Responding to Klang MP Charles Santiago, who said the EIS would eventually end up burdening both workers and employers due to the high contributions required, Sivarajan laid out some numbers of his own to prove his point.
In a statement today, he said according to the EIS, a worker who loses his job can apply to receive a job search allowance or early re-employment allowance, reduced income allowance and training allowance.
Taking the example of an individual earning RM2,000 monthly, he said the worker would receive allowances for six months as follows: 80% of his last salary for the first month, 50% for the second month, 40% for the third and fourth months, and 30% for the fifth and sixth months.
“Thus if the worker earns RM2,000, he/she will receive RM1,600 (first month) + RM1,000 (second month) + RM800 x 2 (third and fourth months) + RM600 x 2 (fifth and sixth months), total amounting to RM5,400.
“The worker is also entitled to go for training for six months. The EIS fund will pay directly to the training provider. Let’s estimate the fees to be RM10,000 total for six months.
“Thus the worker would receive RM15,400 in total benefits.”
Sivarajan said according to statistics from the Malaysian Employers Federation (MEF), some 50,000 workers lost their jobs in 2016.
Going by these numbers, he said the total payout would be RM770 million (RM15,400 x 50,000).
Adding another 30% for the estimated operational cost for applications to be processed and proper disbursements made to eligible workers, brought the total to RM1 billion, not far off from the RM1.56 billion that Santiago had estimated.
Citing statistics from the human resources ministry, Sivarajan added that a third of the total retrenched workers suffered when their employers wound up their businesses.
If a third, or 16,000 workers, received their rightful employment termination layoff benefits (ETLB), estimating RM20,000 each for a worker who is retrenched after 20 years of service, he said this would amount to RM320 million.
“So it’s still affordable,” he said, referring to the RM1.32 billion grand total.
Sivarajan said he agreed with Santiago that the contributions must be used prudently without wastage.
However, he added that Santiago and other MPs should push further and fight for more benefits from the fund for the workers, instead of complaining about the possible increase in cost for employers.