PSM workers bureau coordinator M Sivaranjani said the proposed Employment Insurance Scheme (EIS) would act as a safety net for workers, especially if they were laid off from their jobs should the companies hiring them become bankrupt.
She explained that the EIS would function in the same way that the Social Security Organisation (Socso) operated in supporting workers who suffered from accidents.
“Historically, once every 10 years an economic crisis makes a direct hit and many companies fold up,” she said in a statement yesterday.
“After a company becomes bankrupt, it does not have any obligation to resolve salary arrears or compensation payments, although the Employment Act 1955 clearly states the lay-off benefits are the responsibility of employers.
“In such a situation the workers are made into victims,” she added, declaring PSM’s support for the proposal.
She said party members would be present in Parliament on March 29 to distribute petition cards to support the EIS.
On March 9, Deputy Human Resources Minister Ismail Abdul Muttalib told the Dewan Rakyat that the EIS was targeted for implementation next year.
He said the planning papers for the scheme had been approved by the Economic Planning Unit and would be deliberated by the Cabinet soon. A draft bill on the EIS would then be formulated to be tabled at the next parliamentary sitting.
Under the scheme employers and workers would both be statutorily required to contribute towards the worker’s insurance account, in a similar way they now do for Socso.
The following day, MEF executive director Shamsuddin Bardan voiced the federation’s objection to the plan.
He said the scheme was not fair and would lead to increased costs that would burden private companies, many of which were currently facing financial difficulties and, therefore, had to reduce their workforce.
Prime Minister Najib Razak was reported to have said in 2015 that the scheme was aimed at extending the social safety net for workers and providing them with job counselling.
He said the insurance scheme would also increase workers’ skill levels through training and retraining, and that this would benefit employers who would be able to hire workers with suitable skill sets.