THROUGHOUT the movement-control order to curb Covid-19, the Malaysian Trades Union Congress (MTUC) repeatedly urged Putrajaya to put in place emergency employment regulations, which will prohibit employers from laying off employees. 

These include short-term measures designed to safeguard jobs and keep employees and employers afloat while the government devises a long-term exit plan from the MCO towards normal operations.

Putrajaya has laid out a slew of measures under the RM260 billion Prihatin and RM35 billion Penjana economic stimulus packages to retain jobs. 

These include the wage-subsidy programme, where the government subsidises partially salaries provided employers do not retrench workers for six months. The government said this measure saved more than two million jobs. 

MTUC, however, wants the government to make retrenchments illegal under the regulations that can be put into force by the Human Resources Ministry.

In a letter to minister M. Saravanan on April 14, MTUC said under the regulations, the ministry is empowered to stop employers from retrenching employees, imposing wage cuts and forcing compulsory leave for a period of one year until April 2021.

Any employer in breach of this can be fined RM10,000 or jailed for six months or both, under the regulation.

However, Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan labelled MTUC’s demand as unreasonable.

“Companies cannot be forced to keep their employees if they have more manpower than required.

“Most employers, particularly the micro enterprises with fewer than five employees were severely impacted during the MCO and more than half of about 650,000 of such employers ceased operations,” he told The Malaysian Insight. 

“Their severe cash-flow problems were made worse when the government insisted that employers pay full wages and allowances during the MCO.” 

He added that many employers were struggling to make ends meet during the conditional MCO as they could only operate at a 50% capacity at best, while also having to adhere to stringent standard operating procedures (SOP). 

“All these difficulties and limitations resulted in a sharp rise of unemployment in April to 780,000 from 610,000 in March,” Shamsuddin said.

Unions should not accuse employers of being “trigger happy” when it comes to retrenching workers, he said.

“Employers are fully aware that it is very costly to conduct retrenchments as trained employees need to be released during the downturn. Employers will need to recruit new employees and start all over again when the economy recovers later. 

“That is why retrenchment will only be done as a measure of last resort.”

Even with the country in the recovery MCO phase now, employers cannot recoup losses due to weak demand for products and services in both the domestic and export markets, he added. – June 23, 2020.