10MP: Reforming labour market


  • Nation
  • Thursday, 10 Jun 2010

KUALA LUMPUR: The governmment wants to reform the labour market in the 10th Malaysia Plan (10MP), with emphasis on improving job mobility and upskilling the current workforce, particularly those from the bottom 40% of households.

This reform of the labour market will be critical to provide a platform for the nation's ongoing growth efforts towards becoming a high-income economy.

The focus of reform will be on three key areas -- making the labour market more flexible, upgrading the skills and capabilities of Malaysia's workforce, and enhancing the country's ability to attract and retain top talents.

During the Plan period, the labour legislation will be reviewed towards ensuring that Malaysia adopts an optimal balance between labour market flexibility and job stability, and which provides for efficient and speedy settlement of labour disputes.

A sum of RM80mil will be allocated to the Relief Fund from 2010 to 2012 to provide financial assistance to retrenched workers who do not get due compensation from their employers.

The eligible retrenched workers will receive RM600 per month for a maximum of six months so long as they continue to be unemployed.

The report also says that the country's dependence on unskilled foreign labour will be gradually reduced.

However, sectors where labour shortages persist, such as the construction and plantation industries, will be allowed to hire foreign labour based on needs.

A new multi-tiered levy system will be implemented for employers of unskilled workers to encourage the move towards a highly-skilled workforce or for employers to hire skilled foreign labour.

The new levy system is also aimed at controlling the entry of unskilled foreign labour as the levies will be borne by the employers and not the employees.

The new system will be based on three principles, namely the levy will be proportionate to the ratio of foreign workers to the total number of workers, the rates will increase over time, and will vary according to the level of skills of the foreign workers.

At the moment, only 28% of the workforce in Malaysia are highly-skilled, reflecting the low level of educational attainment of a large segment of the workforce.

Therefore, under the 10MP, the government is targeting 33% workforce in the highly-skilled category by 2015 and 50% by 2020.

The coverage of the Skills Development Fund will be expanded to provide for upskilling and retraining of the workforce.

A total of RM500mil will be allocated to provide loans to workers for training, with a separate amount of RM500mil for loans to school leavers.

The SME Corp will meanwhile, under its Skills Upgrading Programme, finance 80% of the training cost paid by employers to train their employees at accredited training centres. - Bernama

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