The federal government’s plan to introduce a new special insurance programme for workers in the country has met strong objection from the Malaysian Employers Federation (MEF), and this has infuriated Parti Sosialis Malaysia (PSM).
According to PSM, which supports the Employment Insurance Scheme (EIS), the scheme would function as a safety net for laid off workers, like the way Social Security Organisation (Socso) operates in supporting workers who suffered from accidents.
“EIS will act as a safety net for workers, especially if they were laid off from their jobs should their companies go bankrupt,” said PSM workers bureau coordinator M. Sivaranjani, adding that many companies had folded up when economic crisis hit the country every 10 years.
However, she said the workers were left stranded on the streets, both jobless and penniless.
“These laid off workers will have so many financial obligations including children’s education and servicing loans.
“Many would end up selling their homes and cars to meet their ends.
“EIS would in a way provide security net for these workers,” said the PSM leader in her statement.
Currently a company that went bankrupt does not have any obligation to resolve salary arrears or compensation payments, hence victimisation of retrenched workers.
This happens despite the Employment Act 1955 clearly stating that employers were responsible for the lay-off benefits.
On March 9, Deputy Human Resources Minister Ismail Abdul Muttalib told the Dewan Rakyat that the EIS was targeted for implementation next year.
Planning papers for the scheme had been approved by the Economic Planning Unit and would be deliberated by the cabinet soon.
A draft bill on the EIS would then be formulated to be tabled at the next parliamentary sitting.
Under the scheme employers and workers would both be statutorily required to contribute towards the worker’s insurance account, in a similar way they now do for Socso.
MEF executive director Shamsuddin Bardan however, had voiced out the federation’s objection to the plan.
He said the scheme was not fair and would lead to increased costs that would burden private companies, many of which were currently facing financial difficulties and, therefore, had to reduce their workforce.
Sivaranjani brushed aside Shamsuddin’s argument, stressing that the employers should realise that the scheme would benefit them in long run.
She said the employers’ contributions for the scheme would not be a financial burden to them especially since the employees too would be making their own contributions.
“Employers should realise that their investment returns would be protected and enhanced so long they take care of their workers.
“No workers, no productivity, no profits – something that employers seem to always forget,” said Sivaranjani.
PSM members would distribute petition cards supporting the EIS outside Parliament on Wednesday March 29.