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

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

Other comments on C019

Observation

Direct Request

2023
2021
2019

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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.