Hold off on changes to Employment Act until businesses recover, says builders group


PETALING JAYA: Amendments to the Employment Act 1955 to be implemented next month should be postponed until businesses have fully recovered, says the Master Builders Association Malaysia (MBAM).

Its president Oliver Wee Hiang Chyn said the construction industry would struggle to accommodate additional costs incurred from enforcement of amendments of Employment Act 1995, as these had not been budgeted for.

The amendments included a shorter working week from 48 to 45 hours, increased duration of maternity leave, paternity leave, and flexible work arrangements.

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"The industry continues to deal with uncertain liabilities resulting from the Covid-19 pandemic and requires time to fully recover.

"It is vital for the amendments to be enforced at a later period to avoid.. additional costs of doing business," he said in a statement on Friday (Aug 19).

He added that the new minimum wage of RM1,500 that came into effect on May 1 had already affected the industry with employers having to bear additional costs.

He said although the industry was able to operate fully during the country’s transition to the endemic phase, manpower challenges had hampered its recovery with delays in many jobs.

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"The government should also look into a proper economic recovery plan for the industry, to boost the economy," Wee added.

He said the amendments that could directly affect contractors include: flexible working arrangements (FWA) with limited guidelines; increase in overtime costs for employees earning up to RM4,000 per month; reduction of working hours from 48 to 45 hours a week; 60 days of hospitalisation leave per year in addition to non-hospitalisation sick leave; increase in maternity leave from 60 days to 98 days; and paternity leave of seven continuous days per birth.

Earlier, The Star reported that several groups had called on the government to delay implementing the amendments, citing added costs as a major concern.

ALSO READ: MEF: Implementing changes to Employment Act too costly and should be delayed

Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman said the amendments would see employers absorbing an estimated additional cost of RM110.99bil a year.

SME Association of Malaysia president Ding Hong Sing said the amendments should be implemented “step by step” as it could hurt the economy’s recovery.

He said the new minimum wage had led to a 25% to 35% increase in monthly operating costs.

"With the new rules set to take effect next month, the prices of goods will surely increase," he added.

Ding also said with the new 45-hour work week, a company’s output would be reduced.

The Federation of Malaysian Business Associations (FMBA) said enforcing the amendments will cause price increases of goods and services as employers will have to allocate more resources to recruit and maintain their workforce.

Industries Unite, which represents 120 trade associations and chambers of commerce, also said this was not the time to implement the amendments as businesses were just recovering.

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