Maternity Leaves

90 DAYS MATERNITY LEAVES AND THE POTENTIAL IMPACT ON THE FUTURE FEMALE WORKFORCE IN MALAYSIA
1.0
INTRODUCTION
At present, almost every country has provisions for maternity leave that provided to the female employees. Most industrialized countries have some form of maternity or parental leave policy that effectively grants employment protection to women around childbirth and in some cases to either parent for an even longer period after childbirth (Puhani and Sonderhof, 2009). Maternity leaves is a the temporary leaves that allowed by the company or institutions to a female employee for delivering and taking care a baby with the full salary
payment. Bourne and Lentz (2009) indicates that Maternity leave is the time away from paid employment for mothers to recuperate from childbirth or adoption and care for their new child. This maternity leaves is important to ensure the health of a baby, recovering process for a mother and also the time to manage a baby welfare and nursery before a mother ready for coming back to work.
World had realized the importance of women participation in the workforce and economy activity. women participation in workforce can help to increase the family income thus lead to increase in economy of country. Abdul Ghani Azmi, Syed Ismail and Basir (2011) cited that women contribution is important for the development of country and developing country also feel the need for women contribution to their economy especially Malaysia. Newton (2011) stated that ensuring women can participate in the workforce on equal terms with men is important for gender equality and poverty reduction.
The importance of women roles in a development of country and the women participation in the workforce had been brought to the provisions of maternity leaves as a employment protection to them around the world. However, the duration or the provisions provided for the maternity leaves by one country is different from another country and it had became the major concerns in the world regarding the minimum length of the maternity leaves that enough and sufficient for a mother and baby before return back to the work and this issue continue to arise and had not been resolved until today. This issues have become the major interest among the world and Malaysia also not excluded from debated and discusssed the issue in the parliament, forums, news and blogs and also between employers and employees in Malaysia.
Historically in 2007, the issues of the duration of maternity leaves had been brought by The Minister of Women,Family and Community Development Datuk Seri Shahrizat Abdul Jalil, she had presented the issue of the extension of maternity leave from 60 days to 84 days in the cabinet for approval but this issue are not resolved and approved by government. (The Star, 2007). This issues continuosly to arise when National Unions Bank Employees (NUBE) launced the campaign to gained the support from the public for extend the maternity leaves from 60 days to 90 days for female workers in private sectors. They managed to acquire 1 million signature that support theirs campaign of 90 days for Mom . (The Star, 2010) .
On 15 October 2010, Prime Minister, Datuk Seri Najib Tun Razak presented during the 2011 budget at Dewan Negara announced that government has decided to make consideration by extending the 90 days maternity leaves effective only to the female civil servant. (New Straits Times, 2010). This means that, government need to bear the extra cost of another 30 days and this directly has a effect on governments expenditure. This really need a huge expenditure by government every year in order to support the salary of the mother during the maternity leaves. Again In December 2010, Women, Family and Community Development Minister ,Datuk Seri Shahrizat Abdul Jalil had announced that her ministry is in the midst of formulating a cabinet paper to increase maternity leave from 60 to 90 days for the private sector. (The Malay Mail, 2010 ).
Private sector are hesitant about the implementation of 90 days maternity leaves, there are many objection from the company in the private sectors especially from Malaysian Employers Federation (MEF). Malaysian Employers Federation executive director Shamsuddin Bardan claimed that, the additional 30 days would cost employers an extra RM1.2 billion yearly and currently employers had spent some RM2.4 billion yearly in order to cover the cost of paid salary for 60 days maternity leave. Shamsuddin Bardan also stated that, the private sector is the engine of growth for the country. Therefore, the government should not make a move that will add to the cost of running a business in Malaysia (The Malay Mail, 2010).
The company also needs to put or transfer the extra work to the co-worker during the absence of the pregnant worker. This will lead to the overload task demand for the co-worker and can cause stress, fatigue and lost of employees productivity. Besides, the company also needs to find the substitites for the task that procastinated by the female workers during the maternity leaves.This all involves the costs to the company and to the industry as a whole that will slow the growth of company and profit due to huge expenses of paid maternity leaves and low productivity.
In addition, Yasmin Masidi, Sisters in Islam (SIS) programme officer for media and communication cited that, government need to consider other factors and angles. It is important women are not penalised by employers for their leave and employers will feel hesitant to employ or promote a female employee because of the maternity leave." (The Malay Mail, 2010). The statement above clearly state that , there will be negative impact awaiting the future female workforce, employers become more selective and bias because it will be more costly for them in order to hire a women in their company.
2.0
MATERNITY LEAVES
International Labor Organisation (ILO) is the International organization responsible for drawing up and overseeing international labour standards. Protecting maternity has been among the first concerns of the ILO and they responsible to review the employment protection for female workers in the international level. In 1919, the first Convention on maternity protection (Convention No. 3) was adopted during the first International Labour Conference (ILC) . This Convention was followed by two others: Convention No. 103 in 1952 and Convention No.183 in 2000, which progressively expanded the scope and entitlements of maternity protection at work.
In 2010, ILO suggested that the mimimum lenght of maternity leaves should be at least 12 weeks and they recommend the best maternity leaves is 14 weeks. 183 of ILO member countries already practice with minimum standard of maternity leaves and fewer than 30 countries do not practice the minimum lenght of maternity leaves. The tables 2.01 and 2.0.2 below shows the several provisions of maternity leave in the developed and developing country.
Table 2.0.1 : Maternity leaves duration of Developed country
Country or area
Length of maternity leave Period
Percentage of wages paid in covered Provider of benefit period % Note 100 Employer 1/8 National Treasury, 7/8 Employment Insurance Fund Employment Insurance Fund Employer Municipality and Employer Social security Statutory health insurance scheme, state, employer Social Insurance Fund Employer and Government
Brunei Darussalam Japan
Weeks
14
Weeks
30%
Republic of Korea 90
Days
100
Hong Kong
10
Weeks
80 100
Denmark
52
Weeks
France
16
Weeks
100
Germany Russian Federation Singapore
14
Weeks calendar days Weeks
100
140
100
12
100
Source : United Nations Statistic Division, 2010
Table 2.0.1 shows the provisions of maternity leaves among the developed country in Asia. Indicates that most of the developed country in Asia follow the minimum length of maternity leaves as suggested by ILO. Japan, Korea, Hong Kong, Denmark, Singapore, France, Germany and Russian Federation offer the maternity leaves over the minimum length. However, Brunei Darusslalam did not follow the minimum duration as suggested by ILO and only offer maximum of 9 weeks to the female worker with fully paid salary and the salary was fully paid by employers. Singapore provide 12 weeks or 3 months maternity leaves to their working women . The first 8 weeks was paid by employer and the last 4 weeks funded by the Government however, employers only bear the 8 weeks salary up to 2 surviving children only and Government was responsible to bear the full salary of 12 weeks for the third and subsequent birth.
Korea provide the 90 days maternity leaves with full salary to the female workers but the salary was funded by employment insurance fund. Japan also provided the maternity leave over the minimum length to their female workers as much as 14 weeks but they only paid 30% of salary and it funded by National Treasury and Employment Insurance Fund. On the other hand, Certain country likes Denmark, Russian and France offered the very long maternity leave to the female workers . Denmark offer 52 weeks of maternity leaves to the female workers but after the 32 weeks of leave period it may be divided freely between both parent and the salary was borned by Municipality and employers. Meanwhile, Russian provide the 140 days and the salary was fully funded by social insurance fund. France provide the 15 weeks to the female workers and the salary also was paid by social security.
Table 2.0.2 : Maternity leaves duration of Developing country
Length of maternity leave: Country or area
Percentage of wages paid in covered period Note 66
Provider of benefit
Period
Note % Weeks
Myanmar
12
Social security
Malaysia
60
Days
100
Employer Employer and Social insurance system Employer Social security or employer Employer
Thailand
90
Days
100
Cambodia
90
Days
50
Philippines
Weeks
100
Indonesia
Months
100
India
12
Weeks
100
Employer
China
90
Days
100
Social insurance
Source : United Nations Statistic Division, 2010
The table 2.0.2 shows the length of maternity leaves in certain developing countries such as Myammar, Malaysia, Thailand Cambodia, philippines, Indonesia, India and China. For example, Thailand provide 90 days of
maternity leaves to the employees with full paid. Under the Labor Protection Act of Thailand, an employer is required to pay an employee for up to 45 days of maternity leave and the rest of the maternity payment which is another 45 days was paid by the Social Insurance System. Myammar and Cambodia also
provide 12 weeks maternity leave to the female workers but only 66% salary payment that funded by Social Security in Myammar and only 50% salary
payment that paid by employer in Cambodia.
In addition, Indonesia and India also provide 3 month of maternity leaves to the female workers with fully paid salary that bear by employers. Philippines only provide 6 weeks maternity leaves to the female workers with fully paid salary that can be paid either by employer or Social Security. In term of our country, Malaysia provide 60 days maternity leaves to the female workers with fully paid salary that solely paid by employers. Malaysia consists of 14,196.2 million female population out of 28,908.8 million of total population. The age that entitled to enter the workforce in Malaysia was as early as 15 until the age of 64 years old. Department of Statistics Malaysia (2010) found that, the percentage of female participation in workforce for a year of 2010 was 46.0 % out of 9,039.4 million. Meanwhile, for male participation in workforce was 78.9 % out of 9,355.2 million. Table 2.0.3 shows the details about the population of Malaysia workforce .
Table 2.0.3 : Population of Malaysia Workforce
AGE
MALE
FEMALE
NO.OF (000)
POPULATION
0-14 15-64 65 AND ABOVE TOTAL POPULATION
4,723.8 9,355.2 633.6 14,712.6
4,441.2 9,039.4 715.6 14,196.2
9,165 18,394.6 1,349.2 28,908.8
Source : Department of Statistic Malaysia,2010
Female employees has a privileges to get a benefits from the maternity leaves and Malaysia had enacted the maternity leaves as a one Womens right and employers need to obey this law. Malaysia had enacted the maternity leaves in the Employment Act 1955 that are compulsory to followed and practised by the all company or organization. Employment Act 1955 in the Section 37(1) (a) and (b) has stated about the length of eligible period as not less that 60 consecutive days in respect of each confinement. A female employee is entitled to commence her maternity leave at any time during the 30 days immediately proceeding her confinement or not later than the day immediately following her confinement.
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As stated in tables 2.0.1 and 2.0.2, most of the developed and developing countries excluding Malaysia offer the long maternity leaves to the female workers over the minimum length that suggested by ILO. However, most of developed and developing countries have their own social security fund or social insurance fund that used to fund the cost of all the salary that paid to the female workers while they in the maternity leave. By using this fund, employers are not really burdened with the huge cost. Unlike in Malaysia, the cost are solely bear by employers abd this was really burden the employers and incur the huge expenses for the company and reduce the growth and profit for the company.
Malaysia is developing country that plan to heading towards the developed country. The absenteeism of female workers for a long time will lower the company productivity and market competitiveness. For the developed country, they have the high Gross Domestic Product (GDP) rather than developing countries, means that they already have a high productivity and human capital in the country. They are able to give the long maternity leaves to the female workers because they are already stable and high in the productivity and human capital. The developed country afford to give the long maternity leaves because high GDP also indicates that the company profit and growth relatively high in developed countries rather than developing countries. This support the reason why the developed country can give the long maternity leaves to their female workers and the negative effect of long maternity leaves are not really affect their economy development. For a developing country like Malaysia the
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extended maternity leaves to the 90 days will definitely slow the productivity and profit for the company and thus will slower our GDP growth and development. .
Furthermore, Puhani and Sonderhof (2009) indicates in their study that from a labor perspective, employment protection through maternity leave might increase the attachment of mothers to their employer or the labor force in general. It may also have the opposite effect in that maternity leave combined with maternity benefits can be seen as a subsidy to leave the labor market temporarily with potential long-term consequences. The effect of prolonged parental leave on the human capital investments of women of working and childbearing age is relatively negative. The researchers believe that, there are the negative impact and the long- term consequences that will influence on training for young working women and will give the negatives impact to the future female workforce in the world and also in Malaysia.
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3.0
POTENTIAL IMPACT ON THE FUTURE FEMALE WORKFORCE IN MALAYSIA
Government needs to consider overall aspect before implementing this policy to the private sectors, there must be a good reason why the company in private sectors reluctant to implement this policy. Jaumotte (2003) indicates that, the marginal effect of additional parental leave on female participation appears to become negative. For this paper, it will emphasize that by implementing the long maternity leaves as 90 days will lead to the negative impact rather than positive impact that potentially occur towards the future female workforce and the overall current workforces situation in Malaysia.
3.0.1 RELUCTANCE OF EMPLOYERS TO HIRE THE FEMALE EMPLOYEES IN FUTURE
Iversen and Rosenbluth (2010) cited that, laws offering maternity leave for an extended period of time can hinder womens labour force participation. Such policies discourage employers from hiring women in the first place. The long maternity leaves will discourage the employers from hiring the future female Workforce. This is due to the long maternity leaves can make many problems to the company because of employees shortage and the additional cost of paid maternity leaves that currently funded by the company. By extending the 60 days maternity leaves to 90 days in Malaysia, employers will be more selective and
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hinder to select female candidates because employers need to bear all the full salary payment and also other indirect costs that incur during the absence of female employees. The employers will avoid to select the women candidates even the women candidates is more qualified with high education than a males. They might be purposely reduce the percentage of female employees in the company possible to 20% female and 80% males.
In addition, as stated by Newton (2011), yet excessively generous policies can make employers less likely to hire women in the first place, and thus decrease womens labour force participation. This statement strongly support that the long maternity leaves will lead to the employers reluctance or discouragement for hiring the future female workforce, employers are become more selective and put more high standard and tight conditions that being unreasonable to the future female workforce. For example, employers state the certain standard likes only males wanted or only young unmarried women wanted. Thus, it will lead to the decreasing number of future female workforce in Malaysia. This matter will lead to the unsuccesful of 10th Malaysia plan that had been implemented by our Prime Minister, Datuk Seri Najib Tun Razak which is focus on to increase the women participation in the workforce from 46.1 % to 55 % in the next three years. (The Star, 2010)
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3.0.2 GENDER
DISCRIMINATION
TOWARD
FUTURE
FEMALE
WORKFORCE
In 10th Malaysia plan, government put an effort in order to promote gender equality in the workforce and the poverty reduction in Malaysia. The case of gender equality is often regard as a human rights or social justice argument, but it is a growing body of evidence reveals that gender equality is good economics as well. If the number of women participation in Malaysia which is 46.1 % increased to 70% it would boost Malaysias GDP by 29.3 %. (UNDP, 2010). The effect from extension of maternity leaves to 90 days will directly give an negative impact toward the future female workforce and also government plan in order to achieve to reduce a poverty in Malaysia. Because of the long maternity, employers practice the bias when they find the new employees, if the position available is suitable for both candidates for example trainee manager, the employers are more prefer to select and hire male employees.
Equal Employment Opportunity Laws (EEO) , this is the Title VII of the Civil Rights Act that resolves charges of discrimination that occurs in the overall Human Resources activities or functions in the company. The HRM unit needs to comply all the HRMs activities with the laws. (Ivancevich, 2010). In Malaysia, government did not implemented this types of law, the employers cannot be blame if they are reluctant to hire
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the female candidates, eventhough they are qualified rather than males. Moreover, Chee Din, Rahmat and Mashudi (2011) also claimed that the Article 8 of the Federal Constitution fails to provide sufficient protection to prohibit gender discrimination in Malaysia. Thus, this will lead to gender discrimination and government faces difficulties in order to achieve gender equality in Malaysia. Clearly states that by implementing the long maternity will lead to employers reluctant to hire female workers, then will reduce the the numbers of female workforce and finally, this matter will lead to the the unstability of future female workforce and difficulties for government in order to increase women participation and promote gender equality and poverty reduction in Malaysia.
3.0.3 ROTTEN OF FUTURE FEMALE WORKFORCE MARKET COMPETITIVENESS
Miller (2009) claimed that extended absence from the workforce for maternity leave may deteriorate labour market skills, and damage future career paths and earnings, particularly when taken early in the career. The long maternity leaves will give the negatives impact on female employees career path especially toward young female workers. They cannot gain as much as knowledge and skills while need to take a long leave due to the birth of child because they are new to the workforce market and long maternity leaves can discourage employers to better plan a training for the new female workers.
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Iversen and Rosenbluth (2010) found that employers are reluctant to invest in skills of women when it is expected that they will leave the labour market for extended periods of time . Employers might thinking twice to invest in training and development on women when they will leave the company for the long period of time. This will give an impact toward new female employees that just started to learn and gain an knowledge and skills in order to compete in the market. This skills and knowledge are very important to ensure that they will go beyond rather than just a lower position or low management in the company.
Puhani and Sonderhof (2009) also support that the effect on training might be negative because a very long maternity leave reduces a young females labor market attachment, at least for the duration of the leave. The extension reduced training for young women, even for those who do not have children. Employers will be less likely to invest in young females human capital and place them in career paths with less training. This statement indicates that even the employers willing to hire the young females ,they will place the young females in the position that need less training. Thus, this matter will lead to the lack of competencies and lack of high position among female workers in the industry.
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Regarding the 10th Malaysia Plan , government intent to increase the female percentage in decision making position by 30%. The government will facing a hard challenges in order to achieve this plan, employers are less likely to invest in the training for the young women because they know that young women will leave the market for a long time. The effect of the long maternity leaves will deteriorate the women skills, knowledge, experience and analytical thinking that needed in order to hold the position in decision making and also need to compete with the male workers that have more skills, knowledge and decision making abilities result from the useful and effective training and development program provided by the company.
3.0.4 LOWER
EARNING OR SALARY FOR FUTURE FEMALE
WORKFORCE
Vahratian (2009) found that negative effects on their wages over the long term if viewed as a temporary employee . Employers view the female employees as a temporary staff that will leave company in the long term period and this will affect on the salary that will given by the employers. They are reluctant to give the expected salary that deserve for the female employees to earn. In addition, Schonberg and Ludsteck (2007) also had estimated the negative long-run effects on wages in Germany. Means that, the extension of 60 days to 90 days maternity
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leaves in private sector will lead to the lower earning or salary for the future female workforce. The employers will differentiate the salary between males and females even they have a similar education level and standard requirements for the position that offered by the company.
Employers will deeply think the cost that will incur if they hire a female workers, the possibility that the female workforce will pregnant and leave the company for a long time. This will incur them the huge cost in a year because in Malaysia employers are responsible to cover the salary for maternity leave up to five surviving children. Employers will think about the long run cost that will be imposed by giving them full salary payment for 90 days and this must be bear by the employers up to five surviving children. The employers try to reduce cost by differentiate between males and female salary and this matter will negatively affect the income for future females workforce in Malaysia.
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4.0
CONCLUSION
The extension of maternity leaves from 60 days to 90 days is not the best solution for the government in order to provide the employment protection for the female workforce. Many studies had been done before by the researchers prove that the negative effect of long maternity leave towards the future female workforce, the company and the industry itself. Malaysian Employers Federations (MEF) was strongly disagreed with the extension 0f 60 days to 90 days maternity leaves, the extension of maternity leaves is not the best solution because this will directly affect the businesss cost and expenses that will burden the industry and this will lead to the increasing in the prices of goods or services that then will be bear by customers.
Moreover, Romm (2002) stated that, it was typical for women to be given special postpartum treatments for 2 weeks after the birth and 40 days is sort of magic number after which the mother could safely reenter into daily working of her society. This clearly state that women can recover as soon as 2 weeks from the childbirth and Malaysia give the reasonable maternity leaves to the female workforce in order to recover and manage the baby. The health issues is not the strong reason to extend the maternity leaves. As a conclusion, the extension of maternity leaves is not the best practices in Malaysia, government needs to find and implement the other alternatives way that will appeal benefits for both employers and female employees in order to ensure the good economy
development of Malaysia for the future.
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5.0
RECOMMENDATION
This paper suggest several recommendations based on the study and review that has been made regarding the topic of interest which is the 90 days maternity leaves in Malaysia.
5.0.1 ESTABLISH INSURANCE
SOCIAL
SECURITY
FUNDS
OR
SOCIAL
Garcia and Gruat (2003) describe that, according to the ILO a social protection is the set of public measures that a society provides for its members to protect them against economic and social distress that would be caused by the absence or substantial reduction of income from work as a result of various contingencies (sickness, maternity, employment injury, unemployment, invalidity, old age, and death of the breadwinner). The government can implement this strategy by funded the social security funds or social insurance. This type of fund is similar to the Social Security organization (SOCSO) that both employers and employees make small monthly contribution to cover the maternity leaves.
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Many countries in the Asia Region likes China and Thailand had implemented this type of fund. In Thailand, government provide the 90 days maternity leaves which is 45 days bear by employers and another 45 days is funded by Social Insurance System. Meanwhile in China, the government provide 90 days maternity leave that fully funded by Social Insurance. This strategy will lighting the burden of employers . Malaysia can follow the Thailand, China and also Singapore that had implemented the social security funds that in order to cover the maternity leave.
The additional 90 days maternity leaves can be funded by the Social insurance or Social security fund this will give the benefits for both the employers and female employees in Malaysia. The employers can reduce the company cost and increase the profit for the company and future female employees also can get the privileges of 90 days maternity leave in order to better manage the baby and ready to return back to the work.
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5.0.2 OFFER THE FAMILY-FRIENDLY POLICIES
Chow and Chew (2006) claimed that, Family- Friendly Policies such as flexi time if used with quality practices at the work place can actually become the core of human resource management and lead to good work performance and higher productivity. The Malaysian company can develop other family-friendly policies that will reflect as a substitutes to the long maternity leaves for example the flexible working hour. The Human Resource Department plays an important roles in order to create the policies that reflect the work-life balance especially for married working women that have a new baby or young children. For example, the company might allowed the married working women that just come back from the 60 days maternity leaves to have the flexible working hours for several months in order to allow them to bring her newborn to the hospital for health appointment.
Subramaniam (2010) also shown that, Family-Friendly Policies are beginning to get importance in the corporate sector in the country but flexi working hours are still hard to come by in most Malaysian firms. Government policies and good corporate social responsibility practices include achieving an ideal work life balance. Other than extend the maternity leaves, government can find the alternatives to offer of promote the family friendly policies to female workers such as flexible working hours, child care benefits likes trusted nursery or family and child
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allowances.
The rising of
women participation become the new
challanges for Human Resources Department in order to effectively utilize and maintain a female workes as a capital for the company and in order to provide them with reasonable employment protection.
5.0.3 FULLY PAID ADDITIONAL 30 DAYS OF MATERNITY LEAVES TO THE HIGH PERFORMANCE FEMALE EMPLOYEES.
According to Lawler (2003), it is a good practice to tie the results of performance appraisals to the financial rewards individuals receive. There is a considerable amount of literature that suggest tying significant changes in pay to performance has a positive impact on motivation. The company can give the extra 30 days maternity leaves to the female employees with full salary payment to the employees that have achieve the high performance in their jobs. Company can regard this is as a reward to them for the excellent job performance. Female employees will feel this is as a appreciation and rewards for them due to their contribution to the company growth and development.
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Moreover, female employees will feel motivated because the company concerns for their life and conditions, thus will create the employees engagement with the company. Besides, female employees will be more inspire to return back to the work and willing to contribute and do more jobs or task that exceed their jobs areas. The company turover rate also will low because of female employees are willing to re-enter the work after the childbirth because they feel loyal and belong to the company.
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90 DAYS MATERNITY LEAVES AND THE POTENTIAL IMPACT ON THE FUTURE FEMALE WORKFORCE IN MALAYSIA

Table 2.0.1 : Maternity leaves duration of Developed country

Length of maternity leave Period

Brunei Darussalam Japan

Germany Russian Federation Singapore

Weeks calendar days Weeks

Source : United Nations Statistic Division, 2010

Table 2.0.2 : Maternity leaves duration of Developing country

Length of maternity leave: Country or area

Percentage of wages paid in covered period Note 66

Source : United Nations Statistic Division, 2010

payment that paid by employer in Cambodia.

Table 2.0.3 : Population of Malaysia Workforce

0-14 15-64 65 AND ABOVE TOTAL POPULATION

4,723.8 9,355.2 633.6 14,712.6

4,441.2 9,039.4 715.6 14,196.2

9,165 18,394.6 1,349.2 28,908.8

Source : Department of Statistic Malaysia,2010

POTENTIAL IMPACT ON THE FUTURE FEMALE WORKFORCE IN MALAYSIA

3.0.1 RELUCTANCE OF EMPLOYERS TO HIRE THE FEMALE EMPLOYEES IN FUTURE

3.0.3 ROTTEN OF FUTURE FEMALE WORKFORCE MARKET COMPETITIVENESS

EARNING OR SALARY FOR FUTURE FEMALE

development of Malaysia for the future.

5.0.1 ESTABLISH INSURANCE

5.0.2 OFFER THE FAMILY-FRIENDLY POLICIES

women participation become the new

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