KUALA LUMPUR — November 5, 2018: The Malaysian Trades Union Congress (MTUC) has stated that the minimum salary increment of RM50 to RM1,100 as included in budget 2019 is unlawful.
According to its president Datuk Abdul Halim Mansor, also a member of the National Wages Consultative Council (NWCC), this is because the proposal did not come from the council, which is a requirement under the NWCC Act.
Halim gave this response following yesterday’s remark by Human Resource Minister M. Kulasegaran that the government can decide on the minimum wage irrespective of NWCC’s recommendations.
NWCC is the statutory body tasked to revise national wages and to submit its review to the minister who will then seek approval from the Cabinet.
Kulasegaran’s statement came after the Malaysian Employers Federation executive director Datuk Shamsuddin Bardan had pointed out that the budget announcement by Finance Minister Lim Guan Eng last Friday on this contradicts Article 25(1) of the act which says that the minimum wage can only be revised once every two years.
The first increment was announced in September, with a standard rate of RM1,050 across the country compared the RM1,000 for the peninsular and RM920 for Sabah and Sarawak under a decision made in 2016.
Halim pointed out that Article 22(2)(b) of the NWCC Act states that if the Cabinet disagrees with the proposed rate, it must instruct the council to make a fresh recommendation. He said members of the council were shocked when Lim announced the increment.
Shamsuddin, who is also a member of the council, maintained his view over the illegality of the increment.
“Once the RM1,050 is gazetted, it is the final review so the next will be two years later,” said Shamsuddin, adding that the council had not met since the gazette of the RM1,050 rate.
Another member of the NWCC who requested anonymity said it was foolish of Lim to “announce the rate willy-nilly” as it will complicate and could possibly strain employer-employee relationship.
“Now that employers know the rate is unlawful, it opens an avenue for them to not honour the new rate and instead stick to RM1,050 come January, which is bad news for the employees,” he said.