The EIS bill benefits gov't more than workers

It is reported that Parliament has approved the EIS Bill 2017 and is now awaiting the senators’ endorsement. Human Resources Minister Richard Riot Jaem announced that Socso will start collecting contributions from January 2018.

As such, both employers and 6 million workers will contribute about RM72 million every month enabling Socso to amass more than RM800 million in the first 12 months.

No unemployment relief for 12 months

Unfortunately, the Bill imposes a twelve months waiting period, thus depriving payment of unemployment relief to close to 50,000 employees who may lose their jobs in 2018.

The government’s reasoning that the fund must be allowed to accumulate in order to enable Socso to pay out is not valid. The cost of paying out 80 percent of a month’s salary to four thousand retrenched workers will cost RM9.6 million whereas monthly collection will be more than RM72 million.

Responding to employers’ objections, Socso has repeatedly stressed that EIS is based on the principle of solidarity. However, by imposing a twelve-month waiting period the government has blatantly violated the concept of solidarity.

Trade Unions’ input ignored

The only change in the new bill is the rate of contribution. Thanks to the association of employers, their intensive campaign has helped reduce the rate of contribution by more than 50 percent.

During a recent dialogue with the Second Finance Minister Johari Abdul Ghani, trade unions’ and employers’ representatives were invited to give their input on the draft bill to Human Resources Ministry and Socso.

Eighty-two union leaders prepared their submission which was forwarded to the prime minister, Human Resources (HR) minister and director general of Socso through MTUC President Abdul Halim Mansor.

Trade union leaders, however, were deeply disappointed that neither the HR minister nor the director general of Socso responded to the MTUC president’s request for a meeting.

The new bill presented for the second time at the Parliament shows that trade unions’ input and proposals have been completely ignored. No explanation was given for its rejection.

Every year, about 5000 to 6000 retrenched employees are deprived of compensation due to them under the Employment Termination and Lay-off Benefits regulations. At the drafting stage of the EIS ACT, the HR ministry has informed trade unions and employers that the proposed bill they will find ways to resolve this matter.

Trade Unions are now disappointed that the government has failed to make any provision on this important aspect.

Management committee remains lopsided with government representatives

The government is not required to make regular contributions. Only workers and employers are required to make monthly contributions.

But despite objections, the committee empowered to manage the fund will be dominated by government representatives. The breakdown of government representation as followed:

• Representing various government departments – 11
• Representing workers – 3
• Representing employers - 3
• Representing experts – 3

The constitution of the committee would make it impossible for trade union and employers to initiate progressive and beneficial changes in the future.

Many proposed changes were rejected without attempting to provide any explanation.  The government has rejected trade union’s proposals on the following:

• Section 77: Why appoint a collecting agent?
• Section 30: Loss of employment due to;

1. Fixed Term Contracts
2. VSS / MSS
3. Completion of work

Are these categories of employees required to make a contribution?

• Section 44 – Is there right of appeal against arbitrary rejection?
• Section 45 – Why establish institutes? Trade Unions feel that accumulated funds should be utilized to enhance quantum of unemployment relief.
• Section 82 – Power to take over companies – Is Socso equipped with the necessary expertise to take over and efficiently manage companies which go into receivership?
• 4th schedule – Job search allowance. Unemployment relief in the name of Job Search allowance will be paid as follows:

1. 1st month – 80% of Salary
2. 2nd month – 50% of Salary
3. 3rd & 4th month - 40% of Salary
4. 5th & 6th month – 30% of Salary

• Loss of employment in first 12 months – No benefit

Trade Unions have proposed that retrenched employees should be paid an unemployment allowance of 50 percent for a minimum duration of 12 months. Despite the availability of more than adequate funds through workers and employers contribution, the government has rejected this proposal.

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G RAJASEKARAN is a member of the Metal Industry Employees' Union- Mkini

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