PETALING JAYA, July 25: Tesco Malaysia has confirmed that it will terminate its contracts with employment agencies that supply foreign workers.
“In order to adhere to new government policies on recruiting workers from outside of Malaysia, we have been gradually reducing the number of service contracts with agencies towards directly recruiting more Malaysians,” a Tesco spokesman told FMT.
“We expect to have a 100 per cent local workforce in replenishment roles across our stores and distribution centres by November 2020.”
The contract terminations are expected to start next month, and the company is now in the process of remediating the workers’ recruitment fees.
Many foreign workers have no choice but to take out high-interest loans or sell properties or other possessions to pay for recruitment fees to work in Malaysia. Furthermore, the high monthly repayments to these agencies often push the workers into debt bondage.
Tesco Malaysia currently employs more than 7,000 people across 60 stores and two distribution centres in Peninsular Malaysia and sources in the know have told FMT at least 1,500 workers will be affected by the contract terminations.
The Tesco spokesman said the decision to terminate the contracts was in line with the government’s freeze on foreign worker intake until the year’s end as well as with the company’s focus on “employing Malaysians only” during a time that unemployment is at its highest in 22 years.
Abdul Aziz Ismail, a member of the Selangor Anti-Human Trafficking Council task force, told FMT the employment agencies now had two options.
“An agency might apply for a checkout memo with the immigration department for the workers to return to their home countries,” he said.
“If they don’t do that, they have to help the workers change employment legally. If not, these workers will be here illegally after the expiry of their employment passes.”
Aziz noted that the workers could not be summarily dismissed as the agencies would need a valid reason to terminate their services.
Under the Malaysian Industrial Relations Act, workers who have been dismissed without just cause by their employers may appeal to the Director-General of Industrial Relations to be reinstated in their former employment within 60 days of their dismissal.
Aziz said he failed to understand why Tesco would want to outsource its operations instead of directly employing migrant workers since it had the capacity to do so.
Tesco Malaysia was in the spotlight in May when its UK headquarters reported finding instances of abuse against migrant workers.
Interviews with 168 of Tesco Malaysia’s migrant workers for this year’s edition of Tesco’s annual report on modern slavery uncovered various allegations, such as retention of passports, unexplained and illegal wage reductions, heavy indebtedness to labour brokers in their home countries and excessive overtime.
Tesco then said it would undertake detailed investigations of specific allegations, set up support lines for agency workers in their home languages and provide guidelines to ensure workers’ access to passports whenever needed.
The Tesco spokesman told FMT the company had been working with agency contractors to ensure that foreign workers’ wages and benefits of migrant workers were in line with Malaysian employment law, that standards of accommodation would be improved and that all workers would have access to an independent protector line to make complaints.
The spokesman claimed Tesco Malaysia had a “a zero-tolerance approach to exploitation” and said the company had been assured by agency contractors that foreign workers would have unrestricted access to their passports.