OPINION: The Human Resource Development Fund or HRD Corp has been a significant reservoir of resources aimed at enhancing the skills and competencies of the Malaysian workforce. Despite its noble intent, recent observations and reports have highlighted several concerns regarding the utilization and management of these funds, particularly in the banking sector.
Significant Unused Funds: HRDF has amassed substantial funds, yet a significant portion remains underutilized for the intended purposes.
Levy Collection: Employers with more than 10 Malaysian employees, the employer has to register for HRDF and pay 1% of monthly wages of employees across various sectors, including banking.
2023 Financial Overview: In 2023, HRDF collected 2.2 billion Ringgit but only expended RM1.8 billion on training programs.
Allocation Transparency: There is uncertainty about whether the RM1.8 billion spent on training is fully utilized for employer-facilitated training or government-conducted training for government projects.
Mandated Training: It is unclear if the government mandates employers to send employees for training as strictly as it enforces the levy upon employers.
Purpose Defeated: Without stringent rules, the purpose of HRDF is undermined.
Issues in the Banking Sector
Underutilization for B40 and M40 Employees: Employers, especially in the banking sector, who started paying the levy in 2022, are not fully utilizing HRDC programs for B40 and M40 employees.
Refusal to entertain Union Recommendations:
When NUBE realised that the bank management is not providing adequate training for its members, we decided to initiate the HRDC training programs.
In the previous year, the bank management reluctantly approved the HRDC programs.
However, recently, when NUBE facilitated its first OSH training, the bank management informed the union that funding and facilitation discretion lies with them and insist it is their prerogative, and refused to allow NUBE to continue facilitating HRDC programs.
Training for Lower Ranks: Employers refuse to send lower-rank employees for training and are unhappy when the union facilitates these efforts, claiming it is solely their responsibility.
Employer Claims: Employers argue they have the sole right to decide how the levy funds are spent since they are the ones paying it.
Joint Responsibility for Training
Fallacy of Sole Decision: Employers cannot decide on training needs without involving workers representative through NUBE for HRDC programs.
Priority on Knowledge and Skills: Workers prioritize being equipped with appropriate knowledge and skills to improve performance, productivity, and working conditions.
Joint Effort Required: Training responsibilities lie with both the management of the banks and NUBE. Training program’s needs, delivery, and evaluation should be conducted together.
Levy Funds Utilization
Misconception about Levy Funds: The funds remitted to HRDF are not solely at the discretion of management since these funds are from the profits generated by both employers and employees. Even the CEO’s wages are deducted for the levy.
Union Involvement: If CEOs can decide on their training, the union, representing its members who are also bank employees, should have a say in training decisions. Providing training for unionised workers is not the birthright of the management.
Quotas for Training: In the banking sector, management creates quotas similar to university admission quotas, favoring management staff over lower-rank staff.
Call for government action
Government-Linked Companies: These issues are occurring under the government’s watch and are being conveniently ignored.
Purpose of Upskilling and Reskilling: Upskilling and reskilling should enhance business performance and competitiveness, not serve as a money-making scheme or a platform for those in power.
Need for Investigation: Authorities should genuinely investigate to meet HRDF’s objectives, not just use audit reports to shift funds around. Transparency is crucial as many workers are not benefiting from the fund, and the income gap is widening.
Disagreement with employer appointments
Appointment of HRDF CEOs: NUBE strongly disagrees with giving employers the right to appoint HRDF CEOs as they have failed in their duties currently. If they had carried out their roles responsibly, there would not be discrepancies, and employees would receive the training they deserve.
Increase in Foreign Workers: The increase in foreign workers taking over roles, including top management, is evident.
Employers are not providing equal training opportunities to employees through HRDC programs. Management cites reasons such as manpower shortages, operational impacts, and fear of employees being poached by competitors.
This undermines the fundamental goal of HRDF and the collective progress of the workforce. We call for immediate and transparent action to ensure all employees benefit equally from HRDF training programs.
The only solution is for unions to be granted equal rights as employers to determine training programs for employees. A tripartite control of the HRDF, via the government, employers and the unions, is the only feasible, practical and reasonable way to ensure that the HRDF is fully utilised for the benefit of the employees and is not misused or squandered.
J Solomon is the General Secretary of NUBE