Malaysian eateries close as foreign labour crunch bites

Malaysian law allows restaurants to hire foreign workers as cooks only, not servers or cashiers, though few follow the regulation due to a lack of locals taking up these jobs.
Malaysian law allows restaurants to hire foreign workers as cooks only, not servers or cashiers, though few follow the regulation due to a lack of locals taking up these jobs.ST PHOTO: TRINNA LEONG

Food business groups seek govt solution amid tougher rules on hiring foreign workers

It is 2am in Bangsar and the ritzy bars and restaurants in this upmarket neighbourhood in Kuala Lumpur have finally wound down for the night.

But the fluorescent lights are still blazing at 24-hour mamak shops, thanks to workers from Bangladesh and India who do not mind dishing out roti and mee goreng at all hours to earn RM1,000 (S$337) a month.

But the days may be numbered for these greasy spoons.

Tougher rules on hiring foreign workers forced thousands of similar Malaysian eateries to close shop last year and more are on the chopping block, say industry players.

Last week, a trio of associations representing 20,000 restaurant owners across the country submitted a memorandum to the government requesting a solution to the labour shortage.

Restaurateurs say their problems began back in 2016, when the government implemented a temporary freeze on hiring foreign workers.

  • 71,000 - Foreign workers employed in the restaurant industry.

    2,000 - Number of Chinese coffee shops that closed down last year.

    400 - Number of Indian-Muslim and banana leaf restaurants that rolled down their shutters for good last year.

The ban has since been lifted but employers complain that the process for obtaining work permits has become more stringent and takes longer, hampering their business.

Malaysian law allows restaurants to hire foreign workers as cooks only, not servers or cashiers, though few follow the regulation due to a lack of locals taking up these jobs.

"It's not just cooks we're running short of, we don't have enough waiters," said Malaysian Indian Restaurant Owners Association (Primas) president T. Muthusamy.

According to the Malaysia-Singapore Coffee Shop Proprietors General Association (MSCP), the Malaysian Indian-Muslim Restaurant Owners Association and Primas, some 2,000 Chinese coffee shops and 400 Indian-Muslim and banana leaf restaurants rolled down their shutters for good last year.

These outlets are casualties of Malaysia's efforts to reduce its reliance on foreign labour, which has been blamed for the country's stagnant wages. Officially there are 1.78 million foreign workers who work across different sectors in the economy, with 71,000 employed in the restaurant industry.

Employers say few Malaysians are willing to work the long hours required of the job.

"There are times when the restaurant is doing well and requires workers to stay an extra two hours. The locals refuse but foreign workers are willing," said MSCP president Ho Su Mong.

But others in the food business say there are willing Malaysian workers, but employers have to be prepared to cough up higher wages.

Local hires are available "provided you reward and pay them a reasonable wage", said Ms Sherlene Siew, who owns and runs a mid-range cafe in Bukit Bintang offering fusion food.

Hiring local staff at higher wages would also mean that Malaysians will have to stomach paying more for their food.

"Mamaks sell cheap food. If we get locals as front-liners, it'll greatly increase the food cost," said Mr Muthusamy.

One way forward is to invest in automation, or self-service systems, but restaurateurs say they need time to adapt to these changes.

"Ordering machines like the ones seen in Japan is an option," said Mr Ho. "(But) it would take at least half a decade to reduce our dependency on foreign workers".

Mr Muthusamy however remains sceptical that restaurants, including higher-priced establishments, are able to source local workforce as "front-liners" such as serving staff.

"Even in hotels, who are the waiters in big ballroom functions serving the dignitaries?" he asked.

In the meantime, some proprietors are resorting to hiring illegal foreign workers to fill the gap.

"It's not that we don't want to be law-abiding citizens but we've got no choice," said one restaurant owner. "We have to find ways to keep the business running," he said.

A version of this article appeared in the print edition of The Sunday Times on March 18, 2018, with the headline 'Malaysian eateries close as foreign labour crunch bites'. Print Edition | Subscribe