KUALA LUMPUR: Employers have raised concerns regarding the tenfold increase in maximum penalties for violations under the Occupational Safety and Health (Amendment) 2022 (OSHA) and the Factories and Machinery Act (Repeal 1967).
They fear that this substantial hike could be excessively burdensome for small businesses.
Employers are calling for a more balanced approach to ensure a safe work environment while considering the financial impact on smaller enterprises.
Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said while the amendment of OSHA was timely, the maximum penalty of RM500,000 was excessively high and should be reconsidered.
He said that Micro, Small, and Medium Enterprises (MSMEs), as well as self-employed individuals, would find it particularly challenging to afford such steep penalties.
"There are more than 90 per cent MSMEs in the country, which may not have the financial resources to have a comprehensive OSH programme at the workplace.
"Raising the penalty to RM500,000 for all does not make sense. A tiered penalty system based on the size and operations of the business could be a more viable option," he told the New Straits Times.
Syed Hussain said that imposing harsh penalties might not be the most effective approach.
Instead, he suggested that the government explore alternative mechanisms to assist industries in meeting safety and health standards.
The Malaysian Employers Federation (MEF) believes that the maximum penalty should only be utilised as a last resort, specifically against uncooperative employers who neglect to implement appropriate OSH procedures and safeguards, resulting in fatal workplace accidents.
Echoing Syed Hussain's sentiments, the Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai, acknowledged that while higher penalties could act as a potent deterrent, the significant increase would pose a particular challenge to SMEs already grappling with compliance costs.
He proposed a phased implementation or the introduction of support programmes aimed at assisting businesses in enhancing their safety measures without subjecting them to severe financial consequences, particularly SMEs.
"Increasing the penalty tenfold could potentially ensure a safer working environment and better attention to workers' welfare, but its effectiveness will also depend on the enforcement of the act and its regulations.
"Regular inspections, prompt action against violations and a transparent reporting system are essential to ensure that the threat of high penalties translates into real improvements in workplace safety.
"Employers and employees alike must be aware of the new regulations and understand their responsibilities," he said.
Soh said educational campaigns and training sessions could help inculcate a culture of safety within organisations, making the increased penalties more effective.
He added that providing support to SMEs to help them comply with safety regulations could enhance the overall effectiveness of the new penalties.
He said this support included financial assistance, access to safety training and resources for upgrading equipment and facilities as well as having clear and fair guidelines.
