may be solicited or unsolicited.

A job interview will normally be conducted to determine whether a short listed person is the right person for the job. The interview could be of a formal nature or simply an informal chat.

Where you decided to offer an employment, the law governing the relationship between an employee and an employer begins.

A contract of service is needed and can be oral or in writing depending on the period of employment.

The contract of service must be given to your employee on or before the commencement of an employment.

You must register your employee with the Employees Provident Fund (EPF) within 7 days of employment. There are certain person who are exempted from making the compulsory contribution.

If your employee is employed under a contract of service and earns a monthly wage of RM2,000 and below, you must also register with Social Security Organization (SOCSO) and make contributions to the organization on behalf of your employees to insure them against the contingencies of invalidity and employment injuries.