Non-payment of Full Sum of Salary Claims of Non-Malaysian Work Permit Holders
Ministry of ManpowerSpeakers
Summary
This question concerns the non-payment of salary claims for non-Malaysian work permit holders and the recovery mechanisms available when employers fail to comply with money orders. MP Louis Ng Kok Kwang inquired about the frequency of security bond forfeitures and the usage of the Migrant Workers’ Assistance Fund (MWAF) over the last five years. Minister of State Zaqy Mohamad reported that while most workers receive full payment, roughly 10% receive ex-gratia assistance from the MWAF on a case-by-case basis. He noted that an average of 150 security bonds are forfeited annually, following a priority sequence where insurance settlements and bond forfeitures precede the deployment of the MWAF. The Minister of State emphasized that early reporting by workers is critical as it significantly increases the chances of recovering full salary arrears from defaulting employers.
Transcript
7 Mr Louis Ng Kok Kwang asked the Minister for Manpower for each year in the past five years for non-Malaysian work permit holders with salary claims, what is the number of cases whereby (i) the employer does not pay the full sum ordered by the Labour Court or Employment Claims Tribunal (ii) the security bond is invoked to repay the worker (iii) the Migrant Workers' Assistance Fund (MWAF) is used to repay the worker and (iv) both the security bond and MWAF are invoked.
The Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister for Manpower): In the last five years, the Labour Court and the Employment Claims Tribunals issued an average of 130 money orders per year for salary claims involving non-Malaysian Work Permit Holders. In most cases, affected workers received full payments from their employers or settlement payments through insurers. In about 10% of the cases, the Migrant Workers’ Centre stepped in to provide assistance to the workers via the Migrant Workers’ Assistance Fund (MWAF).
Employers are required to furnish a security bond (SB) for non-Malaysian Work Permit Holders whom they wish to employ. In the last five years, the Government forfeited an average of 150 SBs annually for workers with salary claims due to reasons such as non-payment of salary or failure to repatriate the workers. The MWAF is funded through donations from the public, which is matched by Government funding, rather than through forfeiture of SBs which can vary greatly from year to year.
All workers, local and foreign, should come forward when they face salary issues. The evidence clearly shows that early reporting greatly improves the chances of recovering the owed salaries fully from the employers.
Mr Louis Ng Kok Kwang (Nee Soon): I thank the Minister of State for the reply. Can I just check, for the 10% where the employers did not pay the unpaid wages, was the security bond used? Second, under what criteria is this security bond used and under what criteria is the Migrant Workers’ Assistance Fund (MWAF) used? And third, whether MOM has a preference on using either of these two?
Mr Zaqy Mohamad: Generally, we will talk to the companies to get the insurance to cover. If the insurance does not cover, the security bond gets forfeited, and the workers get assisted through the Migrant Workers’ Assistance Fund (MWAF). So, that gets deployed to supplement for the last 10%, for example, who do not get payments.
So, I think majority of those receiving orders actually get full payments but there will be some, if they approach the Migrant Workers Centre, we can provide some ex-gratia assistance, but on a case-by-case basis, to help them through.
Mr Louis Ng Kok Kwang: Can I just confirm that when they file a case, they do get judgment in the Court and if the employer does not pay and the insurance is unable to pay, then the security bond will be used in all cases?
Mr Zaqy Mohamad: That is the order of preference, yes.