MTUC: Extend cover to a year

PETALING JAYA: MTUC will suggest that the proposed Employment Insurance Scheme (SIP) to cover retrenched workers to be extended from six months to a year.

Its acting president Abdullah Sani said he personally backed the scheme, which was aimed at helping laid off workers with their expenses until they found new jobs.

“My personal opinion is that the SIP is a good idea. However, the MTUC working committee will suggest for the SIP to cover retrenched workers for up to a year instead of the six months proposed by the Government,” he said in an interview.

He also downplayed objections by employers, claiming that the amount to be contribu­ted by them for the SIP would be “nominal”.

Announcing the scheme on Labour Day, Prime Minister Datuk Seri Najib Razak said the SIP would be a shared responsibility between employers and workers.

The training programmes, he said, would allow bosses to improve their workers’ skills and pay them accordingly as well as help employers adapt their organisation to chan­ges in technology and business structure.

However, Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said companies were already contri­buting to the Employees’ Provident Fund (EPF), the Social Security Organisation and the Human Resource Development Fund.

SIP, he said, would only benefit a relatively small group of employees, adding that only 40,000 workers or 0.6% of the formal workforce were retrenched during the 1997-1998 financial crisis.

Shamsuddin also described the move to provide three months’ wages over half a year for retrenched workers “as nothing great”.

The proposal to set up the SIP, including its infrastructure and computer system, would cost RM325mil, he said, questioning the need for such an “expensive body” to distribute three months of wages.

He said MEF was suggesting a “no frills” system for retrenched workers, including a third EPF account, in which employees set aside a month’s salary plus an additional month from the bosses as well as a similar contribution from a special government fund.

“No frills, no director-general, no building – this should be looked into by the Government instead of the SIP,” he said.

Small and Medium Enterprises Association secretary Yeoh Seng Hooi said SIP would be an additional burden to SMEs.

“The Employment Act already covers compensation for retrenchment. Why burden companies when retraining is a social role that the Government should undertake?”

Yeoh said as the matter stood, Malaysian laws favoured employees, adding that it was extremely difficult to dismiss errant staff.

Free Industrial Zone, Penang, Companies’ Association (Frepenca) former president Datuk Heng Huck Lee urged authorities to consult all stakeholders before implementing the scheme.