Revise HRDF levy, urge palm oil associations

by SHAHEERA AZNAM SHAH / pic by BLOOMBERG

THE palm oil associations are calling on the government to review the additional levy made under the expansion of the Pembangunan Sumber Manusia Bhd Act 2001, which has been made compulsory to all sectors.

In a joint statement, Malaysian Palm Oil Association (MPOA) CEO Datuk Nageeb Wahab; the Malayan Agricultural Producers Association (MAPA) president Mohamad Helmy Othman Basha; and Malaysian Estate Owners’ Association (MEOA) president Peter Benjamin proposed for plantation companies to be excluded from contributing to the Human Resource Development Fund’s (HRDF) levy under the act.

“We view that it is inappropriate and unsuitable to expand the Act to the plantation sector, which is dependent on foreign workers not out of choice, but out of need.

“Alternatively, MAPA, MPOA and MEOA would like to propose that employers in the plantation sector be given the option to contribute 0.5% or otherwise towards the payment of the HR Development levy,” they said in a statement yesterday.

The expansion implies an increase in the number of employees and industries covered under HRDF’s training beginning March 1, 2021, raising the number of eligible employees from 2.5 million currently to 6.1 million.

Upon registration, eligible employers under the mandatory category are obliged to pay to HRDF a levy for each local employee at the rate of 1% of the employee’s monthly wages while employers with five to nine local employees under the optional category will have to pay the levy at the rate of 0.5%.

It was mandated by the government through the 11th Malaysia Plan under the “Strengthening the Lifelong Learning for Skills Enhancements” strategy, where access to HRDF is being expanded to all industries.

Employers of the new sectors listed in the act are also given an exemption from the levy for three months from March 1 to May 31, 2021.

The heads of the associations said the plantation sector had been exempted from contributing to the training fund since its inception due to the nature of the jobs required in the industry.

“The nature of the job itself is manual labour, repetitive and not complex. No formal training is required as on-the-job training is more than adequate to acquire simple knowledge on how to tap rubber or to harvest oil palm.

“This is the only training required and necessary for performing such repetitive operations effectively,” they said.

They added that the objective of the act does not match with the state of human capital on plantations as more than 90% of plantation workers in Malaysia are foreigners, while the number of local workers is dwindling due to retirement.

“The objective of the act is to train Malaysian workers, but more than 90% of the plantation workers are foreigners and only about 10% are locals and the number is dwindling due to retirement, resignation and reluctance of local workers to carry out manual work in plantations.

“The workforce in the plantation sector still consists of predominantly unskilled workers and therefore the sector does not have to be included under the act, which was enacted with the main objective to drive human capital development in Malaysia towards a knowledge economy,” they said.

They added that at present, the overriding problem confronting the plantation sector is not the shortage of skilled manpower, but rather the shortage of manual workers.

“The primary objective of this sector now is how to get the required number of manual workers rather than to meet the training requirements,” they said.


Read our previous report here

Palm oil industry not in the loop on additional cess