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Concerns on Minimum Wages

Dear members,

A message on Minimum Wages from National Wages Consultative Council, Putrajaya, published on the Star attached for your information.

Yeo Eng Hock
SMA Secretariat
Tuesday October 2, 2012, the Star

Concerns on minimum wages

WE refer to the letter “ Minimum wage saga continues ” (The Star, Sept 27) by Peter Raiappan and “Addressing issue of minimum wage” (The Star, Sept 30) by Shamsuddin Bardan.

The secretariat of the National Wages Consultative Council fully appreciates both writers’ opinions and concerns on the implementation aspect of the Minimum Wages Order and the issues arising.

The secretariat would like to assure the writers that their views are indeed pertinent and there will be sufficient deliberation.

The Minimum Wages Order 2012 which was gazetted on July 16 has to be read together with the National Wages Consultative Council Act 2011 (Act 732).

In Act 732, minimum wages is defined as ‘basic wages’ to be as determined under the Act’.

The definition of ‘wages’ is also cross-referred to the definition of wages in the Employment Act 1955, as the case of Peninsula Malaysia, Sabah and Sarawak Labour Ordinances, respectively.

The rationale of having to define ‘wages’ in Act 732 and subsequently cross-referred to the three legislations above is because the general term of ‘wages’ is also used in sections 4, 28, 31, 32, 33, 34, 36 and 38 of Act 732 which refer to a wider context of wages and not the ‘minimum wages’. Thus, distinction between the term ‘minimum wages’ which is referred to as ‘basic wages’ in Act 732 and ‘wages’ has to be made.

Here, minimum wages is defined as ‘basic wages’.

Only for the purposes of restructuring of wages before the date of implementation of the order as provided for in paragraph six of the order, employers can negotiate with employees or unions to convert some of the allowances paid in cash as part of basic wage.

The secretariat would like to urge parties not to adopt a literal interpretation of Act 732 and the order but rather a purposive interpretation should be applied in order to realise the purpose of the Act and the order was meant to achieve.

To facilitate the implementation of the Minimum Wages Order, the Council issued guidelines.
The main purpose of the guidelines is to assist parties, the employers and employees, on the smooth implementation of the order.

Sufficient illustrations were provided in the guidelines for easy understanding and the secretariat hopes that parties would be enlightened with the guidelines.

The guidelines are available on the webpage of the ministry at

Further clarifications can be obtained by visiting the nearest Labour Department office or writing to the Secretariat at or calling the hotline of the Human Resources Ministry
at 03-8886-5156.

The secretariat would also like to reiterate that section 4(2) of Act 732 provides sufficient powers to the council to “do all things expedient or reasonably necessary for or incidental to the performance of its functions”.

We cannot use section 23 of Act 732 to issue guidelines as this section relates only to the minister making an order, including matters put forward by the council to the Government vide section 22(1)(e) of Act 732.

The secretariat has embarked on a nationwide public dialogue to explain t he Minimum Wages Order and the guidelines to the employers and employees.

The response has been overwhelming and sufficient feedback and input have been received
for further deliberation when the order will be reviewed within the next two years as per section 25 of Act 732.
Lastly, the secretariat would like to clarify that having a national minimum wage in Malaysia is a new development and as such there are bound to be some teething issues.

This is unavoidable as even in well drafted legislation, gaps are bound to occur as some matters may not have been anticipated when drafters were working on the text.

However, in the spirit of ‘continued improvement’ the secretariat appreciates the views of all parties and sufficient consideration will be given.

We should allow the law to develop and the secretariat is confident that with all the views and feedback from well-informed writers, such an exercise would be a smooth sailing one.

National Wages Consultative Council, Putrajaya

Source: THE STAR

Posted Date: 3 Oct 2012

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