KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) says a sudden shift in foreign worker policy could disrupt the positive trajectory in the manufacturing sector.
Tan Sri Soh Thian Lai, the president of FMM, said the federation expressed concern regarding the potential repercussions and economic impact of terminating all active quotas effective March 31, 2024.
He said this decision has taken industry players by surprise, especially when the sector is expecting to see pick-ups in sales, production, capital investment, and hiring.
Soh emphasised that the abrupt and hurried nature of cutting short the validity period of quotas, along with providing only a one-month notice, and halting the entry of workers under active quota balances into the formal sector from June 1, 2024, could have severe detrimental effects.
He said that the manufacturing sector has exhibited signs of recovery in the latter half of 2023 and is expected to continue gaining 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 staggered the worker intake over the 18-month quota validity period to coincide with their peak production period.
"Industries will now find themselves 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," he said in a statement.
Soh said that FMM is disappointed that the government's focus or rationale for implementing the policy change is to meet the targets set for the number of foreign workers in the country of not more than 2.4 million by 2025 under the 12th Malaysia Plan.
He claimed that no consideration was given to the actual labour requirements of industry at the current juncture.
He said that 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, are very restrictive.
According to Soh, this was decided without any consultation or understanding of the actual timeframe it takes, in reality, for employers to mobilise the workers.
"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," he said.
Soh said that this would give employers the actual workers needed and sufficient time to mobilise new workers under their active quota balance.
He said that allowing only one month for employers to get the calling visa issued would be a near-impossible timeline as it involves a long process, starting with job order approval in the source country, worker interview and selection, passport issuance, and medical check-ups, before the employer can apply for the calling visa.