Spokesmen for the Malaysian Employers Federation (MEF) and the Malaysian International Chamber of Commerce and Industry (MICCI) described the idea as impractical.

The suggestion was made recently by economist Carmelo Ferlito of the Center for Market Education.

Ferlito said a private sector effort to help employees in need would be better than allowing them to dig into their Employees Provident Fund savings.

MEF president Syed Hussain Husman said such a fund would not solve national issues arising from natural disasters.

“It should be noted that natural disasters are not an employer-employee relationship issue. Natural disasters and their aftermath have to be managed by the government,” he told FMT.

“Employers already provide many benefits to employees, such as paid holidays, paid annual leave, group insurance, medical and hospitalisation coverage and many others.

“It is not feasible to create internal funds to cover natural disasters.”

Syed Hussain said businesses were currently busy trying to recover from long lockdowns because of the Covid-19 pandemic and the effect of the recent floods on operations.

He said most employers were facing cash flow challenges and would not be receptive to any proposal that would impose additional costs.

He also said all Malaysians needed to be covered by a national insurance scheme against natural disasters.

“Those who are able to will need to pay the insurance premiums, but for those who are not financially able, the cost should be borne by the government.

“A national insurance scheme against natural disasters will do away with the current ad hoc practice of providing assistance to those affected by natural disasters,” he said.

MICCI executive director Shaun Cheah said the administration of the suggested fund could give rise to issues of governance and management.

“There have been cases of misappropriation of funds when managed by staff representatives,” he said.

“Also, companies may dip into these funds for investment purposes.

“For privately managed funds, there can be issues of when, who and under what conditions or quantum the money is to be paid out.

“What about employees who have contributed but have left the company?”

He said it would be better for individuals to obtain disaster insurance managed by a third-party insurer, adding that employers could subsidise the premium payments for their employees.