A NUMBER of employers have started negotiating with staff to take unpaid leave or pay cuts as a way to sustain business through and after the movement-control order (MCO) period, reports The Star.

SME Association of Malaysia president Michael Kang said some companies have started discussing new terms with workers as they are left with little choice.

“High earners have been asked to take pay cuts in exchange for company shares, but both parties must agree to it.

“Bosses want to retain their staff, unless they can’t sustain their businesses.”

He was responding to Prime Minister Muhyiddin Yassin’s announcement on a RM10 billion stimulus package to help small and medium enterprises and micro organisations mitigate the economic impact of Covid-19.

Muhyiddin had said Putrajaya was aware that employers were finding it difficult to retain workers in this difficult period.

“Because of this, the government has agreed to allow discussions between employers and employees on the terms of employment, including the possibility of imposing a pay cut or allowing staff to go on no-pay leave.

“Both employers and employees can seek advice from the Manpower Department. What’s important is that there must be a win-win situation for both parties.”

The MCO was enforced on March 18 to break the chain of coronavirus infections in the country. So far, Malaysia has registered 3,963 cases with 63 fatalities.

The restriction order, now in its second phase, is due to end on April 14. Putrajaya is expected to announce on Friday whether there will be an extension.

Meanwhile, Malaysian Employers’ Federation executive director Shamsuddin Bardan said the decision to allow firms to discuss the terms of employment with staff will enable employers to reduce cost while maintaining their workforce.

“This is to ensure employees still have a job after the MCO, and even possibly after the whole impact of Covid-19 is over.”

Federation of Malaysian Manufacturers president Soh Thian Lai said the negotiations between employers and employees will help companies balance their financial standing.

“This is because production in some businesses has stopped, while companies are worried whether their cash flow can sustain them during and after the MCO. Businesses will have to be prepared for what comes after the MCO.”

Malaysian Trades Union Congress president Abdul Halim Mansor said there should not be any retrenchments for the next six months.

“Companies must not implement pay cuts if they have accepted the government subsidy.

“Employees’ leave should not be taken away if they can’t come to work because of the MCO.” – April 8, 2020.