MTUC urges government not to delay EIS

Wan Noorulazhar: Malaysian employers need to change their attitude.

KUALA LUMPUR: To date, there is no comprehensive financial assistance or social safety net for Malaysians who lose their jobs in the private sector, said the Malaysian Trade Union Congress (MTUC).

While those who earn under RM2,000 are protected under the Employment Act 1955, those earning above RM2,000 a month prior to their retrenchment are left in the lurch, said MTUC Selangor and Federal Territory division chairman Wan Noorulazhar Mohd Hanafiah.

“When a company winds up or is declared bankrupt, its top priority under the law is to pay off its borrowing to its debtors, while paying its workers’ salaries and compensation is the last priority.

“Its laid-off workers suddenly find themselves with no monthly income, no compensation and nowhere to seek help.

“Most of them have families depending on their income, bills to pay and outstanding loans,” Wan Noorulazhar said.

Last year, in the local steel industry alone, he said, hundreds of workers lost their jobs as factories and companies were shut down due to a critical oversupply situation that sent steel prices plummeting.

The MTUC and the Social Security Organisation (Socso) have been fighting for many years to introduce an insurance scheme that will provide a safety net for private sector workers who find themselves in such a situation.

In the last parliament seating on Aug 1, the progress of the Employment Insurance System (EIS) hit another stumbling block as it faced stiff opposition from employer groups.

Even after another round of stakeholder engagement on Aug 10, Wan Noorulazhar said it seemed that the employers were still trying to find excuses to delay the implementation of EIS.

He said this only made matters worse for employees who were already retrenched and those who may face similar situations in the near future.

After further discussion, it was agreed that the quantum of contribution for EIS would be 0.2% of the workers’ monthly salary, as well as an equal 0.2% contribution from employers or as low as RM1.90 for those who earn RM1,000 a month – the lowest rate among any other employment insurance schemes in the world.

Wan Noorulazhar stressed Malaysian employers needed to change their attitude and have more responsibility towards the welfare of workers.

“We believe a minimal monthly contribution of only 0.2%, which can ensure the well-being of their workers, should not be viewed as a huge burden to companies.

“We want the EIS Bill to be implemented as soon as possible to ensure that workers in the private sector have immediate access to financial assistance if they are suddenly retrenched from their jobs,” he said.

The EIS scheme provides protection for all kinds of loss of employment, including retrenchment, force majeure (an unforeseen circumstance that makes it impossible for work to be completed), those made redundant due to business restructuring or closure and those undergoing a voluntary (VSS) or mutual separation scheme (MSS).

Employees who have lost their jobs will be able to claim a portion of their insured salary for between three and six months until they secure re-employment.

The Bill, if implemented, will protect some 6.6 million local private sector workers, providing them with financial assistance for six months, during which Socso will also assist them to get re-employed through job matching and training, while monitoring each of them until they gain decent employment.

MTUC National Youth Chairman Mohd Sazuan Abdul Hadi said there was an urgent need to implement the Bill, especially with the growing impact of Industrial Revolution 4 and digitisation of the economy, whereby more workers are expected to be displaced.

He stressed that the assistance provided by Socso on employment services would also provide relief through personalised job assistance for youths and all workers who were contributors to the economy.