Construction and Foreign Worker

1 Introduction

Manpower is one of the most pressing challenges facing by the Malaysia Construction Industry as the “Wet Trade” construction approach at present relies heavily on the availability of the large number of foreign labour. Economic Report 2001/2002 stated the employment of 769,300 workforces in the construction sector, foreign workers are estimated to constitute 70% (or 538,500) of the construction workforce.

The Malaysian Construction Industry has revamped its employment of foreign workers beginning the third quarter of 2002. As of today, approximately 300,000 legal foreign workers are employed in the construction industry (Wong, 2002).

2 Background of Study

The term ‘foreign workers’ empower a group of foreign nationals who legal right to work in a country where they have been officially recruited (Zehadul et al., 1999). Miller (1991) used the term ‘foreign workers’ as these person come from a welter of nationality groups, living and working with diverse legal status in a particular country. K. Rajkumar (2001) defined the ‘foreign employee’ as general an employee who is a non-citizen. Our definition of foreign workers in Malaysia indicates that they do not have any right to settle in this country.

The presence of foreign workers in Malaysia is not a new phenomenon. During the colonial period, foreign workers were recruited from China, Indonesia, and India to work in the mines and rubber estates. Malaysia imported foreign workers in the 19th century to develop its plantations and mines. Since both plantation and mines offered year-round jobs, permanent immigrants were encouraged to move to Malaysia.

The perceptible economic growth of the country since the seventies has created a regular and increasing demand for foreign workers in all sectors of the economy. Therefore, the employment of foreign workers in Malaysia has now become a regular phenomenon.

Now, there are more than 2 million foreign workers in Malaysia including legal and illegal workers from Indonesia, Thailand, Bangladesh, The Philippines, India and other countries (Ghosh, 1998). In the words of the World Bank, Malaysia is now a small island in the sea of potential foreign workers.

The percentage of skilled and professional workers is much lower than percentage of unskilled workers. Most of the foreign workers are concentrated in agriculture, construction and manufacturing sectors. This reflects that Malaysia, to some extent and for some years, has had to depend on foreign labour to sustain its economic growth and to remain the recent influx of immigrant workers has raised many issues and implications.

3 Problem Statement

The construction industry has been experiencing an acute labour shortage since the eighties. In the meantime, labour demand has been constantly increasing in the construction sector because the higher tempo of development. Due to the labour shortage, the wage rates of all categories of workers have gone up but supply of labour cannot be increases to the same extent as the demand for labour. Therefore, the gap has to be filled by importing foreign labour.

Jobs in the Malaysian construction industry are becoming unpopular among the working population in newly industrialized countries as they are more labour intensive, often difficult and to some extent, foreign labour has helped to reduce the shortage of workers in the construction industry.

Consequently, the inflow of the foreign labour into the country served to overcome this labour shortage. Nonetheless, the present influx of foreign labour in recent years, legal and illegal, has created a number of major issues and implications on the local scenes: economic, social as well as political.

Mr. Patrick Wong (2003), Vice President of Master Builders Association Malaysia had summarized that some contractors who employ foreign workers, have encountered problems. These problems include:

1. Many workers do not have prior construction experience, thus resulting in low productivity and poor quality of work; 2. Some of them were not able to cope with the new experience of working on large-scale projects;

3. Social and cultural problems, arising from workers coming from different regions;

4. Many are absent from work without notice for many days after pay days;

5. Due to continued presence of illegal workers, many legal workers chose to run away;

6. Many demanded for guaranteed working days or pay;

7. Accommodation was problematic; 8. Some contractors do not have any more new jobs after completion of their existing work;

9. Contractors securing new jobs have problems mobilizing new workers on time, due to work permit/recruitment process; and

10. Training was difficult, as most workers were paid daily wages and were reluctant to undergo training due to loss of pay.

Therefore, it is useful to determine the causes, impacts and ways to minimize the impacts on employing foreign labour Malaysia construction industry.

4 Aim and Objectives of Research

The aim of this research is to investigate the existing Malaysia construction industry foreign labour issues.

Specifically, this research is to carry out and achieves the following list of objectives:

i. To identify the causes of employing foreign labour in the construction industry; ii. To identify the impacts on employing foreign labour in the construction industry; and iii. To identify and establish ways to minimise the negative impacts on employing foreign labour.

5 Scope of Study

This research will focus on the Malaysian Construction Industry manpower issues. It is impossible to address the whole spectrum of manpower issue in the duration given. Therefore, this research will only be concentrated on the causes, impacts and ways to minimise the impacts on employing foreign labour in construction industry.

This research is conducted among the local construction company in Klang Valley where there is a more direct link to foreign workers in order to obtain more accurate and representative results. It is also believe that most of the foreign labour were employed in Klang Valley. This research is mainly on legal foreign labour in Malaysia as it is often difficult to obtain the information that involves the illegals due to various syndicates that protect them.

The aim was to generate a sample of approximately sixty (60) from construction organization that had recently involved in the project in Malaysia. Therefore, sixty (60) sets of questionnaires have been distributed out randomly to construction company in Klang Valley.

The lists of the populations of respondents are obtained from the relevant professional boards such as Construction Industry Development Board (CIDB), Malaysia Builder Directory and Builder’s Diary.

6 Justification of Study

Today, it is obvious that the foreign workers are part of Malaysian society. Their presence began to cause problems for the local population. From time to time, measures are taken to address specific problems arising out of foreign labour (legal and illegal) employment, but these measures are at times in contradiction with each other. Thus, the mixed and confused messages and signals are sent out.

Throughout the 1970s, no action was taken to address the issue of labour shortage and the infiltration of illegal foreign labour. It was only when the number of illegal became large and noticeable and the presence of foreign labour began to cause problems then steps were taken to address the problem.

Thus, this research is aim to investigate the existing Malaysia construction industry foreign labour issues. The focus is on the causes, problems or impacts on employing foreign labour in construction industry and the ways to minimise these impacts.

This research also aims to serve as basic study for the person in the construction industry to understand the manpower problems and to stress on foreign labour issue. In addition, it is hoped that the finding from this survey will provide some indications to the parties involve on construction industry on foreign labour issue.

7 Research Methodology

The research method used in conducting this study comprised of literature review and followed by a random questionnaire survey. The research literature review was framed around the existing Malaysia Construction Industry foreign labour issues. The basic concern throughout the review is to identify causes, impacts and to establishing the ways to minimise the impacts on employing foreign labour in construction industry.

The questionnaire method was conducted to collects the latest primary data from industry practitioners that accomplish with the research objectives. The primary data will be analysed through quantitative and qualitative approaches after considering the types of data and the research objectives.

The result for data analysis and interpretation will use to provide conclusions and recommendations. This research report will be ended with an overview conclusion for the thesis by answering the research aims and objectives together with constructive recommendations for the future research.

To conduct a systematically and thoroughly research, the following series of process has to be carried out to find the answer to the problems selected for this study.

Figure 1.1: Outline of the Research Methodology Process

8 Summary of Each Chapter

This study has been organized into 5 chapters as below:-

Chapter 1 outlines the introduction of this study. It includes the background of study, problem statement, scope and justification of study and the method to carry out this study. It also identified the aims and objectives of this research.

Chapter 2 consists of literature review. The foreign labour issues in construction industry have been highlighted and the causes, impacts on employing the foreign labour and measures proposed have been discussed in this chapter.

Chapters 3 discuss on the theoretical frame of work and together with research methodology that have been used to gather the information, the method of analysis and format for presenting the findings.

Chapter 4 focus on the analysis of the data colleted from the questionnaire survey and the findings are reported in this chapter. Due to easy reference and presentable, the result will be presented in tables, histogram, pie charts and others for better understanding.

Chapter 5 will provide the recommendations and conclusions to this study. This includes the discussion on the results of the finding and some recommendations and suggestions for future research.

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Data Analysis

Conclusions

Ways to Minimise the Impacts

Causes Employing Foreign Labour

Questionnaires (Data Collection)

Impacts on Employing Foreign Labour

Literature Review

Identify Research Problems