Government, workers and employers discuss COVID-19 impact on Malaysian supply chains

According to latest ILO estimates, over one million Malaysian jobs in manufacturing supply chains are at risk due to the COVID-19 crisis; Government, workers and employers discussed how to mitigate the impact of the crisis on Malaysia’s supply chains and build back better.

News | 26 May 2020

KUALA LUMPUR, Malaysia (ILO News) - Representatives from the Malaysian Ministry of Human Resources (MOHR), Malaysian Employers Federation (MEF) and Malaysian Trades Union Congress (MTUC) participated in a webinar organized by the International Labour Organization (ILO) entitled “Addressing the impacts of COVID-19 on supply chains in Malaysia” on 21 May.

In the opening session, Responsible Supply Chains in Asia Programme Manager, Fredy Guayacan, explained how the current crisis has exposed the vulnerabilities of global supply chains, including high levels of informality, putting both jobs and businesses at risk. The ILO Labour Economist, Christian Viegelahn, shared that the global drop in consumption –due to the COVID-19 pandemic- puts more than one million jobs in manufacturing supply chains at risk in Malaysia, in particular in the automotive, electronics and garment supply chains. There are also significant disruptions to the supply of imported inputs into Malaysian manufacturing production, due to workplace closure measures taken in response to the pandemic.

The MOHR Deputy Secretary General, Datuk Muhd Khair Razman bin Muhamed Annuar shared about the government economic stimulus package of MYR250 billion, in which MYR100 billion is allocated for the protection of general public and another MYR100 billion for businesses. Under this package, the government introduced wage subsidy programme, where employers will receive wage subsidy for their workers for a period up to six months ranging from MYR600-MYR1200 based on the size of the workforce. According to Datuk Razman, MOHR is currently developing a post-COVID re-employment programme, particularly for workers in sectors that are badly hit by Covid-19 pandemic.

The MEF Executive Director, Datuk Shamsuddin Bardan presented estimates that the country loss is approximately at RM2.4 billion/day, which is 35 billion/month during the movement control order (MCO) period. Almost 50 percent of self-employed Malaysians have lost their jobs due MCO, while 28 percent of employers experienced more than 90 percent drop in their income. Among the sectors that are badly hit are manufacturing and tourism, including air travel industries. He also added that employers are struggling to cut costs to retain their employees and might face threat of legal action for non-fulfilment of legal obligations. He called for measures to further support the needs of businesses during and post-COVID.

The MTUC Secretary General, Joseph Solomon said that workers are facing serious threats during MCO that include forced leave, no-pay leaves, salary deductions and union busting. He also emphasized on the need for employers and trade unions to be engaged in discussing workers’ issues. He also provided some recommendations on strengthening enforcement of compliance on labour laws. Mr Solomon also shared some of their proposals they have submitted to the government on protecting jobs and workers.

Mr Guayacan tackled the key policy recommendations to protect both enterprises and workers in the supply chains including targeting the most vulnerable and the informal economy in order to mitigate the economic and social consequences of the crisis; ensuring speed and flexibility in coming up with effective responses; focusing on income support for both businesses and workers to maintain economic activities; and tailoring responses to reach and support small businesses through combined measures of direct financial support and loan guarantees.

He further shared an example from Myanmar on how workers and employers have worked together to develop a plan to address issues in the garment sector. He emphasized on the importance of the social dialogue in responding to the crisis.

The webinar was attended by 117 participants from the government, trade unions, employers’ organizations, private companies, civil society organizations, academe, and other organizations.

This event was organized by ILO Bridge Project “From Protocol to Practice: A Bridge to Global Action on Forced Labour” with funding from the US Department of Labor. For more information, please contact Jodelen Mitra, Technical Officer at