STRICTLY CONFIDENTIAL

[For Private Circulation Only]

MINUTES OF THE ANNUAL GENERAL MEETING OF THE MALAYSIAN EMPLOYERS FEDERATION HELD ON THURSDAY, 28 JULY 2016 AT 10.00 A.M.

AT HOLIDAY VILLA SUBANG (CLASSICS BALLROOM) NO. 9, JALAN SS 12/1, SUBANG JAYA, 47500 PETALING JAYA

PRESENT NOMINEES (ORDINARY MEMBERS)

Antara Holiday Villas Sdn. Bhd. Tan Sri Azman Shah b Dato’ Seri Haron (Chairman)

A. P. Search Management Recruitment Sdn. Bhd. Hj. Mohammed Amin bin Aziz

Auto V Corporation Berhad Hon Poh Chow

Bank Kerjasama Rakyat Malaysia Bhd. Mohd. Farid Shah Mohd. Basir

Benta Wawasan Sdn. Bhd. Zulkifli Usof

Conweld Engineering Sdn. Bhd. Low Man Fook

Denso (M) Sdn. Bhd. Mohamad Roslan Mohamad Nasir

Empire Manufacturing Sdn. Bhd. Tan Boon Hua

Excel Minds Consultancy Sdn. Bhd. Abdul Wahab bin Abu Bakar

Gamuda Bhd. Lai Tak Ming

Kask Group of Companies Dato’ Kamil Noor Ariff

Malaysian Directors Academy (MINDA) Dato’ Abdul Aziz bin Abu Bakar

Nisseisanko Venture Lt. Kol. (K) Dr. Sam Quah Sin Chye

Pahang Lin Siong Motor Co. Bhd. Manikam a/l Marimuthu

Pembangunan Sumber Manusia Bhd. Lim Kah Cheng

Perbadanan Pengurusan PN8639 Zulkifli bin Othman

Petroliam Nasional Bhd. - Petronas Dato’ Raiha Azni Abdul Rahman

R. Usha Devi & Associates R. Usha Devi a/p R. V. Rajan

Ramadass & Associates A. Ramadass

Renesas Semiconductor KL Sdn. Bhd. Zulkifly bin Abdul Rahman

Sama-Sama Hotel, KL International Airport Rozainor Sani Abdullah Sani

Satake Technologies Sdn. Bhd. Dato’ Palaniappan a/l Joseph

PERSEKUTUAN MAJIKAN-MAJIKAN MALAYSIA MALAYSIAN EMPLOYERS FEDERATION (Reg. No: 1357-SELANGOR)

HEAD OFFICE: 3A06 – 3A07, Block A, Pusat Dagangan Phileo Damansara II, No. 15, Jalan 16/11, Off Jalan Damansara, 46350 Petaling Jaya Selangor, Malaysia. P.O. Box 11026, 50732 Kuala Lumpur, Malaysia. Tel: 603-7955 7778 Fax: 603-7955 6808/7955 9008 E-mail: mef-hq@mef.org.my www.mef.org.my

NORTHERN REGION – 379-D, Jalan Hajjah Rehmah, 11600 Jelutong, Penang Tel: 604 - 6599 236 / 604 - 6596 909 Fax: 604 - 6599 873 E-mail: mefpg@mef.org.my SOUTHERN REGION – No.17, Jalan Cantik 6, Taman Pelangi Indah, 81800 Ulu Tiram, Johor. Tel: 607-226 4776 Fax: 607-226 5773 E-mail: mefjb@mef.org.my EAST COAST REGION – B-8 & B-10, First Floor, Jalan Haji Ahmad 3, Sri Pahang Business Centre 25300 Kuantan, Pahang Darul Makmur. Tel: 09-5124373 Fax: 09-5124251 E-mail: mefktn@mef.org.my PERAK OFFICE – A-1-3, 1st Floor, Wisma MFCB, No.1, Persiaran Greentown 2, Green Town Business Centre, 30450 Ipoh, Perak. Tel: 605-255 7778 / 605-255 9778 Fax: 605-255 2778 E-mail: mefip@mef.org.my EAST MALAYSIA REGION – Lot No 95, Jalan Nyiur, 93200 Kuching, Sarawak. Tel: 082-247 027 Fax: 082-247028 E-mail: mefkch@mef.org.my SABAH REGION – 3rd Floor, Lot No 1, Block A, Damai Point, 88300 Kota Kinabalu, Sabah

/agm mins28072016

2

NOMINEES (ORDINARY MEMBERS) (cont’d)

SRT-EON Security Services Sdn. Bhd. Hj. Razali bin Dato’ Hj. Rahmat @ Ali Mhd.

Summit Hotels Management Sdn. Bhd. Lam Hin Choon

SVT Resources Sdn. Bhd. Dato’ Dr. Syed Hussain b Syed Husman, J.P.

Sweet Cherry Enterprise (M) Sdn. Bhd. Chan Mok Weng

UDA Holdings Bhd. Hishamuddin Mon

Umicore Malaysia Sdn. Bhd. Tony Wong

Universiti Tunku Abdul Rahman Wong Lee Lan NOMINEES (ASSOCIATION MEMBERS)

Association of Insurance Employers (AIE) Mohd. Syukri Ahmad Sudari Commercial Employers’ Association of Peninsular Malaysia (CEAPM)

Dr. Michael Chiam Tow Hui

Association of Hotel Employers (AHE) Christopher S. Raj Sabah Employers’ Consultative Association (SECA)

Alan Khoo Choom Kwong

Sarawak Timber Association (STA) Peggy Chew Being Being The Malayan Agricultural Producers Association (MAPA)

Hj. Mohamad Audong

DULY AUTHORISED REPRESENTATIVES (ORDINARY MEMBERS)

Abex Medical System Sdn. Bhd. Low Sook Heng

Affin Holdings Berhad Kamarul Aiman bin Abdullah

Agensi Kaunseling dan Pengurusan Kredit Mohd. Zuraidi bin Zakaria

Air Products Malaysia Sdn. Bhd. Samy Parwathy

Aluminium Company of Malaysia Bhd. Abu bin S. E. Mohammad Shariff

Altel Communications Sdn. Bhd. Noorasmah Mohd. Ali

Ancom Berhad Susan Lau Siew Ho

Ann Joo Steel Berhad Ghwee Kok Thai

APM Corporate Services Sdn. Bhd. James Tan

Asian Strategy & Leadership Institute Melissa Ong

Bank Muamalat Malaysia Berhad Sharifah Noor Zahida Syed Abdul Zahid

Bank Pertanian Malaysia Berhad Renie Hasnidar bt. Hashmi

/agm mins28072016

3

DULY AUTHORISED REPRESENTATIVES (ORDINARY MEMBERS) (cont’d) Bermaz Motor Sdn. Bhd. Siti Sapura

Bollore Logistics (M) Sdn. Bhd. Carolene Anthony Construction Labour Exchange Centre Berhad

Razali Tamby Chik

CPN Ventures Sdn. Bhd. Ann Santhagrasan

Denka Infrastructure Malaysia Sdn. Bhd. Cecilia Chiang Tsuey Fen DTZ Debenham Tie Leung (Malaysia) Sdn. Bhd.

Saraswathy Maniam

F & N Ice Cream Manufacturing (M) Sdn. Bhd.

See Li Li

Fuji Xerox Asia Pacific Pte. Ltd. Melissa Yee

Hatten Asset Management Sdn. Bhd. Hannah Sta Maria

Hektar Property Services Sdn. Bhd. Rositah bt. Yahaya

I & P Group Sdn. Berhad Bakhtiar Baharuddin

Idaman Unggul Berhad Hani Syamira Abdul Hamid

K.T.S. Holdings Sdn. Bhd. Josephine Keoh

Koperasi Kakitangan Petronas Bhd. Ahmad Hazil bin Abd. Lateff

Koperasi Serbaguna Iman Malaysia Berhad Rina Aktavia bt. Amril

KPJ Healthcare Bhd. Datin S. Fauziah Jamaluddin

Kulim (Malaysia) Berhad Mahat bin Miran

Kumpulan Perunding (1988) Sdn. Bhd. Hazimah Hamid

Kumpulan Semesta Sdn. Bhd. Mohd. Ansharullah bin Ismail

Land & General Bhd. Sue Loh Su Hoon Le Apple Boutique Hotel (KLCC) Sdn. Bhd.

Hafina bt. Abu Bakar

Lexis Hotels & Resorts Sdn. Bhd. Tiu Kwe Yee

Malayan United Management Sdn. Bhd. Hellen Tan Soek Peng Malaysia Marine and Heavy Engineering Sdn. Bhd.

Sharifah Shahirah Albar bt. Syed Museb Albar

Metronic Global Bhd. Vincent Set

Mines Excellence Golf Resort Berhad Mohammad bin Ishak Mitsubishi Electric Sales Malaysia Sdn. Bhd.

Shafizatul Akmar bt. Shaari

MyCreative Ventures Sdn. Bhd. Nadia Muadzam

Nestle Products Asran Rozain

Nitkertz (Malaysia) Sdn. Bhd. Navanethan a/l Narayanasamy Novum Organum Publishing House (M) Sdn. Bhd.

Chong Chee Keong

/agm mins28072016

4

DULY AUTHORISED REPRESENTATIVES (ORDINARY MEMBERS) (cont’d) NSK Bearings (Malaysia) Sdn. Bhd. Shubli bin Harun

ON Semiconductor Malaysia Sdn. Bhd. Chellappa K. Kalimuthu

Pakaian Saling Erti Noorzaliya bt. Mohd. Yusop

Palm-Oleo (Klang) Sdn. Bhd. Dr. Lee Poh Hoon

Pengurusan Aset Air Berhad Zulhayati binti Yahya

Permodalan Nasional Berhad Akmal Hamdi bin Hassan

Permodalan Negeri Selangor Berhad Mohd. Yusof bin Joned

Pertama Ferroalloys Sdn. Bhd. Steven Chang Eng Soon Pertubuhan Berita Nasional Malaysia (BERNAMA)

Muhd. Amirulhadi bin Suradi

Perunding Hashim & NEH Sdn. Bhd. Rosley b. Hussin

PNSB Water Sdn. Bhd. Zalina bt. Mat

Pos Malaysia Bhd. Fikri bin Ahmad

Qualitas Medical Group Sdn. Bhd. Maimudas Hussain

Ranhill Bersekutu Sdn. Bhd. Husni Ariff Shah bin Abdul Halim Shah

RPM Engineers Sdn. Bhd. Ahmad Ashrin bin Abdul Jalil SDB Properties Sdn. Bhd. (Hotel Maya Kuala Lumpur)

Erlianny Tekoh

Shapadu Corporation Saif Annwar b. Ahmad Saifuddin

Shriro (Malaysia) Sdn. Bhd. Zaiful Niza

Sime Darby Plantation Sdn. Bhd. Rosli Yacop

Sony EMCS (M) Sdn. Bhd. Mohd. Mahdi Md. Kamil

Southern Management (M) Sdn. Bhd. Rick Teng

Standard Chartered Bank Malaysia Bhd. Florence Foo Wen Shin Superior Energy Services Malaysia Sdn. Bhd.

Anita Soosay

Syarikat Percetakan Yayasan Islam Terengganu Sdn. Bhd.

Rusdi bin Muda

Tadmax Resources Berhad Danem @ Thanam

Tanjong Management Services Sdn. Bhd. Jayakumar Muniandy

Tatsumori (M) Sdn. Bhd. Nurhariati bt. Mohd. Arif The ICLIF Leadership and Governance Centre

Karen R. Shepherdson

The Royale Bintang Kuala Lumpur Kamaruddin Baharin

Total Logistics Services (M) Sdn. Bhd. Raja Dzulfitrie bin Raja Sa’ad Tradewinds International Insurance Brokers Sdn. Bhd.

Irene Chin Moi Yin

Tunku Abdul Rahman University College Chan Yoke Ying

/agm mins28072016

5

DULY AUTHORISED REPRESENTATIVES (ORDINARY MEMBERS) (cont’d) Uda Dayaurus Sdn. Bhd. Rahimah Khalid

UEM Edgenta Bhd. Jamal Nasir Khan

UMW Holdings Bhd. Mohd. Nasir Ujang

United Malacca Bhd. Katherine Tan Lee Chu

Universiti Selangor Hj. Shamsul Azhar bin Mohd. Yusof

Universiti Tun Abdul Razak Sdn. Bhd. Zuleikha Ezrin bt. Zulkifli

Volvo Malaysia Sdn. Bhd. Selvanathan Padmanathan

Weststar Aviation Sdn. Bhd. Deva Param

Yee Lee Edible Oils Sdn. Bhd. Dr. Teh Choong Hee

Zurich Insurance Malaysia Bhd. Rosesilawati Ismail DULY AUTHORISED REPRESENTATIVES (ASSOCIATION MEMBERS)

AXA Affin General Insurance Bhd. Safiras Mohd. Ibrahim Financial Planning Association of Malaysia (FPAM)

Leong Poh Choo Ee

Great Eastern Life Assurance (Malaysia) Bhd.

Dennis Tan Koh Tiong

Malaysia Smelting Corporation Bhd. Hamidah Hayati bt. Abdul Hamid

Malaysian Association of Hotels (MAH) Ron Hasni Yusoff Malaysian Plastics Manufacturers Association (MPMA)

Chan Sing Choo

MNRB Holdings Bhd. Fuzaidah Yusof Persatuan Perkhidmatan Kawalan Keselamatan Malaysia (PPKKM)

Assyanur Nasyrah bt. Dato’ Ishak

Tune Insurance Malaysia Berhad Kathryn Kok

OBSERVERS (ORDINARY MEMBERS)

Atarek Kamil Ibrahim & Co. Tuan Muhamad Firdaus Tuan Omar

Atarek Kamil Ibrahim & Co. Nur Adilah Jamil

Fuji Xerox Asia Pacific Pte. Ltd. Amy Yong

Fuji Xerox Asia Pacific Pte. Ltd. Max Leong

Hektar Property Services Sdn. Bhd. Muhazimawatinita bt. Mohamad Koperasi Serbaguna Iman Malaysia Berhad

Muhammad Adib

/agm mins28072016

6

OBSERVERS (ORDINARY MEMBERS) (cont’d)

Novum Organum Publishing House (M) Sdn. Bhd.

Jerrica Yip

Permodalan Nasional Berhad Mohammad Shazwan b. Mohammad Lukman Superior Energy Services Malaysia Sdn. Bhd.

Wan Norhayati Jufri

Sweet Cherry Enterprise (M) Sdn. Bhd. Jarvis Yap Yik Yuan Syarikat Percetakan Yayasan Islam Terengganu Sdn. Bhd.

Mohd. Azam Ishak

Syarikat Percetakan Yayasan Islam Terengganu Sdn. Bhd.

Ramly Draman

Tadmax Resources Berhad Nur Idana Maarof OBSERVERS (ASSOCIATION MEMBERS)

Persatuan Perkhidmatan Kawalan Keselamatan Malaysia (PPKKM)

Dato’ Sri Mustapa Ali

Persatuan Perkhidmatan Kawalan Keselamatan Malaysia (PPKKM)

Shah Jahankhir Hameed

MEF SECRETARIAT

Datuk Hj. Shamsuddin bin Bardan Executive Director Peter Iruthayaraj a/l D. Pappusamy Special Functions Adviser to the ED Venugopal a/l Muniandy General Manager - Industrial Relations Goh Seng Wing Senior Consultant – Industrial Relations Lee Yoke Wan Senior Manager - Research & Information Haslena bt. Ismail Senior Manager - Membership & PR Wong Chee Mun Senior Manager - Information Technology Yap Chui Choo Manager - Admin. & Finance Maslifa Masmuda Sr. Research Analyst - Survey & Information Goh Lea Koon Sr. Research Analyst - Survey & Information Wong Ping Sing Membership & PR Executive Nurul Afiqah Nordin Membership & PR Executive Nur Iffah Auni Mohammad Satari Finance & Admin Executive Noor Hidayah Zulkafli Finance & Admin Executive Mohd. Remie Mahmood IT Executive Norkhalidah Mohd Nordin Marketing Executive Jeannie Tan Executive Assistant Rozameza Nawawi Senior Clerk

/agm mins28072016

7

The President, Tan Sri Azman Shah b Dato’ Seri Haron, welcomed all present to the Annual General Meeting of the Federation and called the meeting to order. The President called upon the Executive Director (ED) to establish if there was quorum for the Annual General Meeting. The ED said there was a quorum to commence the AGM. The President informed the meeting that notice of the AGM has already been sent to the members and suggested that it be taken as read. The meeting was declared open. The first item on the Agenda was the President’s Address. The ED invited the President, Tan Sri Azman, to deliver his address.

ITEM 1 - PRESIDENT’S ADDRESS

1.1 The President presented his address, a copy of which is enclosed in Appendix A.

ITEM 2 - TO CONFIRM MINUTES OF THE ANNUAL GENERAL MEETING HELD ON 20.8.2015 2.1 The minutes of the Annual General Meeting (AGM) held on 20.8.2015 have

been sent to the members and the President suggested that the minutes be taken as read.

2.2 The ED informed the meeting that the attendance of Encik Mustafa bin Musa

from Kuantan Port Consortium Sdn Bhd was not recorded in the minutes of AGM held on 20.8.2015. He proposed that the attendance list be amended to include Encik Mustafa as Duly Authorised representative at the AGM held on 20.8.2015. He also reminded members present at the AGM to register their attendance, otherwise the name will not be recorded in the minutes of AGM.

Subject to the above amendment, the minutes of AGM held on 20.8.2015 were

confirmed on the proposal of Dato’ J Palaniappan from Satake Technologies Sdn Bhd and seconded by Tuan Hj Razali b Dato’ Hj Rahmat @ Ali Mhd from SRT-EON Security Sdn Bhd.

A motion was unanimously carried out to confirm the minutes of the AGM

held on 20.8.215.

ITEM 3 - MATTERS ARISING FROM MINUTES OF THE ANNUAL GENERAL MEETING HELD ON 20.8.2015 3.1 Page 8, Agenda Item 3 – Review of Labour Legislations 3.1.1 National Minimum Wages

The meeting was informed that at the Budget 2016 presentation, the Prime Minister announced that the minimum wages for employees will be reviewed w.e.f. 1 July 2016 as follows :-

/agm mins28072016

8

The Government gazetted the Minimum Wages Order 2016 on 29.4.2016. MEF together with other associations submitted a joint memorandum on deferment of implementation of the reviewed National Minimum Wages to the Prime Minister, MoHR and relevant Government bodies on 18.1.2016. The MoHR replied to MEF on 4.2.2016 stating that there would be no deferment on the implementation date on the new rates of minimum wages. The Minister of MoHR stated that the grace period of 8 months from the date of announcement to the date of implementation was adequate for employers to make the adjustments.

3.1.2 Employees’ Social Security (Amendment) Act 2015 3.1.2.1 The Employees’ Social Security (Amendment) Act 2015 came into force on

20.5.2016. The relevant amendments to the Act were :-

• Sub-section 5(1) - all employees in industries to which Act 4 applies shall be insured under Act 4 irrespective of their amount of wages.

• by inserting after sub-section (1) as re-numbered the following sub-

section : • (2) Notwithstanding sub-section (1), if the wages of an employee at any

time exceed four thousand ringgit a month, his wages shall for the purposes of this Act be deemed to be four thousand ringgit a month.

3.2.1.2 One of the issues faced by members was the inadequacy of time to revamp the payroll system to include the new rates of contribution to SOCSO. Some

/agm mins28072016

9

members received notice from SOCSO on penalties for late payments of the new rates on the SOCSO contributions. When the members contacted SOCSO office on the matter, they were informed that it was computer generated. Members requested SOCSO for extension period to submit the payments on the new contribution rates to SOCSO.

Members were informed that SOCSO had given a grace period of up to

October 2016 to register newly covered employees and to remit contributions based on the new threshold clause of RM 4,000.

3.1.3 Employment Insurance Scheme (EIS) The Government proposed to set up the Employment Insurance Scheme (EIS).

MEF wrote to the Minister of HR on the concerns of the employers on the setting up of the proposed EIS. Following the meetings with MoHR and MTUC on the subject matter, MEF proposed to the MoHR and MTUC the savings scheme as an alternative to the proposed EIS. A joint memorandum between MEF and MTUC was submitted to MoHR on the subject matter. MEF held the High-level meeting of employers and business organisations on 14.7.2015 on the subject matter.

The proposed EIS may be tabled at Parliament sitting. At the recent

International Labour Conference held in Geneva, MEF representatives, Encik A Ramadass, Vice-President and the Executive Director had discussion with Y.Bhg. Dato’ Sahar, Deputy Secretary General, MoHR on the proposed EIS. During the discussion in Geneva, MEF representatives were informed that it was proposed that EIS be set up by transforming the HRDF to manage and run the proposed EIS and HRDF will cease to be managing training fund. Under the proposed scheme the PSMB Act 2001 will be amended to cover all industries and all employees in Malaysia. In this regard the employers’ levy will then be reduced from 1% to 0.25% of wages and all employees are required to contribute 0.25% of monthly wages.

Following the presentation, the President asked whether there were any

questions/feedback from the floor on the proposed EIS. The questions /feedback from the floor were : -

(i) Encik Christopher Raj said that there are many issues on the labour

laws that the Government need to review, one of which is the minimum wages. The minimum wages are reviewed by the Government every two years and this has increased the cost of doing business for the employers. On the proposed establishment of 30% of employers’ contributions to a common pool by HRDF, MEF should strongly object to the conversion. As to the proposed EIS, he strongly objected to it and hoped that MEF and the employers strongly objected to the implementation of the proposed EIS.

/agm mins28072016

10

(ii) Encik Rosli Yacop from Sime Darby Plantation Sdn Bhd informed the meeting that when HRDF was introduced, the plantation industry was not covered. The Executive Director replied that the HRDF does not cover all sectors of economy. If it is converted to EIS, all employers and employees irrespective of economic sector need to contribute to the scheme.

(iii) Encik Zulkifly b Abdul Rahman from Renesas Semiconductor KL Sdn Bhd said that HRDF is the only resources to train employees. It is not suitable to convert HRDF to EIS. He objected to the proposed EIS and to maintain HRDF.

(iv) Encik Jamal Nasir Khan from UEM Edgenta Bhd said that the objectives of HRDF and EIS were different. HRDF was to train and develop skills of employees. He objected to setting up of the proposed EIS.

(v) Dato’ J Palaniappan from Satake Technologies Sdn Bhd said that employers are trying to minimise employing foreign workers as a way forward. HRDF was to upskill the employees. He hoped that the employers would unanimously object the setting up of the proposed EIS.

(vi) Encik Mohd Farid Shah Bin Mohd Basir from Bank Kerjasama Rakyat

Malaysia Bhd objected to the setting up of the proposed EIS as it increases the cost of doing business; create another layer of bureaucracy and safety net.

(vii) Encik Lai Tak Ming from Gamuda Bhd, and member of the Master Builders Association, stated the employers should not support the proposal to set up EIS. HRDF should maintain its objectives and focus on skills development for the employees. He objected to incorporate EIS into HRDF.

(viii) Lt. Kol (K) Dr Sam Quah Sin Chye from Nisseisanko Venture strongly objected to the implementation of proposed EIS as it will further escalate the cost of operations for the employers. EIS is basically an insurance scheme and should not pay for the recalcitrant employers. HRDF should maintain its role in upskilling the skills of the employees.

(ix) Following the feedback gathered from the floor, the President posed the following questions to the floor for response :-

Q1 : Proposal to convert HRDF to EIS - Yes / No

Q2 : To maintain HRDF for training purposes - Yes / No

/agm mins28072016

11

Ans1 : Majority of the representatives present at the AGM strongly

objected the proposal to covert HRDF to EIS. Ans2 : Majority of the representatives present at the AGM agreed that

HRDF should maintain its objectives to provide skills training to employees.

(x) Encik Abdul Wahab Abu Bakar from Excel Minds Sdn Bhd agreed that HRDF should maintain its role to provide training for the employees instead of converting it to become EIS agency. HRDF should support the transition training for the retrenched employees.

3.1.4 Trans Pacific Partnership Agreement (TPPA) The TPPA was signed on 4.2.2016 in Auckland, New Zealand. It was still not

clear on whether TPPA will eventually be implemented. If Mr Donald Trump is elected as the President of USA the TPPA may not be implemented as he had objected to TPPA. Ms Hillary Clinton also had expressed reservations on TPPA. If implemented the TPPA will have impact on major amendments to the labour legislations.

3.1.5 MEF Sabah Regional Office

MEF purchased a property in Kota Kinabalu to be used as the MEF Sabah regional office. The Sabah regional office is located at 3rd Floor, Lot No. 1, Block A, Damai Point, 88300 Kota Kinabalu, Sabah. Cik Nur Taskin, Associate Consultant-IR will man the Sabah Regional office. The Sabah regional office will commence operations on 23.8.2016.

ITEM 4 - TO CONSIDER THE REPORT OF THE COUNCIL 2015 4.1 The Report of the Council for the year 2015 as contained in the Annual Report

2015 pages 4 to 92 had already been circulated to all members. The President suggested that the Report be taken as read. The President then invited questions from the floor on the Report of the Council. As there was no question from the floor on the Report, the Report of the Council for the year 2015 was endorsed on the proposal by Lt. Kol (K) Dr Sam Quah Sin Chye from Nisseisanko Venture and seconded by Tuan Hj Razali b Dato’ Hj Rahmat @ Ali Mhd from SRT-EON Security Services Sdn Bhd.

A motion was passed that the Report of the Council for year 2015 be

unanimously adopted.

/agm mins28072016

12

ITEM 5 – TO CONSIDER AND IF AGREED, APPROVE THE ANNUAL BALANCE SHEET, THE STATEMENT OF RECEIPTS & PAYMENTS AND THE INCOME & EXPENDITURE ACCOUNTS FOR THE FINANCIAL YEAR 1.1.2015 TO 31.12.2015 DULY AUDITED BY THE AUDITORS

5.1 The Annual Balance Sheet, Financial Statement containing the statement of receipts and payments and the income & expenditure accounts for the financial year 1.1.2015 to 31.12.2015 for the Federation and the Group were duly audited by the auditors. Copies of the report on the Financial Statement 2015 for the Federation and the Group had already been circulated to all members. The President invited Tuan Hj Mohammed Amin Aziz, Honorary Treasurer, MEF to brief the meeting on the Income & Expenditure Accounts of MEF.

5.2 Tuan Hj Mohammed Amin Aziz, Honorary Treasurer, said that despite 2015

being a challenging year, the financial performance of the Federation was healthy. There was a shortfall of 2% on total income as against the budgeted income. The surplus income before tax for 2015 was RM1.5 million. The meeting was informed that about 40% of the total income was from annual subscription fees. He hoped that members will support the Federation by participating in the training programmes. As of-to-date MEF have purchased properties in Penang, Ipoh, Johor Bahru, Kuantan, Kuching, Sarawak and Kota Kinabalu, Sabah as MEF regional offices.

5.3 Lt. Kol (K) Dr Sam Quah Sin Chye, Chairman of MEF Audit Committee, commended on the Federation’s healthy financial performance and measures taken by the Secretariat on the financial performances.

5.4 Following the above, the report on the Financial Statements for the year 2015

of the Federation and the Group was adopted on the proposal by Lt. Kol (K) Dr Sam Quah Sin Chye from Nisseisanko Venture and seconded by Encik Christopher S Raj from Association of Hotel Employers (AHE).

5.5 The meeting unanimously endorsed and adopted the report on the Annual Balance Sheet and Financial Statement of the Federation and the Group for the financial year 1.1.2015 to 31.12.2015.

ITEM 6 – TO CONSIDER AMENDMENTS TO MEF CONSTITUTIONAL RULES 6.1 Requisite notice of the amendments to the MEF Constitutional Rules were

circulated to the members together with the notice of meeting. The ED explained that the amendments to the MEF Constitutional Rules were on housekeeping and to send circulars, annual reports to members via electronics means instead of currently by postal services so as to reduce cost of printing and postal services.

/agm mins28072016

13

6.1.1 The amendments to the MEF Constitutional Rules have been proposed and seconded to the MEF Council. Encik A Ramadass, MEF Vice-President proposed the amendments to the MEF Constitutional Rules and the proposed amendments were seconded by Tuan Hj Mohammed Amin Aziz, MEF Honorary Treasurer. The Council recommended the proposed amendments to the MEF Constitutional Rules be tabled at the MEF AGM.

6.1.2 The ED presented the proposed amendments on the MEF Constitutional Rules as follows :-

(i) Rule 5 : Interpretation Clause It is proposed that Rule 5.1 be amended as follows :-

(a) “the Federation” shall mean the Persekutuan Majikan Malaysia, the Malaysian Employers Federation and by its acronym “MEF”.

Rationale :

To clarify that ‘the Federation’ also refers to the ‘Persekutuan ajikan-Majikan Malaysia’ and by the acronym ‘MEF’.

(l) ‘in writing’ shall mean written, printed, typed, lithographed,

visibly expressed or retrieved in all or any of these modes of representing or reproducing words in the English language including but not limited to the electronic media.

Rationale :

To enable the Secretariat to send notices and the relevant documents to the members through the electronic media on all matters including matters required for the Annual General Meeting and Extraordinary General meeting.

(ii) Rule 17 : Composition of Council It is proposed that Rule 17.1 (h) – the Immediate Past President

under Rule 18.6 be deleted. Rationale : In practice the position is redundant. Immediate Past President may

still be part of the MEF Council by being appointed as the President Emeritus.

/agm mins28072016

14

(iii) Rule 18 : Personnel of Council

It is proposed that Rule 18.1 – an Honorary Secretary be deleted.

an Honorary Secretary hereinafter referred to as the Principal Office Bearers who shall hold office until the conclusion of the next following Annual General Meeting at which elections are held.

Rationale :

The functions of Honorary Secretary are redundant as the functions are carried out by the Executive Director who is also the Secretary of the Council.

Provided that the Council may at any time appoint such Honorary

Secretary and where such Honorary Secretary is so appointed, then any other staff assigned duties as Secretary of the General Meeting and or Council shall act on his instructions in respect of all functions and duties assigned to the Honorary Secretary under these Constitutional Rules or assigned by the Council, and the Council may at any time rescind such appointment.

Rationale :

Consequential amendments.

(iv) It is proposed that Rule 18.6 - Immediate Past President be deleted.

Rule 18.6 states that :- A person who retires from office as President shall ipso facto continue

to serve on the Council albeit as Immediate Past President until he is succeeded in office by the next Immediate Past President. The Immediate Past President serves on the Council in an ex-officio capacity.

Rationale :

Consequential amendments.

(v) It is proposed that Rule 18.8 - The Honorary Secretary be deleted.

Rule 18.8 states that –

The Honorary Secretary where one is appointed, shall be responsible for the timely preparation of minutes or causing minutes to be timely prepared of General Meetings and of the Council, the timely circulation of such minutes issuing notices of their meetings, recording of attendances at meetings and for ensuring that decisions taken at these meetings or by the Council are

/agm mins28072016

15

expeditiously implemented and or acted upon by all parties concerned in the context of such decisions. The Council may also assign additional responsibilities and duties to the Honorary Secretary.

Rationale :

Consequential amendments.

(vi) Rule 19 – Council Meetings

It is proposed to insert Rule 19.1 as follows :-

Notice of meeting shall be delivered personally or sent by mail or electronic media to each Council member at the address as shown by the records of the Federation. If mailed, such notice shall be deemed to be delivered when deposited in the mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by electronic media, the notice of a meeting shall be deemed to be delivered when the notice is tagged sent by the software.

Rationale :

To enable notice of Council meetings and relevant documents be sent through electronic means. Currently MEF Council meetings are paperless.

(vii) Rule 21 – Annual General Meeting

It is proposed to insert Rule 21.2 as follows :- Notice of the Annual General Meeting and the relevant documents as

stated in Rule 21.1 (i) to (iv) above shall be delivered personally or sent by mail or electronic media to each member at the address as shown by the records of the Federation. If mailed, such notice and the relevant documents shall be deemed to be delivered when deposited in the mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by electronic media, the notice and the relevant documents shall be deemed to be delivered when the notice with the relevant documents is tagged sent by the software.

Rationale : To enable notice of Annual General Meeting and the relevant

documents to be sent to the members through electronic means.

/agm mins28072016

16

(viii) It is proposed to insert Rule 21.7 as follows :- Not less than 21 days notice shall be given of the Extraordinary General

Meeting and the provisions of Rule 21.2 shall apply pari passu to an Extraordinary General Meeting.

Rationale : To enable notice and relevant documents of Extraordinary General

Meeting to be sent to members through electronic media.

(ix) Rule 32 – Notice to Members

It is proposed to insert Rule 32.1 as follows :-

All notices sent or required by these Constitutional Rules to be sent to the Members shall be deemed to have been duly served if sent by the Federation either personally or through the post or through the electronic media, addressed to Members at the address as shown in the Register. If mailed, such notice and the relevant documents shall be deemed to be delivered when deposited in the mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by electronic media, the notice and the relevant documents shall be deemed to be delivered when the notice with the relevant documents is tagged sent by the software.

Rationale :

To provide that notices and relevant documents deemed to be delivered if posted through the mail or tagged sent by software if delivered by electronic media.

6.2 The President then asked whether there were any questions from the floor on

the above proposed amendments to MEF Constitutional Rules.

6.3 The following were recorded on the above proposed amendments to MEF Constitutional Rules :-

(i) Rule 5 : Interpretation Clause

To amend Rule 5.1

A motion was unanimously passed to amend the provisions of Rule 5.1(a) and (l) of MEF Constitutioanl Rules as follows :-

/agm mins28072016

17

5.1(a) “the Federation” shall mean the Persekutuan Majikan Malaysia, the Malaysian Employers Federation and by its acronym “MEF”.

5.1(l) ‘in writing’ shall mean written, printed, typed, lithographed,

visibly expressed or retrieved in all or any of these modes of representing or reproducing words in the English language including but not limited to the electronic media.

(ii) Rule 17 : Composition of Council It is proposed that Rule 17.1(h) – the Immediate Past President

under Rule 18.6 be deleted. Q1 : Encik Lim Kah Cheng from Pembangunan Sumber Manusia Bhd

enquired why the deletion of the Immediate Past President and the President Emeritus. Weren’t they part of MEF Council?

Ans1 : The Executive Director said that the Immediate Past President

and the President Emeritus are part of MEF Council and they can attend the Council meetings.

Q2 : Encik Lim Kah Cheng from Pembangunan Sumber Manusia

Bhd proposed the position of the Immediate Past President be maintained so as to enrich the work of the Council.

Ans2 : The Executive Director explained that currently there are more than 21 Council members and Association Members and an additional 3 eminent persons invited by the President under Rule 17.2 of MEF Constitutional Rules in MEF Council.

The President said that the President Emeritus was the late

Dato’ Dr Mokhzani. Q3 : Encik Lai Tak Ming from Gamuda Bhd enquired whether there

was any reason to remove the position of the Immediate Past President?

Ans3 : The Executive Director replied that there is no need to maimtain

the position of Immediate Past President in the MEF Constitutional Rules as the MEF past president may be appointed as MEF President Emiratus.

A motion was put to the floor to delete the provisions of Rule 17.1 and Rule

18.6 – the Immediate Past President of MEF Constitutional Rules. The result of the votes for the motion to delete the provisions of Rule 17.1 and Rule 18.6 of MEF Constitutional Rules were as follows :-

/agm mins28072016

18

Agreed to delete Rule 17.1 and Rule 18.6 - 54 votes from the floor

Disagreed to delete Rule 17.1 and Rule 18.6 - 17 votes from the floor

The meeting was informed that 54 representatives present at the AGM agreed to delete Rule 17.1 and Rule 18.6 of MEF Constitutional Rules as against 17 representatives present at the AGM.

The meeting by majority decided to delete Rule 17.1 and Rule 18.6 of MEF

Constitutional Rules. A motion by majority was passed to delete Rule 17.1(h) and Rule 18.6 of

MEF Constitutional Rules as follows :-

Rule 17.1(h) - the Immediate Past President under Rule 18.6 Rule 18.6 – Immediate Past President

A person who retires from office as President shall ipso facto continue to serve on the Council albeit as Immediate Past President until he is succeeded in office by the next Immediate Past President. The Immediate Past President serves on the Council in an ex-officio capacity.

(iii) Rule 18 : Personnel of Council

To delete Rule 18.1 – an Honorary Secretary A motion was put to the floor to delete Rule 18.1 of MEF

Constitutional Rules. The result of the votes for the motion to delete Rule 18.1 of MEF Constitutional Rules were as follows :-

o Agreed to delete Rule 18.1 - 36 votes from the floor

o Disagreed to delete Rule 18.1 - 02 votes from the floor

The meeting was informed that 36 representatives present at the AGM voted

for the motion to delete Rule 18.1 of MEF Constitutional Rules as against 02 representatives present at the AGM.

A motion by majority was passed to delete Rule 18.1 of MEF

Constitutional Rules as follows :-

/agm mins28072016

19

‘an Honorary Secretary hereinafter referred to as the Principal Office Bearers who shall hold office until the conclusion of the next following Annual General Meeting at which elections are held.’

(ii) To delete Rule 18.6 - Immediate Past President

The meeting unanimously agreed to delete Rule 18.6 of MEF Constitutional Rules. A motion by majority was passed to delete Rule 18.6 of MEF Constitutional Rules as follows :-

‘A person who retires from office as President shall ipso facto continue to serve on the Council albeit as Immediate Past President until he is succeeded in office by the next Immediate Past President. The Immediate Past President serves on the Council in an ex-officio capacity.’

(iii) To delete Rule 18.8 - The Honorary Secretary The meeting unanimously agreed to delete Rule 18.8 of MEF Constitutional

Rules. A motion was unanimously passed to delete Rule 18.6 of MEF

Constitutional Rules as follows :- ‘The Honorary Secretary where one is appointed, shall be responsible for the

timely preparation of minutes or causing minutes to be timely prepared of General Meetings and of the Council, the timely circulation of such minutes issuing notices of their meetings, recording of attendances at meetings and for ensuring that decisions taken at these meetings or by the Council are expeditiously implemented and or acted upon by all parties concerned in the context of such decisions. The Council may also assign additional responsibilities and duties to the Honorary Secretary.’

(iv) Rule 19 – Council Meetings

- To insert Rule 19.1

Encik Abdul Wahab Abu Bakar from Excel Minds Consultancy Sdn Bhd said that the notice sent via electronic media is a software.

Q1 : Encik Lim Kah Cheng from Pembangunan Sumber Manusia Bhd enquired whether Whatsapp is still considerd as electronic media?

/agm mins28072016

20

Ans1 : The Executive Director replied that Whatsapp is considered as electronic media.

The meeting unanimously agreed to insert Rule 19.1 of MEF Constitutional

Rules . A motion was unanimously passed to insert Rule 19.1 of MEF

Constitutional Rules as follows :-

‘Notice of meeting shall be delivered personally or sent by mail or electronic media to each Council member at the address as shown by the records of the Federation. If mailed, such notice shall be deemed to be delivered when deposited in the mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by electronic media, the notice of a meeting shall be deemed to be delivered when the notice is tagged sent by the software.’

(v) Rule 21 – Annual General Meeting

- To insert Rule 21.2

Notice of AGM and relevant documents were be sent by electronic media and no hard copies were be sent to the members. Members present unanimously agreed to insert the Rule 21.2 of MEF Constitutional Rules.

A motion was unanimously passed to insert Rule 21.2 of MEF

Constitutional Rules as follows :-

‘Notice of the Annual General Meeting and the relevant documents as stated in Rule 21.1 (i) to (iv) above shall be delivered personally or sent by mail or electronic media to each member at the address as shown by the records of the Federation. If mailed, such notice and the relevant documents shall be deemed to be delivered when deposited in the mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by electronic media, the notice and the relevant documents shall be deemed to be delivered when the notice with the relevant documents is tagged sent by the software.’

(vi) Rule 21.7 Insertion

Encik Mohd Farid Shah bin Mohd Basir from Bank Kerjasama Rakyat

Malaysia Sdn Bhd pointed out that ‘pari pasu’ should be spelt as ‘pari passu’.

All present agreed to insertion of Rule 21.7 to MEF Constitutional Rules.

/agm mins28072016

21

A motion was unanimously pass to insert Rule 21.7 to MEF Constitutional Rules as follows :-

‘Not less than 21 days notice shall be given of the Extraordinary

General Meeting and the provisions of Rule 21.2 shall apply pari passu to an Extraordinary General Meeting.’

(ix) Rule 32 - Notice to Members

- Rule 32.1 - Insertion All present agreed to insert Rule 32.1 to MEF Constitutional Rules. A motion was unanimously pass to insert Rule 32.1 to MEF

Constitutional Rules as follows :- ‘All notices sent or required by these Constitutional Rules to be sent to

the Members shall be deemed to have been duly served if sent by the Federation either personally or through the post or through the electronic media, addressed to Members at the address as shown in the Register. If mailed, such notice and the relevant documents shall be deemed to be delivered when deposited in the mail in a sealed envelope so addressed, with postage thereon prepaid. If notice is given by electronic media, the notice and the relevant documents shall be deemed to be delivered when the notice with the relevant documents is tagged sent by the software.’

(vii) Notes to the Notice of AGM

- Bye-law 3.2.4 on MEF Bye-laws on Elections to the Council 2006 Q1 : Encik Lim Kah Cheng from Pembangunan Sumber Manusia Bhd

referred to the Notes to the Notice of AGM wherein it was stated that under the Bye-law 3.2.4 on MEF Bye-laws on Election to the Council 2006, the Nomination Form together with a brief CV to be deposited at MEF registered office not later than 72 hours ….. Is the nomination form deposited by electronic media?

Ans1 : The Executive Director said that the Bye-laws are constituted by

the Council. The Council may later amend the Bye-laws.

ITEM 7 – TO ELECT FROM AMONST THE NOMINEES OF ORDINARY MEMBERS TO THE COUNCIL IN ACCORDANCE WITH RULE 17.1(a) OF THE MEF CONSTITUTIONAL RULES 7.1 Before the commencement of the election, the Executive Director invited all

out-going Council members on the stage to step down and join the floor.

/agm mins28072016

22

7.2 The Executive Director announced that there were 14 Nominees of Ordinary

Members who have been duly proposed and seconded and have given their consent to stand for election to MEF Council for the term 2016 - 2018. The names of the 14 Nominees together with their cvs have been circulated to all present. The Executive Director invited additional nomination from the floor. There was no nomination from the floor. Tuan Hj Mohammed Amin Aziz from A.P. Search Management Recruitment Sdn Bhd proposed that the nominations be closed. Encik Christopher S Raj from the Association of Hotel Employers seconded the proposal.

7.3 In accordance to Rule 17.1(a) of MEF Constitutional Rules only 12 elected

Nominees of Ordinary Members will be elected to MEF Council. The Nominees and Duly Authorised Representatives (DARs) of Ordinary Members and the Nominees of Association Members who were eligible to vote at the AGM were given 12 voting slips to cast their votes during the election. Voting was by show of hands. MEF Secretariat staff will collect the voting slips from the Nominees and DARs who were eligible to vote.

7.4 The following 14 Nominees standing for election (based on alphabetical order)

introduced themselves to the floor :-

1. Encik A Ramadass – Managing Proprietor, Ramadass & Associates

2. Dato’ Abdul Aziz b Abu Bakar – Executive Director, Malaysian Directors Academy (MINDA)

3. Encik Abdul Wahab Abu Bakar – Chairman, Excel Minds Consultancy Sdn Bhd

4. Tan Sri Azman Shah bin Dato’ Seri Haron – Chairman, Antara Holiday Villas Sdn Bhd

5. Encik Hishamuddin bin Mon – Group Chief Operations Officer, UDA Holdings Bhd

6. Tuan Hj Mohammed Amin Aziz – Executive Director, A.P. Search Management Recruitment Sdn Bhd

7. Encik Mohd Farid Shah bin Mohd Basir – Chief Human Capital Officer, Bank Kerjasama Rakyat Malaysia Bhd

8. Tan Sri Dato’ Dr Mohd Noor bin Ismail – Chairman, Rebut Resources Sdn Bhd (Uptown Sports)

9. Dato’ Palaniappan Joseph – Managing Director, Satake Technologies

Sdn Bhd

10. Puan R Usha Devi a/p RV Rajan – Proprietor – Advocate & Solicitor, R Usha Devi & Associates

/agm mins28072016

23

11. Tuan Hj Razali b Dato’ Hj Rahmat @ Ali Mhd – Executive Director, SRT-EON Security Services Sdn Bhd

12. Lt. Kol (K) Dr Sam Quah Sin Chye – Chief Executive Officer, Nisseisanko Venture

13. Dato’ Dr Syed Hussain Syed Husman – Executive Director, SVT Resources Sdn Bhd

14. Encik Zulkifly bin Abdul Rahman – Sr Director Human Resources, Renesas Semiconductor KL Sdn Bhd

7.5 Voting on the elections were carried out and the results of the election were

projected on the screen. 7.6 The following first twelve Nominees with the highest votes were duly elected

as representatives of Ordinary members to the new MEF Council for the term 2016 – 2018 :-

No. Name of Nominee # Votes

1 Puan R Usha Devi a/p R V Rajan 124

2 Tan Sri Azman Shah bin Dato’ Seri Haron 119

3 Encik Abdul Wahab b Abu Bakar 111

4 Encik A Ramadass 108

5 Dato’ Dr Syed Hussain Syed Husman, JP 107

6 Tuan Hj Mohammed Amin Aziz 104

7 Lt. Kol (K) Dr Sam Quah Sin Chye 104

8 Dato’ Abdul Aziz b Abu Bakar 100

9 Encik Mohd Farid Shah bin Mohd Basir 98

10 Tuan Hj Razali b Dato’ Hj Rahmat @ Ali Mhd 96

11 Dato’ J. Palaniappan 95

12 Encik Zulkifly bin Abdul Rahman 94

13 Encik Hishamuddin bin Mon 62

14 Tan Sri Dato’ Dr Mohd Noor bin Ismail 30

/agm mins28072016

24

7.7 The President congratulated all the first 12 Nominees (Nos. 1–12) as listed

above, who were elected to the MEF Council for the term 2016 – 2018. The President reminded the newly elected Council to give their full support to the works of the MEF Council.

ITEM 8 – TO ANNOUNCE THE COUNCIL MEMBERS FROM FOUNDER ASSOCIATON MEMBERS IN FM-1 AND FM-2 AND ASSOCIATON MEMBER AM-4

The President announced the Council members from Founder Association Members in FM-1 and FM-2 and Association Member AM-4. They were as follows :-

Founder Association Member – FM-1

Encik Mohd Syukri Ahmad Sudari - President, Association of Insurance Employers

(AIE) Dr Michael Chiam Tow Hui - President, Commercial Employers Assn. of

Penin. M’sia (CEAPM) Encik Ng Beh Tong - Council Member, Malaysian Chamber of Mines

(MCM) Founder Association Member – FM-2 Encik Christopher S Raj - President, Association of Hotel Employers

(AHE) Puan Nora Abd. Manaf - President, Malayan Commercial Banks’ Assn.

(MCBA) Encik Alan Khoo Choom Kwong - Chairman, Sabah Employers’ Consultative

Assn. (SECA) Puan Anne Kung Soo Ching - Executive Secretary, Sarawak Chamber of

Commerce & Industry (SCCI) Association Member – AM-4 Encik Mohamad bin Audong - Director, Malayan Agricultural Producers Association (MAPA)

/agm mins28072016

25

ITEM 9 - TO APPOINT AUDITORS

9.1 The President informed the meeting that M/s Atarek Kamil Ibrahim & Co. had indicated that the firm is prepared to be re-appointed as the Federation’s Auditors. Lt. Kol (K) Dr Sam Quah Sin Chye from Nisseisanko Venture proposed that M/s Atarek Kamil Ibrahim & Co. be re-appointed as the Federation’s Auditors. Encik Christopher S Raj from Association of Hotel Employers (AHE) seconded the proposal. A motion was unanimously passed to re-appoint M/s Atarek Kamil Ibrahim & Co as the Federation’s Auditor.

ITEM 10 – TO CONSIDER ANY OTHER MATTERS OF WHICH NOT LESS THAN 14 DAYS’ NOTICE HAS BEEN GIVEN IN WRITING TO THE FEDERATION PROVIDED THAT THE MEETING MAY CONSIDER ANY MATTER IN RESPECT OF WHICH SUCH NOTICE HAS NOT BEEN GIVEN IF NOT LESS THAN TWO-THIRDS OF THE MEMBERS PRESENT AGREE TO SUCH MATTER BEING DISCUSSED 10.1 The Secretariat has not received any other matters in writing from the

members. The President then asked whether there were any other matters from the floor. No matters were raised from the floor.

10.2 Update on SOCSO 10.2.1 The Executive Director invited Dr Michael Chiam Tow Hui, MEF

representative on the SOCSO Board to brief the meeting on the latest updates on SOCSO.

10.2.2 Dr Michael Chiam said he attended the SOCSO Board meeting in morning of 28.7.2016. SOCSO has increased the threshold limit of insured value from RM3,000 to RM4,000 irrespective of salary earned. SOCSO has received several complaints from employers on penalties for late payments as the statements were computer generated. Verbally SOCSO decided to defer the exemption from penalty for late payments to 1 September but at the SOCSO Board meeting held in the morning of 28 July 2016, it decided the date for exemption from penalty on not complying with the new SOCSO threshold contribution (RM 4,000) and coverage for all employees is 30 November 2016.

There being no other business, the President declared the AGM closed. He thanked all present for taking time-off to attend the AGM. The President invited all present to lunch at the Inn of Four Seasons Chinese Restaurant of the hotel. He announced that the newly elected Council members and Council representatives from Founder Association Members in FM-1 and FM-2 and Association Member AM-4 to attend the 1st meeting of new MEF Council after lunch at the Boardroom, Level 4, Convention Centre Building of the hotel at 2.15 p.m. The meeting ended at 1.00p.m. with a vote of thanks to the Chair.

Encl. Appendix A – President’s Address

/agm mins28072016

i

Appendix A

President’s Address at MEF Annual General Meeting – 28.7.2016

Bismillahirohmannirrohim Assalamualaikum wbt. Good afternoon. I am pleased to welcome all of you to the MEF Annual General Meeting of Ordinary and Association Members 2016. As we are still in the month of Syawal, I would also like to take this opportunity to wish you all Selamat Hari Raya Aidil Fitri. Ladies and gentlemen, 2015 was a very challenging year to say the least. Against the backdrop of global recession, the lower oil revenue, falling commodity prices and a weakening ringgit had made economic environment much tougher for the Malaysian employers. These factors had detrimentally impacted the cost of doing business, investments and the ability of employers to maintain and create jobs. As representatives of your Federation, we have had our hands full in being continually engaged with the Government to influence the development and implementation of sound human resources development policies. We have been working very hard to ensure that the employers’ inputs reach the policy makers loud and clear so that the policies would instill confidence in employers and investors. During the year under review the Malaysian economy, supported by the continued expansion of domestic demand, grew moderately by 5 per cent, which was lower than the 6 per cent growth in 2014. While the labour force participation rate was relatively stable at 67.6 per cent, the unemployment rate rose to 3.2 per cent from 2.9 per cent in 2014 as more cautious business sentiments led to softer employment prospects. It was reported that 2015 records highest retrenchments in last five years. A total of 38,499 workers were retrenched in 2015, inclusive of normal retrenchments as well as those let go via voluntary severance schemes (2014: 25,917 workers).

/agm mins28072016

ii

In terms of skill levels, employment gains were mainly concentrated in the high-skilled occupations, which reflect Malaysia’s continued shift towards becoming a higher value-added economy. However, demand for low-value production and low-skilled workers remained high in view of the growing number of registered foreign workers, which increased to 2.14 million workers from 2.07 million in 2014. The agriculture and construction sectors registered the highest dependence on foreign workers. Meanwhile, labour productivity, as measured by real value-added per worker, grew by 3.2 per cent, slightly lower than the 3.5 per cent in 2014. However, by comparison, Malaysia’s labour productivity performance per employee per year of USD26,761 is about half of that of a worker in Singapore at USD52,665. (This statistics is provided by The Conference Board – a global, independent business membership and research association working in the public interest – through its Total Economy Database in 2015). Ladies and gentlemen, MEF hit the ground running this year having had to address a multitude of issues related to the interests of employers. In the first three months of this year, we issued no less than half a dozen memoranda to various government ministries and agencies on a kaleidoscope of issues including the following:

proposals to set up employment insurance scheme; HRDF - consolidation of employers’ funds under 1MyGRIP and creation of

30 percent common pool; deferment of implementation of reviewed rates of national minimum wages; hike in foreign worker levy and rehiring of illegal foreign workers; rebranding of jobs and linking wages to certified skills; proposal to introduce strict liability concept for foreign workers.

Review of minimum wages On the issue of the review on minimum wages, which took effect on 1st of July 2016, your Federation put forth the position that the increased rates in minimum wages should be deferred to a later date considering the very difficult situation faced by employers, especially SMEs. Last week, it was reported that disk drive manufacturers Seagate and Western Digital have decided to move their operations to Thailand which would mean a loss of about 3,000 jobs in Penang.

/agm mins28072016

iii

In January this year, MEF submitted a joint memorandum with SME Association of Malaysia and the Malaysian International Chambers of Commerce and Industry (MICCI) to plead to the Prime Minister to defer the implementation of the reviewed rates of minimum wages. Your Federation argued that instead of reviewing the minimum wages, the wages should be linked to the certified skills level of employees. This is also consistent with Malaysia’s aspirations to develop 50 per cent skilled workforce by 2020. As it is, Malaysia’s skilled workers represent only 28 per cent of the total workforce as of 2013, lower than the 33 per cent targeted by 2015. There is obviously a need to urgently increase the number of skilled workforce, and at the same time reduce dependence on foreign workers. With the introduction of rebranding and revamping of jobs through the use of higher technology and equipment, especially for jobs that are considered dirty, dangerous and demeaning, the issue of the 400,000 unemployed graduates from public universities could also be alleviated. However, despite our pleadings to the government, the new rates of minimum wages were enforced on the 1st of July 2016. Ladies and gentlemen, The proposals to set up unemployment insurance, or ‘Employment Insurance Scheme’ (EIS) as it is being referred to now, has again resurfaced despite our efforts to convince the government otherwise. The proposals to set up EIS as part of the New Economic Model’s Strategic Reform Initiative has unfortunately regained new momentum. Since it was first mooted, your Federation has vehemently submitted the view that there are obvious flaws with the proposed EIS. Based on the proposed EIS model, all employers and employees are required to contribute to the proposed EIS for the benefit of only a few employees. Contrary to basic equitable principles, the EIS seeks to bail out the small number of recalcitrant employers at the expense of good and law abiding employers. Part of the fund would also be used for the functioning of the Active Labour Market Policies (ALMPs). Currently, such ALMPs are provided free of charge by the government; including Jobs Malaysia, the Human Resource Development Fund (HRDF) and ILMIA.

/agm mins28072016

iv

Should the 11 million private sector employees and their employers be required to contribute RM0.50 respectively every month, it does not make sense for the EIS fund to amass RM132 million per year when unpaid retrenchments only amounted to about RM25 million during the height of the Asian financial crisis. In that crisis in 2008-2009, the number of employees retrenched was about 0.6 per cent of the total of workforce, of which 95 per cent received their termination benefits. Instead of the EIS, your Federation proposed that a Savings Scheme be implemented whereby the employers, employees and the government equally contribute to their respective savings accounts. In the event of retrenchment, the retrenched employee may then be entitled to claim half of his/her monthly salary from the employer’s, governments and his own savings accounts for a maximum period of six months. If there is no retrenchment, then the employee may withdraw his entire contribution upon his/her retirement and the employer retains its part. MEF have had several discussions on the proposed savings scheme with the MTUC and the Ministry of Human Resources and we are hopeful that an acceptable way forward is in the works. Ladies and gentlemen, Let me now turn to the issue pertaining to the 1Malaysia GRIP (1MyGRIP) under the Human Resource Development Fund (HRDF). In June 2015, the 1MyGRIP programme combined 30 per cent of the one per cent of payroll levy paid by HRDF registered employers with the government’s provision of RM100 million training grant. At the end of the 1MyGRIP in March2016 contrary to the assurance given by HRDF to MEF the unutilised amount of the 1MyGRIP programme was consolidated into a common pool to be utilised by HRDF members on first come first served basis. Then in April 2016, HRDF announced that 30 per cent of the employers’ monthly contribution would be put into a common pool account for the training of employees of HRDF contributors. MEF strongly objected to these arrangements as all the contributions of employers should be strictly kept in the respective employer’s account to train their own employees. No amount of the employers HRDF contribution should be utilised to fund the 1MyGRIP programme or any other programme without the employer’s prior approval and consent.

/agm mins28072016

v

Based on the ‘MEF Survey on Implementation of Consolidated Fund from Unutilised Levy of 1MyGRIP & Establishment of 30% Common Pool from Employer Contribution to PSMB’ that was conducted two months ago in May 2016 , 91 per cent of the respondent companies do not agree that the unutilised employers’ contribution to the 1MyGRIP be converted to consolidated fund. If indeed the HRDF intends to upgrade the skills and competencies of workers whose employers are not registered under HRDF, the RM100 million allocated by government for the 1MyGRIP programme should be kept in a specific account that is separate from the employers’ contributions. Furthermore, employers registered under the HRDF should not be discriminated in terms of gaining access to the government’s provision under the 1MyGRIP programme. The HRDF contributors should instead be given priority over employees of non-HRDF contributors. I had written to the Minister of Human Resources regarding this matter and even went to the Press to highlight our concerns. MEF have remained staunchly opposed to the 1MyGRIP consolidated fund and 30% common pool concept and to date the MEF and MEF Academy have not sought any approvals from HRDF to conduct training under the 1MyGRIP and the 30 percent Common Pool programmes. Ladies and gentlemen, The predicament of private sector employers is further impacted by the recent amendments to the Employees’ Social Security (Amendment Act A 1508) 2016 which came into force on the 1st of June 2016. The amendments to the SOCSO Act – which now includes all employees in the private sector – were first announced by the YAB Prime Minister on the 1st of May 2016 without having had any prior consultation with stakeholders. Previously, employees who had never contributed to SOCSO and whose wages exceed RM3,000 a month were not obliged to contribute to SOCSO. Since the amendments came into force, MEF received many complaints from members who reported significant increases in terms of remittances to SOCSO and this is expected to increase even more next year. It is estimated the expanded SOCSO coverage of all employees would cost employers an additional RM35 million per year for about 500,000 employees who had never been covered by SOCSO previously.

/agm mins28072016

vi

Prior to the amendments, employers were contributing about RM6.4 billion per year to SOCSO for their employees. MEF objected to the amendments as those previously outside SOCSO coverage were high-income earners and are already covered by their own insurances which were way above and beyond SOCSO coverage. However, while employers are struggling to cope with these very difficult challenges, there are other policy proposals in the pipeline that threaten to further drive up costs of doing business. Ladies and gentlemen, The issues relating to the recruitment of foreign workers continue to be a bone of contention. Last month, the YAB Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi reported in Parliament that the freeze on the intake of foreign workers since mid-February 2016 has resulted in businesses losing a staggering RM24 billion. He went on to inform Parliament that the plantation sector alone had suffered RM2 billion in losses due the lack of foreign workers to harvest fruits. In addition, 24 furniture manufacturers in Muar closed down due to a lack of foreign workers, while infrastructure projects in Klang Valley were also affected by the freeze. The YAB DPM, who is also the Minister of Home Affairs, said the Cabinet had approved for the setting up of a National Clearing House that will look at the immediate needs for the affected sectors, and that the Human Resources Ministry, Economic Planning Unit (EPU) and other agencies are carrying out a study to determine the actual need for foreign workers according to their sectors. Your Federation has always maintained that policies, legislation and procedures relating to foreign workers should not be on ad hoc but instead the country should establish a clear, comprehensive and sustainable policy on foreign workers. The regulations should be based on labour market requirements. Although foreign workers are needed by industry, employers continue to face many difficulties, while the costs for recruitment has also drastically increased. An important strategy for reducing dependence on foreign workers is through increasing the number of Malaysia’s certified skilled workforce from the current 28 to 50 per cent as is the case of most of the developed economies. Industry must also be given the necessary incentives for automation and mechanization.

/agm mins28072016

vii

At the same time, women should continue to be encouraged to work and the number of illegal foreign workers in the country must be substantially reduced. Ladies and gentlemen, MEF continues to work closely with the international organisations to promote employers’ views on strategies to overcome challenges brought about by globalisation and increased liberalization of trade. At the international level, MEF continues to head the Confederation of Asia Pacific Employers, or CAPE, which concluded its General Council Meeting in Geneva, Switzerland in June recently. Actually MEF was ready to pass on the Chairmanship and responsibilities to run the CAPE Secretariat but the CAPE members decided that MEF should continue to lead the organization. On the home front, I am very pleased to inform you that based on MEF commitments at the 2015 AGM about exactly a year ago, the MEF Branch in Kota Kinabalu, Sabah will soon be operating. Ms Nur Taskin Omar, the MEF Associate Consultant – IR will be posted to KK to take charge of the new office and to serve the MEF members in Sabah. I’m therefore very pleased to inform you that the new KK branch office address, which is wholly-owned by MEF – is at Level 3, Lot No 1, Block A, Damai Point, 88300 Kota Kinabalu, and Sabah. To serve you better, the MEF secretariat has revamped the look and feel of the MEF portals in order to make it more interactive and lively. New features are continuously being incorporated and I would appreciate feedback from members to enhance the usability of revamped web portals. Ladies and gentlemen, Before I conclude, I would like to record my appreciation for the contribution of all Council members and from numerous individual members who have voluntarily served in the various committees, sub-committees and at our regional meetings. On behalf of the Council, I would like to acknowledge the efforts and dedication of the Secretariat staff of MEF for their services to the Council and to members of the Federation. Thank you.