The Federation of Malaysian Manufacturers (FMM) is most concerned about the repercussions and impact on the industry and economy following the March 1, 2024 announcement by the Home Minister of changes to the foreign worker policy which has caught the industry by surprise.
The sudden and hasty decision to cut short the quota validity period for those still having active quota balance with just a one month’s notice and to cancel all active quotas after March 31, 2024 as well as stop the entry of any workers under the active quota balance into the formal sector from June 1, 2024 would be most damaging as the sector has shown signs of business recovery in the second half of 2023 and is anticipated to gain momentum in the first half of 2024.
The sudden policy change will leave many manufacturers in a lurch in meeting their manpower requirements, especially those who have planned their worker intake in stages according to their job order schedule.
Many of those with an active quota balance had either delayed the process of bringing in the workers earlier due to the softening of the market or had staggered the worker intake over the 18-month quota validity period to coincide with their peak production period. Industries will now find themselves being unable to cope with their job orders due to the inability to bring in workers as planned, which may lead to having to cancel job orders or be subjected to financial penalties for late delivery or failure to meet confirmed orders.
The industry finds that the timelines announced under the policy change where employers have to apply for the Calling Visa/Visa Dengan Rujukan (VDR) by March 31, 2024 and ensure entry of the workers by May 31, 2024 as very restrictive and were decided hastily without any consultation and understanding of the actual time frame it takes in reality for employers to mobilise the workers. Allowing only one month for employers to get the calling visa issued would be a near impossible timeline as there is a long process involved starting with the job order approval at the source country, worker interview and selection, passport issuance and medical check-up before the employer can apply for the Calling Visa.
The process on average can easily take up to more than two and a half months. To compound the situation, with all employers scrambling to utilise their quota within the one-month period, it would lead to a sudden spike in recruitment of workers at the source country which would further lengthen the process.
It is most disappointing that the government’s focus or rationale for implementing the policy change is to meet the targets set on the number of foreign workers in the country of not more than 2.4 million by 2025 under the 12th Malaysia Plan but not giving any consideration to the actual labour requirements by industry at the current juncture. Implementing such a sudden policy change, especially when the industry is expecting to see pick-up in sales, production, capital investment as well as hiring will derail business and economic growth moving forward.
In this regard, we appeal to the Government to immediately convene a stakeholder engagement to understand the situation on the ground and to reconsider the policy implementation by extending the timeline by six months until September 2024 to allow employers to apply for the Calling Visa/VDR and arrange entry of the workers, thus giving employers with actual worker needs, sufficient time to mobilise the new workers under their active quota balance. In addition, the Government must consider the genuine need of workers to meet order obligations and consider new foreign worker quota application on a needs basis
Tan Sri Soh Thian Lai
President, Federation of Malaysian Manufacturers
