The Malaysian Trade Union Congress (MTUC) has expressed dismay over the influx of foreign workers, saying that their presence dilutes the power of unions.

Its secretary-general N Gopal Kishnam said since the 1990's, employers have already been using Voluntary Separation Schemes and other means to dismiss local workers and replace them with cheap foreign labour.

When the matter was brought to the Ministry of Human Resources, it was referred to the Industrial Relations Department or the Industrial Court instead, which Gopal said held the view that employers have absolute right to restructure their businesses despite what the employment contracts might state.

There is also a trend where employers tend to refer matters related to collective agreements to the Industrial Courts instead of negotiating directly with the unions, he said, which further undermined the union’s bargaining power.

"Although the minister urges employers to give reasonable salary increments to local workers, the minister should also reliase that the Industrial Court is under his ministry’s jurisdiction, and also play an important role in controlling the increase of wages of local workers," he said in a statement today.

Gopal ( left ) was responding to a Bernama report on Tuesday where Human Resources Minister Richard Riot was quoted as saying that there are an estimated 6.7 million foreign workers in Malaysia, of whom only 2.1 million have valid work permits.

The MTUC secretary-general said reports just two months earlier gave the figure of 5.8 million foreign workers of whom 2.9 million have valid work permits.

"The question from MTUC is, who is responsible for this?

"Isn't it the government, especially the Home Ministry, that is responsible for approving over 260 agencies to bring in these workers?" he said.

The MTUC also questioned the relevance of the "Harun Formula" in determining whether a given salary agreement is consummate with inflation rates, now that the inflation rate is over three percent per year and the Goods and Services Tax is slated for implementation next year.

The "Harun Formula" uses two-thirds of the average inflation over the previous three years as a benchmark to determine whether a salary adjustment was reasonable.

Urging the government to act, Gopal said, "The prime minister's call of 'people first, performance now' can be realised if the hard work of workers developing the country is reasonably and fairly compensated."

"The welfare of local workers should be prioritised and not sidelined," he added.