PETALING JAYA: The Employment Insurance System (EIS) looks set to be on track for implementation now that stakeholders are “agreeable” to the lowering of the percentage of contribution.
Malaysian Trade Union Congress (MTUC) president Abdul Halim Mansor said during a recent tripartite meeting with the Government and stakeholders, the rate was agreed to be brought down to 0.2% each for employers and employees.
“It was a fruitful engagement carried out in a cordial manner which ended in all parties giving their full support to the EIS.
“We are very happy with this outcome and look forward to the EIS Bill being passed into a law and to take effect from next year,” he told The Star.
Abdul Halim said they had all along supported the EIS concept, saying it was “the struggle of the MTUC” since 1997.
In recalling the proposal back then, he said the MTUC had proposed a contribution rate of 50 sen but employers were against it.
Then in 2000, the idea was brought up again with a proposed RM1 coming just from workers. That too was shot down by employers.
Abdul Halim said despite handing over a memorandum to the Government, nothing came out of the proposal until 2007.
“That year, the issue of social security was taken seriously and hotly debated in the international scene.
“Then in 2011, the Government took a stand and set aside RM52mil. A tripartite project committee was also formed to study the design of employment insurance system for Malaysia in accordance with the guidelines under the International Labour Organisation,” he said.
Abdul Halim recalled that employers were willing to support the initiative under one condition – that the “lay off benefits” for workers be terminated.
He said several more rounds of negotiations were held between 2013 and 2015 on the EIS.
“MTUC proposed a quantum of 0.25% each for employers and employees and the Government agreed to this.
“Around February this year, we met the Prime Minister and relayed to him that the Government allocation (in 2011) had generated a total fund of RM65mil from the investment,” he said.
Abdul Halim said on May 1, the good news was announced by Datuk Seri Najib Tun Razak with the Government preparing the draft of the EIS Bill and another injection of RM70mil.
He said it was a proud moment for MTUC and that they would be handing over a memorandum to the Government “very soon”, containing some suggestions to finetune the Bill.
Among others, the MTUC wants the Bill to be in tandem with several existing laws such as the coverage entitlement of EIS until the age of 60.
“We are of the view that the EIS should act more as a protection scheme for laid off workers for up to six months and not so much as compensating them,” he said.
Abdul Halim also stressed that MTUC had no objection to the Social Security Organisation (Socso) managing the scheme.
He added that Socso had full access to the workers’ registry and over 40 years of experience, citing its success in setting up its own rehabilitation centres for affected workers.
“We hope the funds in the EIS will not be spent unnecessarily but used to help workers who lost their jobs. This is the main aim,” he said.
An Opposition lawmaker, Dr Michael Jeyakumar, said he was all for the EIS to be implemented in the country, similar to Vietnam and Thailand.
“I will definitely support the passing of the Bill to be made into a law when the Parliament convenes in October.
“Our stand is consistent that the welfare of workers must be a top priority. The EIS is a good start and the right step towards this cause,” said the Socialist Party of Malaysia central committee member.
Saying that the EIS was “long overdue”, Dr Jeyakumar urged the Government and Socso to take into account all the pertinent points raised during the coming debate of the EIS Bill by parliamentarians from across the divide.
He said on average, some 50,000 workers were laid off every year but almost one third of them did not get retrenchment benefits.
“Under the Employment Act, retrenched workers should be fairly compensated for losing their jobs and income.
“But because some of these companies are going under, they will get nothing,” said the Sungai Siput MP, adding that the EIS could help to alleviate their difficulties in such a dire situation.
Social activist Tan Sri Lee Lam Thye also expressed his support for the Bill to be passed to safeguard the welfare of employees.
Lee said it was “necessary and timely” for the country to implement the EIS to help workers who are laid off.
“But only those who are genuinely retrenched should be given assistance so that they can continue to support their family.
“I believe this is the main objective of the Government in introducing this scheme,” he said.
Lee also called upon the Government and stakeholders to discuss the provisions in the Bill thoroughly so that all parties are “agreeable” to avoid any dispute.