AT the tripartite workshop on the
establishment of a retrenchment insurance scheme on Tuesday, position papers
were presented by the Malaysian Trades Union Congress (MTUC) and the Malaysian
Employers Federation (MEF).
As the
MTUC mooted something similar in 1998 and more recently in 2009, the MTUC's
position is quite clear. The MTUC president was quoted as being
"happy" that it is in the pipeline. Though there has been no press
report on the MEF position, its country report to the board of the Asean
Conference of Employers last month provides an indication.
Its
stance is that "employers should be allowed to manage and administer their
own retrenchment fund and there was no need to contribute to such retrenchment
fund or participate in the proposed unemployment insurance".
But as
this was a response to the proposal by the
Performance Management and Delivery Unit (Pemandu) Lab on Human Capital
Development that the scheme be managed by the Employees Provident Fund, it may
have changed its position now that the Social Security Organisation (Socso),
the third party and chair of the tripartite project committee, seems to be the
agency to do it.
then
again, as the MEF opposition was based on the view that "present labour laws
are sufficient to protect retrenched employees" and unemployment insurance
"served as a bailout for recalcitrant and badly managed companies"
and "punish the good and well-managed employers", this does not seem
likely. Indeed, some time ago, the MEF suggested instead a retrenchment subsidy
fund to assist companies to retain rather than retrench workers by subsidising
their salaries.
To be
sure, the Employment Act provides for severance pay, the retrenchment benefits
are quite generous and some employers pay more than the minimum rates. But as
the National Economic Action Council (NEAC) and the MTUC have observed, many
more do not make the payments required by the law. These create major financial
problems, especially for retrenched workers who are sole breadwinners. Although
they are supposed to notify the Labour Department of intended lay-offs, many
don't. As the NEAC argued, it is such "gaps and inefficiencies" that
makes it necessary to include an unemployment insurance scheme in any labour
safety net.
Certainly,
there are issues concerning the eligibility and duration of income support for
the retrenched, as well as the sources and mechanisms for funding. But as
assistance is available from the International Labour Organisation, such issues
are capable of resolution. Admittedly, a lot of hard work remains to be done to
reconcile the divergent positions. That said, however, the Malaysian experience
in building consensus gives hope that this is not an insurmountable task.
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