KUCHING, April 23: Retrenchment of workers after the inevitable adverse economic consequences arising from the Covid-19 pandemic will affect all sectors and would further damp the economy as domestic consumption and demand will fall further, opines Malaysian Trades Union Congress (MTUC) Sarawak secretary Andrew Lo.
According to Lo, it will be very challenging for business to pick up even after the Movement Control Order (MCO) period is lifted and this will result in either companies having to close or to reduce operations and consequently retrench workers.
“Unfortunately, our country’s social safety net has too many gaps. While those under the Employment Act and Sarawak Labour Ordinance will be entitled to termination and lay-off benefits up to 20 days’ wages for each year of service, those earning above RM2,000 will depend on their contracts and also on the ability to take their case to the Industrial Court for compensation,” he revealed in a press statement today.
Lo also disclosed that while the Industrial Court generally awards compensation of one month’s salary for each year of service, this will also depend on the companies’ ability to pay.
He pointed out that retrenchment benefits do not have priority over secured debts and all too often, workers are unable to recover their benefits.
“While it is fortunate that we introduce the Employment Insurance Scheme in 2018, the benefits are minimal with an average of only half-a-month salary for 6 months.
“If it is not for some employer groups’ undying objection, the scheme could have started as early as 2010, where the contribution rates would have been higher and the scheme would have built up sufficient funds to offer a more comprehensive safety net,” Lo opined.
He also noted that apart from assisting workers in such difficult time, employment benefits will also assist the business as the money will be circulated back into the economy and help businesses to recover.
“This in turn will help prevent a vicious circle and as usual, poor workers will end up with the short end of the stick,” he added. — DayakDaily