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Labour Clauses (Public Contracts) Convention, 1949 (No. 94) - Malaysia - Sabah (RATIFICATION: 1964)

Other comments on C094

Direct Request

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Article 2 of the Convention. Insertion of labour clauses in public contracts. Further to its previous comment, the Committee notes the Government’s indication that following the repeal of section 121 of the Labour Ordinance (Sabah, Cap. 67), the Labour (Public Contracts) Rules, 1951, which previously gave effect to the Convention, are no longer enforced. The Government explains that under the amended ordinance, which came into force in October 2005, the Labour Department still has the role of monitoring the awarding of public contracts by compiling copies of such awards and certifying that the employers/contractors have no outstanding labour claims by their employees regarding, for instance, the non-payment of wages and overtime payments. Such certification is compulsory for the employers to make their claims for the release of the retention money, usually 10 per cent of the project value, from the Public Works Department or the Treasury.

While noting the Government’s explanations, the Committee notes as well that the Convention has practically ceased to apply. The Committee draws the Government’s attention, in this respect, to the fact that merely monitoring the award of public contracts is not sufficient to give effect to the Convention which essentially requires that labour clauses, along the terms specified in Article 2 of the Convention, be inserted in all public contracts and in all relevant documents such as invitations to tenderers and general conditions or specifications. As the Committee has pointed out on numerous occasions, the Convention does not relate to some general eligibility criteria, or prequalification requirements, of individuals or enterprises bidding for public contracts but requires a labour clause to be expressly included in the actual contract that is finally signed by the public authority and the selected contractor.

Moreover, the insertion of labour clauses in public contracts under the Convention goes beyond the aims of simple certification, as its purpose is to eliminate the negative effects of competitive tendering on the workers’ labour conditions. The Convention seeks to ensure the contractor’s commitment to apply high standards of social responsibility in the execution of a public contract and therefore a mere indication that the contractor concerned has no record of labour law violation in previously completed works is not sufficient to meet its requirements. The Committee recalls that the Government may draw upon the 2008 General Survey on labour clauses in public contracts and the 2008 practical guide prepared by the Office on Convention No. 94, which offer guidance and examples on how legislative conformity with the Convention may be ensured. The Committee also recalls that the Government may, if it so wishes, seek technical assistance from the Office with a view to drawing up national laws or regulations effectively implementing the provisions of the Convention. The Committee accordingly requests the Government to take the necessary measures in the very near future to ensure that full effect is given to the Convention both in law and in practice.