HRD Corp cannot impose new fees at its whim and fancy

KUALA LUMPUR June 27 - The business world is growing at a frenetic pace and Malaysian companies have no choice but to keep up.

The country's estimated 100,000 employers know that they have to stay abreast with the business landscape or lose out.

Thus they realize that there is a need to upskill and value-add their workers with new skills to catch up with the latest trends.

Towards that end, employers send their employees for training so that they are equipped with the latest tools to meet challenges head.

With training and new skills, workers could climb the career ladder enabling them to earn higher salaries.

To fund all these training activities, the Human Resource Development Corp or HRD Corp will charge levy on all companies operating in the country.

Under the Pembangunan Sumber Manusia Berhad Act 2021, HRD Corp will deduct 1% from the salaries of each worker in the country to be paid by the employer.

HRD Corp however got into hot soup last week when it announced an additional fee of RM300 per person for micro-credential training.

The agency under the purview of the Human Resources Ministry stipulated via a circular that it will charge employers a micro-credential fee of RM300 per trainee per training for almost all training conducted.

What is micro-credential?

Micro-credentials are mini-qualifications that demonstrate skills, knowledge, and/or experience in a given subject area or capability.

Also known as nanodegrees, micro-credentials tend to be narrower in range than traditional qualifications like diplomas or degrees.

A burden for companies

Thd new fees slapped by HRD Corp will definitely burden Malaysian companies.

"Just imagine, if a company has 20 employees it wants to send for micro-credential training, it has to fork out a total of RM6,000.

This is on top of the levy already paid by employers to HRD Corp.

If there are more than 20 workers to be trained, it will burden trainers as well as they can only claim a maximum of RM6,000 a day from the companies.

HRD Corp cannot slap charges like this at it's whim and fancy," a trainer who declined to be identified told DagangNews.com.

The trainer said at 1% salary deduction from big companies with 10,000 workers, 40,000 workers and workers from other employers, HRD Corp's training fund would have amassed a total of RM1 billion in levies.

Out of the RM1 billion, some RM600 million would have been allocated for training leaving it with sufficient balance of RM300 million and this amount will balloon each year as the levy is collected annually.

"Yet, HRD Corp still wants to collect the RM300 fee without consulting the stakeholders.

"HRD Corp is creating a policy without doing anything."

Microcredentials do not help employees

Micro-credentials do not really help workers as they do not really need second or third university degrees.

Employees in the country need to learn skills to upgrade themselves rather than obtain a new diploma.

Micro-credentials are more suited for university under-graduates by compiling them and convert them into diplomas.

HRD Corp does not have the case to implement the fee as the money belongs to employers. HRD Corp must reverse the decision.

It is worth to note that the Federation of Malaysian Manufacturers and Small and Medium Scale Enterprises Association are also against HRD Corp's move.

An injunction against HRD Corp?

Meanwhile, MYKITA Centre of Integrity, Professional Governance and Advancement (www.malaysiakita.org) president Myocho Kan is gathering a team of lawyers to analyse the PSMB Act 2001 as well as the current function and impression of HRD Corp in contrast and comparison to Section 5 and read in totality of the Act 612 whereas nothing in the Act has such provision for the HDD Corp to manage, decide, qualify and represent the trainers in Malaysia. 

The locus standi of HRDC to "manage" the trainers does not exist and can be challenged, he said. 

"I hope HRD Corp will realise and come to its senses and fundamentals because if an injunction is triggered, there could be more cans opened and laundry washed in the open because the submission of cases may become a floodgate to new revelations to substantiate the legal action. 

I expect there be a u-turn soon, and save us all these trouble," he said in a statement.

We will also be working with the Malaysian Employers Federation, the FMM and others as this has now escalated into boundaries beyond HRD Corp's jurisdiction in detriment to the industry and economy as a whole." -  DagangNews.com