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The Committee notes the information provided in the Government’s report, in particular the adoption of the Labour Ordinance of Sabah (Amendment) Act 2005 (Act A1238) of 1 October 2005 which incorporates many of the provisions of the Employment Act 1955.

Article 4(2) of the Convention. Partial payment of wages in kind. Further to its previous comments on this point, the Committee notes with satisfaction that section 116 of the Labour Ordinance of Sabah (Cap. 67) now reflects the provisions of section 29 of the Employment Act 1955, and allows for accommodation, food, fuel, light, water, medical attendance, or any other amenity or service, which may have been approved by the competent public authority, to be provided in addition to money wages. While noting the Government’s indication that in practice the payment of wages in kind is freely negotiated and agreed upon between the parties to the employment relationship, and while recalling that according to this Article of the Convention permissible allowances in kind are only those authorized by national laws and regulations, collective agreements or arbitral awards but not individual agreements, the Committee considers that the prior approval of the Director of Labour required under section 116(2) of the Labour Ordinance sufficiently guarantees the protection of workers against possible abuse. However, the Committee is of the view that under section 112(5) of the Labour Ordinance, there might be a need to safeguard not only that the Director of Labour verifies that the provision of proposed allowances in kind is for the benefit of the employee but also that the allowances in question are fairly and reasonably priced (for instance at cost price, market value, or a rate fixed by law). The Committee therefore suggests that the Government should consider the possibility of amending the above provision accordingly. It also requests the Government to provide more concrete information on the conditions under which and the limits within which in-kind payment is authorized by the Director of Labour in practice.

Moreover, the Committee understands that the Labour Ordinance, Sarawak (Cap. 76) was amended by Act A1237 of 10 October 2005. The text of the amended Ordinance not being available at the Office, the Committee would appreciate receiving a copy.

Article 13(1). Place and time of the payment of wages. Following up on its previous comment, the Committee notes that the Government makes renewed reference to the increasing use of electronic means for paying workers’ wages. However, the Committee wishes to draw the Government’s attention to the fact that the requirement of the Convention concerning the payment of wages on working days only and at or near the working place refers to the payment of wages “where made in cash” and is therefore completely unrelated to the payment of wages by electronic bank transfer. The Committee therefore reiterates its request for appropriate action to ensure that the requirements of the Convention as regards the time and place of payment are fully met in those branches of economic activity where non-cash methods of payment, such as bank transfer, are not yet generalized or practicable.

Part V of the report form. The Committee notes the statistical data concerning the number of labour inspection visits conducted in Peninsular Malaysia and in Sabah in the period 2004–06. More concretely, as regards the situation of pay arrears in Peninsular Malaysia, the Committee notes that the number of employers ordered to pay arrears in 2006 was 56 times higher than in 2004, with the overall amount of arrears concerning annual leave having increased ten times in the same period and the amount of arrears concerning overtime pay having increased four times. The Committee further notes that even though there have been 20 per cent less inspection visits carried out in 2006 as compared to 2004, the number of employers who were reprimanded upon inspection was eight times higher in 2006 than in 2004. The Committee would appreciate receiving additional explanations concerning the reasons of such sharp increase in the number and scale of violations of the wage protection legislation over the last four years. The Committee would also be grateful if the Government would continue providing up to date information on the practical application of the Convention, including any available statistics regarding the situation in Sarawak.