BEFORE the Covid-19 pandemic shut down most of the economy, Zainul Azman and his wife earned a combined total of about RM4,000 a month for the family.

On Labour Day today, he is not sure if they will still be able to earn the same income, even if the movement control order (MCO) is eased soon.

Azman is one of roughly 2 million workers who are likely to lose their jobs this year, either during the MCO or soon after, as the economy struggles to revive itself.

Employers and unions estimate the figure reflects the scale of job losses Malaysia will experience due to the economy’s shutdown during the MCO and the difficult recovery period afterwards.

The fate of Azman’s family highlights just how grim Labour Day is this year, said union federation boss Shafie B.P Mammal, who described it as the worst in the celebration’s history.

“It is not just the job losses, which we all know are already happening and are due to happen,” said Shafie, who is president of the Union Network International-Malaysia Labour Centre (UNI-MLC), a grouping of trade unions.

“It is the uncertain future of whether workers who lose their jobs can find new employment and, if they do, whether those jobs will pay the same as previously.”

Azman’s experience is a case in point. Before the MCO, the 52-year-old made RM80 a day driving a dump truck, ferrying materials for construction sites.

The job had been subcontracted to him by another company and, ever since the MCO was imposed on March 18, he has not heard from that firm at all.

“I don’t know if I can get that job again after the MCO. I’ll have to see. I was just a subcontractor. No work, no pay. I haven’t even heard back from the company,” Azman said.

His wife’s factory had also been closed during the MCO, but her employer has so far paid her basic salary.

UNI-MLC’s Shafie said workers like Azman, who are considered to be in the informal sector, are in even more dire straits because they lack basic labour protections such as unemployment insurance. 

Even Azman’s wife, who is still employed but not working during the MCO, is not secure, said Shafie. 

“We have received reports that companies are quietly planning to downsize and retrench their staff.

“After the MCO is lifted, the company can suddenly say it is unable to continue operating at full capacity and start retrenching.

“So, we won’t know the full extent of the damage until the next few weeks.”

The MCO was enforced on March 18 to break the chain of Covid-19 infections, which has so far infected 6,002 and killed 102.

Creating room for locals

A survey among Small and Medium Enterprises (SMEs), which employ about 66% of all Malaysian workers say that 30% of such firms have already started shedding workers after demand for products and services flatlined during the MCO.

Another 25% of SMEs say they are closing down for good sometime in May, which will cause more job losses, said SME Association of Malaysia president Michael Kang.

A further 25% of SMEs say they are suspending operations for three months due to rationalisation plans, which mean they are also downsizing and digitising more of their operations.

The remainder are saying that they have enough cash to last till May but even with aid from the government, they might have to shed some staff in order to continue operating, said Kang.

These developments are also echoed by the Malaysian Employers Federation (MEF), which has said some of the companies under its umbrella may retrench up to 50% of their staff.

“They say they have no choice but to do so to save their companies because there is no demand for their products and services,” said MEF executive director Shamsudin Bardan.

“This is why we have proposed the government start plans for sending back foreign workers, especially those who are undocumented and who are illegally operating businesses.”

“During the 1998 financial crisis, the government sent home about 800,000 foreign workers and this allowed jobless locals to find work.”

A March 2019 World Bank study estimated that in 2017, the total number of foreign workers in Malaysia ranged from 2.96 million to 3.26 million.

Of these, the number of “irregular” or undocumented migrant workers was between 1.23 million and 1.46 million.

MEF’s Shamsuddin said there are also about 150,000 foreigners classified as “category three expatriates”, who earn incomes of RM5,000 and below and who are employed as supervisors and low-level executives.

“These can also be sent back to create room for the fresh graduates who are entering the labour market.” – May 1, 2020.