FMM in the News - The Edge - August 3, 2017

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) said it is “most unhappy” with the tabling of the Employment Insurance System Bill 2017 for first reading in the Dewan Rakyat on Tuesday, and that it is “most concerned” that the proposed law would cause deterioration in work attitude and commitment.

In a statement, it said press reports had implied that the bill was aimed at providing financial assistance to all who are unemployed, including those who took up voluntary or mutual separation schemes (VSS or MSS), and will even allow dependents to make claims in the event an insured employee dies, falls into a coma or becomes of unsound mind.

“The transfer of benefits to dependents is confusing. This provision had never been highlighted during [the government’s] engagement with employers,” it said yesterday. “[The] FMM reinforces that workers under the VSS and MSS will be receiving double benefits — from their severance package and the EIS (Employment Insurance System). Likewise, those who were retrenched and had received their ETLB (employment termination and lay-off benefits) would be receiving double benefits,” it said.

Contrary to press reports, it said that in all engagements with employers in which the FMM had participated, the human resources ministry always said the EIS was to protect the interests of the workers who had been retrenched and were not paid their ETLB, and to help tide them over when seeking new employment.

Hence, it said “employers need to be given access to the Bill to review the details, so that we could further highlight our concerns”.

It also noted that human-related costs would rise significantly without commensurate increases 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,,” it added.

The EIS Bill was tabled by Human Resources Minister Datuk Seri Richard Riot Jaem. According to reports, it contains guidelines to assist in the re-employment of an individual and payment of benefits to dependents in certain circumstances. It also provides for the introduction of the Employment Insurance Fund, which will operate and manage insurance contributions collected from both employers and employees.