This was because companies are cutting costs and moving their business to other developing Asian countries.
MEF Executive Director Shamsuddin Bardan said MEF’s research showed that a lot of companies wanted to uproot their operations to Thailand, Vietnam and Laos after the government failed to provide a positive business environment to counter the challenging global economy.
He said companies are finding it hard to absorb the additional operating costs, especially after minimum wages were implemented nationwide on July 1.
This resulted in employers having to fork out more for the Employees Provident Fund (EPF) and Social Security Organisation (Socso), after salaries were increased from RM900 to RM1,000 for the peninsula and from RM800 to RM920 for Sabah, Sarawak and Labuan.
“We have done our ground work. The trend is worrying. Businessmen say there are too many additional costs imposed on them,” he told FMT.
He was asked to comment on a statement by Human Resources Development Fund (HRDF) that 36,000 employees were retrenched last year. Out of that, 19,781 employees took Voluntary Separation Schemes (VSS).
Shamsuddin pointed out that a lot of companies were fuming over the compulsory payment channelled towards training employees under HRDF.
He said companies do not mind paying the 1 per cent contribution, which is based on a company’s total wages to its staff, but are unhappy that 30 per cent out of the total contributions go into the HRDF common pool.
“Employers say the 30 per cent placed in the common pool reduces their funds to train their employees.”
Shamsuddin also commented on the proposed Employment Insurance Scheme to help retrenched workers in the country. He said it will be unfair if employers had to contribute to the fund.
“The government has to contribute. After all, the employers and staff pay taxes. Employers do not mind if the contribution to the scheme is shared by all.”
He proposed that the government set up a third EPF account where the staff and employers can contribute towards two months’ of an employee’s salary.
MEF hoped companies would not be told to shoulder the unemployment payouts alone.
It wants the government to contribute towards at least one month’s staff salary.
“The government can further chip in for the third month. The three months’ contribution can be spread over six months.”
He said this can be a breather for employees whose future could be uncertain at the moment as companies may choose to close down their operations to operate elsewhere.
Last week, hard disk maker Seagate Technology Plc and computer data storage firm Western Digital Corp (WD) said they were relocating the bulk of their operations to Thailand, causing many to lose their jobs.