Ikea M'sia terminates security over labour policy breach - report

Ikea branches in Malaysia have reportedly severed ties with its labour provider due to a breach of policies.

According to Financial Times, internal investigations by Inter Ikea and Ikano Retail have found that foreign security guards working at the furniture retailer had paid fees to secure jobs.

Inter Ikea oversees the brand’s franchise store and Ikano Retail runs the Ikea stores in Malaysia, Singapore, Thailand, the Philippines, and Mexico.

The probe was conducted after it was reported that migrant workers from Nepal had paid fees as high as $1,000 (RM 4,400) to obtain jobs as security guards in Malaysia.

According to the report, Ikano said, “Many of the security guards working in our Malaysia business had paid recruitment fees”, which went against the company’s code of conduct.

It added that the probe had disclosed “multiple layers of subagents involved in the process in rural villages”.

“After many weeks of negotiation with our supplier, we were unable to resolve our concerns and have subsequently terminated our relationship,” Ikano said.

While Ikano declined to confirm its former supplier to the Financial Times, it said the incident was already reported to local authorities and the Nepalese embassy.

It added that a new supplier had been secured and workers will be recruited directly rather than using subcontractors, adding that it would conduct follow-up audits.

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