Wednesday, September 9, 2009


Hi guys, sorry for not having any new entries in here for more than a week now. I've been occupied at work plus I've been pissed off with some people for the past week. Some people just irk me senseless.

My feathers have also been ruffled recently by some foreign worker agencies. I do think that some agencies do not really know what they are supposed to be doing. I found out that some agencies are not even up to date in terms of their knowledge of prevailing legislation affecting foreign workers. Not only that, they do not know the difference between outsourcing and direct labour recruitment.

Basically when a company decides to engage foreign manpower on an outsourced basis, it means that the company need only to pay the wages and the consultancy fees to the agency. All other charges incurred for work permit application, levy, accomodation, transportation and workmen's compensation insurance are to be borne by the agency. The work permit is also to be under the agency's name. For all intents and purposes, the workers are the employees of the agency, not the company in which they work. The company only contracts for the services of the workers, not offer them direct employment.

If a company decides to employ the foreign workers directly, the agency only acts as recruitment broker to bring in the workers from their country of origin and assist the company to apply for work permits, visas, FOMEMA medical check-up and other statutory requirements. In this case the company which hires the workers are the direct employers of the workers. A formal employment contract is to be issued by the company to the workers individually and the levy payment, wages and other mandatory contributions and benefits are to be borne by the company.

The Government has recently announced that with effect from 1 April 2009, no deductions are to be made from the foreign workers' salaries with respect to the levy payment. This applies to all workers whether hired on outsourced basis, or direct basis. Where the workers are outsourced from an agency, the agency is responsible to pay for the levy, and no deductions are permitted to be made from the workers' wages.

As I discovered, and personally experienced recently, many agencies still charge their clients various processing fees and other costs including the levy under an outsourcing agreement. Some include a clause in the agreement which obligates the client to deduct the salaries of the workers and pay the deducted portion to the agency as levy reimbursement. This is not right.

There are also those which do not provide basic amenities such as transportation and accomodation, as per the Government regulations. These are outsourcing agencies' responsibilities which should not be passed on to the client.

I do  not know whether these agencies are genuinely unaware of their mistake or if this is practiced to inveigle unsuspecting clients.

Caveat emptor, companies need to be smart enough to read the fine print in outsourcing agreements. When in doubt, consult your nearest labour office or trade association. More often that not these agencies will not change these so-called fundamental terms of their service agreement. If this happens, then the company should change the agent. That's all.

What pissed me off though is that there are many such agencies around and it is not a conducive situation when I am pressed for time to get my workers on board. Coupled with the fact that it is close to impossible to get local people to work. Everyone is holding businesses at ransom these days. Staffing is becoming an expensive aspect of business and a playground for the opportunists.

Tommorow I'll be back with another instalment of Gavelled Destiny.