UMNO-OWNED Utusan Melayu Bhd, publisher of Utusan Malaysia, has agreed to offer better compensation for staff opting for its voluntary separation scheme (VSS), a source familiar with the company’s restructuring said.

Those earning less than RM5,000 a month will be offered one and a half month’s compensation for every year of service or number of years left before retirement, whichever was lower.

Those earning between RM5,000 and RM10,000 will get one and a quarter month’s pay, while staff earning more than RM10,000 will be compensated with one month’s pay.

“The new compensation rate was announced by the management at a briefing (yesterday),” the source told The Malaysian Insight.

Previously, compensation was to be one month’s salary for every year of service or number of years left before retirement, whichever was lower.

The announcement of the revisions was made by Utusan Melayu executive chairman Abd Aziz Sheikh Fadzir during the briefing with about 500 staff members at the newspaper’s Kuala Lumpur headquarters.

The briefing was held two days after Utusan’s management met Deputy Human Resources Minister Mahfuz Omar.

Other terms remained unchanged, such as how the compensations would be paid out in – instalments over 12 months – the source said.

“The labour department will intervene and take action if terms in the VSS agreement are breached.”

Mahfuz had previous criticised Utusan over the instalment payment arrangement, saying that the group might face action under the Employment Act 1955 if it failed to pay the VSS compensation to its staff in one lump sum within 30 days of their termination.

“Management said the payment would take some time as the company had to sell some assets,” the source said.

Utusan’s union representatives also met the Industrial Relations Department director-general last week to hear views on the VSS offer.

The Malaysian Insight understands that the department had agreed to the plan to make the payments by instalments after listening to the views of the union and management.

Meanwhile, an Utusan National Union of Journalists (NUJ)representative said they had accepted the revised VSS agreement, even though they would have preferred that the compensation be paid in lump sum.

“It is estimated that more than 300 employees submitted their VSS applications. This compared with just more than 100 previously.

“Many more are expected to apply to fill up the VSS quota of 800,” said the NUJ rep, who declined to be named.

On September 21, Utusan offered VSS letters to its 1,500 employees in a restructuring exercise aimed at offloading at least 50% of its workforce to overcome financial constraints.

Utusan last made profit in 2011. Its accumulated losses until March was RM71.4 million.

Utusan is now rated PN17 after defaulting on bank payments and is at risk of delisting in a year’s time should it fail to regularise its finances.

It missed principal and profit payments totalling RM1.18 million to Maybank Islamic Bhd and Bank Muamalat Malaysia Bhd, and has failed to provide a solvency declaration to Bursa Malaysia.

For two straight months, Utusan had also failed to pay salaries on time.

In August, the company delayed salaries for its executives and on September 15, it again failed to pay salaries on time for its non-executive personnel, prompting journalists and photographers to plan a picket.

The company is only paying the September salaries this week.

Former ruling party Umno owns a 49.77% stake in Kumpulan Utusan Melayu Bhd, while tycoon Syed Mokhtar Al-Bukhari’s Nilam Setar Sdn Bhd is the second largest shareholder with 14.76%. – October 4, 2018.