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It is not a secret that the tourism industry suffered massive job losses during the COVID-19 pandemic. The implication is significant, seeing that Malaysia’s tourism industry employs 3.6 million people out of a workforce of 15 million. As such, it is necessary to understand why these terminations occurred and if they violated the affected workers' rights. The article “Rights Awareness and COVID-19 Tourism Job Losses: Perspectives from Malaysia” examines the causes behind these terminations. These causes can range from retrenchment to several indirect causes.

Where a business remains operational, the appropriate mass termination strategy is retrenchment or instead of this, a voluntary separation scheme. In Malaysia, a retrenchment exercise undertaken with valid economic reasons (e.g. organisational restructuring, obsolete technologies, or financial hardship) and conducted in good faith constitutes a ‘just cause or excuse’ for termination under the Industrial Relations Act 1967. Retrenched employees are entitled to termination benefits, as prescribed under the Employment (Termination and Lay-Off Benefits) Regulations 1980.

However, a study by Sunway University's Associate Professor Dr Gan Joo-Ee and colleagues showed that many tourism workers were not formally retrenched during COVID-19. Rather, their termination occurred through a combination of indirect causes, notably, pay cuts and unpaid leave – accepted by the employees partly from loyalty and empathy for their employers’ plight. It was the prolonged financial implications of these measures that led to resignations. It would seem that many workers were put in a place where they had no choice but to resign. Consequently, they could not utilise any benefits they would have received had they been retrenched. This leads one to question, “Was it lawful to implement pay cuts and unpaid leave?” In 2020, the Malaysian Bar Council issued a circular to make clear that employers should not compel their employees to take unpaid leave or accept a pay cut. However, that didn’t mean employees couldn’t voluntarily agree to these measures. Many employees did just that!

Unfortunately, this undercurrent of informal workplace relations between tourism workers and their employers, hinged on loyalty, camaraderie and empathy (though commendable) could undermine workers’ interests during an economic crisis.  Their efforts to help their employers may have heavy consequences on their financial well-being. It may be unfair to assume that the pay cuts and unpaid leave were implemented to induce resignations – cost-cutting was necessary during the pandemic. Nonetheless, the employers certainly gained from avoiding termination benefits mandated by a retrenchment exercise.

Might tourism workers have responded differently if they were more aware of their rights? They could question the legality of the indirect measures or weigh the relative benefits of remaining employed against the eligibility under the employment insurance system, or they might pursue retrenchment benefits where none were offered. The lack of rights awareness significantly forecloses such options.

Thus, how might the rights awareness of tourism workers be improved? For starters, there should be laws that mandate the dissemination of labour rights by employers. Assuredly, it is not a radical idea when many developed countries already have such laws. For instance, similar requirements can be found in Australia’s Fair Work Act 2009. Alas, where are the activists to push for such reform in Malaysia?

 

Associate Professor Dr Gan Joo-Ee
School of Hospitality and Service Management
@email

This article has been adapted from Joo-Ee Gan, Joann P. S. Lim, Wai Ching Poon & Shantini Thuraiselvam (2023), Rights awareness and COVID-19 tourism job losses: perspectives from Malaysia, Current Issues in Tourism, DOI: 10.1080/13683500.2023.2203851