Analysts unperturbed by Top Glove’s labour problems, see adequate resolution
KUALA LUMPUR: Analysts such as AmInvestment Bank Bhd (AmInvestment Bank) were unperturbed by labour issues surrounding Top Glove Corporation Bhd (Top Glove), believing that the world’s largest glovemaker had adequately addressed the issues raised in its announcement to Bursa Malaysia.
This comes after the Thompson Reuters Foundation found that some Top Glove workers clocked in more hours than the amount permitted by law.
The Thomson Reuters Foundation revealed last Thursday that migrant workers at the firm often work long hours to earn overtime pay to clear debts to recruitment agents back home, and in some cases exceed the legal overtime limit.
The British health ministry said it will launch an investigation into the matter, as Top Glove supplies to Britain’s National Health Service.
AmInvestment Bank saw that Top Glove has no involvement with the recruitment costs that are charged by foreign agents to the workers at the source country.
“The processing costs in Malaysia – covering things like levy, visa stamping and medical examination – are fully borne by the company and not passed down to workers,” it said in a report yesterday.
“To mitigate the issue of high recruitment fees, Top Glove plans to engage with the embassies of the labour source countries and request for their urgent action.”
On the issue of overtime, the research firm saw that Top Glove does not practise forced overtime (OT). The management is continuously putting in measures to prevent OT of more than 104 hours per month and these are expected to be fully implemented by the end of December 2018.
“Moreover, the company is constantly investing in more automation in its plants to reduce dependency on manual labour,” it added.
Also, Top Glove provides its workers with accommodation that is equipped with the necessary amenities. Full plant equipment such as gloves, ear plugs and helmets are also provided in addition to transport to and from the workplace.
Presently, Top Glove has some 13,000 foreign workers under its employment which make up almost 80 per cent of their total labour force. The company pays the foreign labour at least the minimum wage of RM1,000, excluding additional allowance and overtime pay.
“We believe the implementation of the new measures to prevent illegal OT hours will ease the concerns any stakeholders might have with regards to the legality of its labour practises,” it added.
“In any case, the UK is a small market for Top Glove, contributing to only two to three per cent of its FY17 turnover. We understand that Top Glove has complied with the requirement for a third-party certification for sales to Europe which involves the engagement between the buyers and external auditors to ensure that the product meets certain environmental, social and governance (ESG) standards.
“We continue to like Top Glove for its expansionary plans, focus and continual efforts in improving quality and operational efficiency, and its position as the largest rubber glove manufacturer.”