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

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Direct Request (CEACR) - adopted 2020, published 109th ILC session (2021)

Article 2 of the Convention. Insertion of labour clauses in public contracts. In its previous comments, the Committee requested the Government to take the necessary measures to ensure the full application of the Convention, both in law and in practice. The Government reports that, although section 121 of the Sabah Labour Ordinance is no longer in force, all public contracts under the Sabah State Government nevertheless contain a specific clause on labour. The Government further indicates that the standard form of contract to be signed by the public authority and the selected contractor is based on section 23 of the Act on the Employment of Workmen, which contains provisions on days and hours of working, maintenance of wage ledgers and timesheets, defaults in payment of wages, dismissal of workmen and requires compliance with relevant national labour legislation. The Committee notes that the standard form of contracts (available online) to which the Government refers, such as the PWD form 203, the PWD 203A, or the PWD FORM 203N (Revised 2007) are pre-prepared contracts that contain labour clauses and provide a basic framework for the rights, obligations and duties of the contracting parties for the public construction sector. It further notes that the insertion of labour clauses in the standard form of contracts is carried out in the absence of specific national legislation or regulations that call for their use in all public contracts. In this respect, the Committee recalls that Article 2 of the Convention provides for the inclusion of labour clauses in all public contracts covered by the scope of Article 1 – drawn up after consultation of the employers’ and workers’ organizations – ensuring to the workers concerned conditions of remuneration and other conditions of labour which are not less favourable than those established by national laws or regulations, collective agreements or arbitration awards for work of the same character in the same sector. The Committee invites the Government to consider the possibility of adopting specific measures (either through enactment of specific legislation or by means of administrative instructions or circulars) for extending the obligation to include the labour clauses currently in use for the construction sector to all public contracts to which the Convention applies (whether for construction works, manufacture of goods or supply of services). The Committee further requests the Government to indicate the manner in which it is ensured that labour clauses of the type specified in Article 2 of the Convention ensure to the workers of contractors or subcontractors payment of wages and other working conditions not less favourable than those established for work of the same character in the same area by collective agreement, arbitration award or national laws or regulations.

Application of the Convention in practice. Labour inspection. The Committee requests the Government to provide information on the manner in which the Convention is applied, including statistics on the number of inspections conducted, the number and type of infractions detected and the sanctions applied.

Direct Request (CEACR) - adopted 2018, published 108th ILC session (2019)

The Committee notes with regret that the Government’s report has not been received. It hopes that the next report will contain full information on the matters raised in its previous comments initially made in 2012.

Repetition

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.

Direct Request (CEACR) - adopted 2017, published 107th ILC session (2018)

The Committee notes that the Government’s report has not been received. It hopes that the next report will contain full information on the matters raised in its previous comments initially made in 2012.

Repetition

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.

Direct Request (CEACR) - adopted 2012, published 102nd ILC session (2013)

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.

Direct Request (CEACR) - adopted 2008, published 98th ILC session (2009)

Article 6 of the Convention and Part V of the report form. Implementing legislation and information on practical application. The Committee notes that the Government’s report essentially reproduces information submitted earlier and contains no reply to the Committee’s last direct request. The Committee accordingly asks the Government to clarify whether following the repeal of section 121 of the Labour Ordinance (Sabah, Cap. 67), the Labour (Public Contracts) Rules 1951, which used to give effect to the requirements of the Convention, are still in force covering public works, the manufacturing of materials and the provision of services. The Committee would also appreciate receiving information regarding the points raised in its previous comment, in particular the possible lowering of the current exemption limit of US$30,000, and up to date information on the practical application of the Convention including, for instance, standard bidding or contract documents and model labour clauses, available statistics on the number of public contracts awarded each year and the approximate number of workers employed in their execution, labour inspection results showing the number and nature of contraventions of the relevant legislation and sanctions imposed, etc.

For all useful purposes, the Committee attaches herewith a copy of a Practical Guide, prepared by the Office principally on the basis of the General Survey of 2008 on Convention No. 94, to help better understand the requirements of the Convention and ultimately improve its application in law.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes that the Government’s report has not been received. It hopes that a report will be supplied for examination by the Committee at its next session and that it will contain full information on the matters raised in its previous direct request, which read as follows:

The Committee notes that the Government’s report contains very little information on the manner in which the Convention is applied in practice. In the light of the Government’s statement that the number of public contracts is rising in view of the numerous development programmes financed by public funds, the Committee trusts that the Government will make an effort to collect and communicate, in accordance with Article 6 of the Convention and Part V of the report form, all relevant information, including statistical data concerning the number of public contracts awarded during the reporting period, and the approximate number of workers involved in their execution. The Committee would also appreciate receiving copies of the standard form of contract or the model text of labour clauses currently in use. It reiterates its request for concrete information on the proportion of all public contracts falling at present outside the scope of application of the Convention, because of the US$30,000 exemption limit, and further asks the Government to indicate whether it considers lowering this exemption limit in the interest of extending the protection provided for in the Convention to a larger number of workers.

Finally, the Committee seizes this opportunity to refer to this year’s General Survey which contains an overview of public procurement practices and procedures in so far as labour conditions are concerned and makes a global assessment of the impact and present-day relevance of Convention No. 94.

Direct Request (CEACR) - adopted 2003, published 92nd ILC session (2004)

With reference to its previous direct request, the Committee notes that the Government’s report contains very little information on the manner in which the Convention is applied in practice. In the light of the Government’s statement that the number of public contracts is rising in view of the numerous development programmes financed by public funds, the Committee trusts that the Government will make an effort to collect and communicate, in accordance with Article 6 of the Convention and Part V of the report form, all relevant information, including statistical data concerning the number of public contracts awarded during the reporting period, and the approximate number of workers involved in their execution. The Committee would also appreciate receiving copies of the standard form of contract or the model text of labour clauses currently in use. It reiterates its request for concrete information on the proportion of all public contracts falling at present outside the scope of application of the Convention, because of the US$30,000 exemption limit, and further asks the Government to indicate whether it considers lowering this exemption limit in the interest of extending the protection provided for in the Convention to a larger number of workers.

Direct Request (CEACR) - adopted 2001, published 90th ILC session (2002)

Part V of the report form. The Committee notes that for many years the Government has been indicating that there are no legislative changes or other major developments to be reported and consequently no information has been provided on the practical application of the Convention. In this connection, the Committee recalls that under Article 6 of the Convention and Part V of the report form governments are requested to give a general appreciation of the manner in which the Convention is applied, including, for instance, extracts from official reports, information concerning the number of contracts and workers covered by relevant legislation, etc. The report form, which was adopted by the Governing Body of the ILO, is the main channel through which the Committee may obtain all the necessary information in order to follow the evolution of national laws and practice in matters covered by the Convention. The Committee would therefore be grateful to the Government for supplying in its next report detailed and up-to-date information on the practical application of the Convention, including copies of public contracts, the model text of the labour clauses currently in use, information from inspection services on the supervision and enforcement of national legislation and any other particulars bearing on the fulfilment of the conditions prescribed by the Convention. The Committee would appreciate in particular receiving concrete information on the number of public contracts awarded during the reporting period but falling below the exemption limit of $30,000 provided for in Rule 2(e) of the Labour (Public Contracts) Rules, 1951, considering that in some earlier comments it had invited the Government to examine the possibility of lowering this limit with a view to extending protection to a larger number of workers.