FMM unhappy with tabling of Employment Insurance System bill

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) is concerned with the tabling of the Employment Insurance System (EIS) bill, citing issues such as double benefits for workers under voluntary or mutual separation schemes (VSS or MSS) and further deterioration in work attitude and commitment.
A new law to implement the EIS, which could benefit thousands of retrenched employees a year, was tabled in the Dewan Rakyat on Monday. The system, to be managed by the National Social Security Organisation, is expected to come into force on Jan 1, 2018, with payouts starting from 2019.
According to the FMM, the Human Resources Ministry had always said – at all engagements with employers which the FMM had participated in – that the EIS is to protect the interests of workers who had been retrenched and were not paid their employment termination and layoff benefits (ETLBs) and to help tide them over when seeking new employment.
However, press reports implied that the bill is providing financial aid to all who are unemployed, including those who took up VSS and MSS, and even allowing dependents to claim in the event an insured employee dies, falls into a coma or becomes of unsound mind.
“FMM reinforces that workers under VSS and MSS will be receiving double benefits, which are from their severance package and the EIS. Likewise, those who have been retrenched and received their ETLB will be receiving double benefits,” FMM said in a statement.
It said the transfer of benefits to dependents is confusing and this provision has never been highlighted during engagements with employers.
“Employers need to be given access to the bill to review the details so that we could further highlight our concerns to the government.”
It added that human-related costs would rise significantly without commensurate increase in work productivity and quality.
“We are most concerned that the EIS could cause further deterioration in work attitude and commitment. Consideration has to be given to the business sector’s capacity to absorb continually rising costs of doing business which is affecting sustainability and competitiveness,” said FMM.