Drivers are better off with 'contracts for service'

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Drivers are better off with 'contracts for service'

Postby admin » Mon Nov 10, 2008 2:44 am

WE want them to become entrepreneurs and independent enough to manage their own business. That, argue employers, is why many drivers are given contracts for service, (CFS) instead of contracts of service (COS).
Malaysian Employers Federation executive director Shamsuddin Bardan says it is common practice among employers to treat drivers as independent contractors and not employees.

"If they are employees, we have problems because we can't monitor or manage them properly.

"For example, if they are driving from Penang to Johor Baru, they might decide to stop the moment their eight-hour shift is up. We cannot manage our businesses like that. As far as companies are concerned, contracts for service are the way forward."

Shamsuddin adds that the ideal situation is one where the driver owns the vehicle himself, and manages it like a business.
"However, there are variations to this and, sometimes, the prime mover is owned by the company. This is when the situation is not so clear and moves into a gray area."

Shamsuddin says employers should ensure the CFS is appropriate to both parties as the intention ultimately is to come up with a win-win situation for both parties.

Told that the main grouse among drivers is that they do not get accident benefits, among others, he says they should get their own insurance if they want to protect themselves, but adds that companies should properly brief their drivers on the details of their contracts.

He also denies that giving CFS instead of COS is a way for companies to save money on benefits.

"It is not a question of cost-cutting but managing the business in a mutually beneficial manner. An employee can only make so much, whereas an independent contractor can make so much more."

He says a case that had been brought to court some years back on this issue had proved that drivers under CFS make more money than those who are employees.

But, how is this possible when many companies do not allow drivers to work for other companies?

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