Glovemaker admits to unpaid wages, blames previous management

 

Glovemaker SSN Medical Products Sdn Bhd, whose 20 workers fled the company last month alleging forced labour conditions, has come clean to having outstanding wages dating back to 2019 and has worked out a settlement plan with its workers.

Explaining that the bad debts were inherited from the previous management, company director Clinton Ang said the company aimed to settle unpaid salaries within the next three months.

“We take our obligation to our staff, foreign or local, management or production, very seriously.

“It will take us a few months to regularise all wage-related matters but we have in place a realistic plan to resolve them as soon as we can,” said Ang, who owns 53 percent of the company.

A Malaysian Rubber Glove Manufacturers Association (Margma) member since 2016, Ang also admitted to late monthly salary payments as the company had fallen on difficult times.

“In a memorandum addressing arrears in wages signed between a workers’ representative and the management on Dec 27, the company had adhered to what was agreed.

“As recently as Feb 22, the company paid January wages to all our workers and we will pay the February salary sometime this month,” said Ang.

He said among those owed wages are long-term employees, who were understanding of the company's financial difficulties.

Poor labour practices

Apart from unpaid salaries, the company was also making plans to finalise the settlement of unpaid contributions to the Social Security Organisation (Sosco) and workers’ outstanding overtime.

Ang also blamed the previous management for poor labour practices like deducting amounts off paychecks for uniforms and accommodation.

“The two months’ unpaid salaries from 2019 were to be paid to workers in six instalments and half of this has been settled.

“Our overtime calculations vary from what the workers have reported because the previous human resources staff had applied an incorrect formula with an increase of 20 percent in pay-outs to workers.

“We have cleared the discrepancies with the Labour Department and are working on a plan to settle this with the workers concerned,” he explained.

The glove and condoms maker that claims to have been audited by international supply chain auditor, Sedex, was responding to a Malaysiakini report titled "20 ‘forced labourers’ owed RM7,000 in wages each flee glove maker”.

The March 9 report revealed that instead of paying the workers what they were allegedly owed, in response, the firm swiftly replaced the workers who fled with Myanmar contract workers.

Bangladeshi workers informed Malaysiakini that six of those who left were workers who had been pleading to be sent home after failing their medical tests last year - but their pleas had fallen on deaf ears, said Khan Sagor, 34, who represents the Bangladeshi workers.

RM270,000 owed in unpaid overtime

Admitting to hiring six Myanmar workers through the government’s recalibration programme, Ang said he needed to replace the workers quickly to ensure there was no prolonged disruption in production.

“We are finalising their work permits as well as the permits of our existing workers, which is why they don’t have possession of their passports.

“But apart from the one worker we sent home, there has been no one else who asked to return home," he said.

Workers’ claims to the Labour Department on Feb 8 listed unpaid overtime and salary in 2019, unpaid overtime from June to December in 2022, and unpaid overtime in January this year.

Their biggest claim was chalked up in unpaid overtime during seven months in 2022 amounting to more than RM270,000 for the 70 workers.

They also alleged annual payments for uniforms and monthly RM50 deductions for overcrowded accommodations.

Their list of complaints pointed out that they were not issued salary slips owing to the irregular payments which were made in cash and bank transactions.

The workers also claimed that the company was not making any contributions to Socso.

Acting on this complaint, the Selangor Labour Department carried out an investigation following its joint visit to the factory premises with Socso on Feb 28.

Its Selangor senior deputy director, Muhammad Rifaee Muhamad Saleh, said the department found the company had defaulted on salaries and overtime while making some unlawful deductions.

Rifaee told the media that the firm was being investigated under the Employment Act 1955, National Wages Consultative Council Act 2011, and the Employment Insurance System Act 2017 as it had allegedly defaulted on Socso contributions for several years, reported Utusan Malaysia.

The company was also being investigated under the Workers’ Minimum Standards of Housing and Amenities Act 1990 (Act 446) as the workers’ accommodations were found to be inadequate.

Downturn in 2022

It was reported that the construction and engineering company, Vizione Holdings Bhd, bought a 51 percent stake in SSN in 2020.

Through its wholly-owned subsidiary, VIP Index Sdn Bhd, an RM5 million cash deal was made with a profit-guarantee clause.

In the clause, SSN was to ensure it achieved a profit before tax (PBT) target of no less than RM15 million for the financial year ending Dec 31, 2021 (FY21).

According to data analytics provider, emis.com, SSN reported a net sales revenue increase of 116.11 percent in 2021 with a total growth of 57.12 percent.

Vizione, a public-listed company, in November 2022 informed Bursa Malaysia that it was selling back 51 percent of SSN equity to Ang, for RM100,000.

Ang said the 2021 revenue reported on emis.com was correct, but added that the company had suffered setbacks in 2022, sending it into the red.

Announcing the 2020 buy-over from Ang, Vizione described SSN as a niche producer of speciality gloves, such as elbow-length latex medical gloves, gloves for gynaecology use and gloves for chemotherapy use.

A total 80 percent of SSN's total production is exported, either as an original equipment manufacturer (OEM) or through its own brand 'Hanser'.

SSN exporting clients were in the United States, European countries, China and Africa, Vizione announced at the time.

However, Ang told Malaysiakini that the company was experiencing a downturn with exports limited within Asia and its buyers predominantly in Bangladesh, India, and China. - Mkini