Khazanah's package for MAS employees a masterstroke

PETALING JAYA: Khazanah Nasional Bhd has turned the tide of discontent among employees at Malaysian Airline System Bhd (MAS) in a masterstroke, with its latest act of not only honouring the collective agreement of the eight unions of the airline on the terms of severance package but also choosing to reward long serving employees with a base payment package.
Employees morale have been at an all-time low ever since the news of the chopping of 6,000 jobs was announced last year. A couple of unions have even threatened protests in a bid to stave off the impending terminations.
However, Khazanah's deal for MAS employees looks set to silence its critics who see the retrenchment exercise as a "reward" for non performing employees.
According to an internal circular MAS sent out to its employees obtained by SunBiz, the compensation package offered by Khazanah not only details an unexpected severance package for those who will be told to leave but also a base payment package for all employees of MAS effectively rewarding long time performers of the airline.
This payment is to be given to all MAS employees based on their years of service with a multiplier that is tiered by their respective Grade groups.
The Grades are, non-executive, executive, manager and top management, which consists of vice president roles and above.
It is understood that employees who fall under the Employment Act 1955 (with a monthly pay of RM2,000 for those in Peninsular Malaysia and RM2,500 for those in Sabah and Sarawak) , will come under the Employment (Termination and Lay-off Benefits) Regulations 1980 which provides for: ten days' wages for each completed year of service of less than two years; 15 days' wages for each year of two to five years' service; 20 days' wages for each year of service exceeding five years.
The multiplier for all other employees is guided by the principle of, the higher the grade the lower the multiple.
The base package is on top of the severance package for those receiving either termination or employment letters.
A source familiar with the matter said the pay packages are above and beyond what the unions had asked for and all credit for it should go to Khazanah.
Khazanah informed the eight unions of MAS, which have been at loggerheads with management on the issue of severance, of the surprise package Tuesday, following a late night meeting with Prime Minister Datuk Seri Najib Abdul Razak, who gave the final go-ahead for the package.
It is understood that the airline's largest union Malaysia Airlines System Employees Union Peninsular Malaysia's (Maseu) stole Khazanah's thunder by announcing the details of the severance package, which was due to be released by MAS yesterday.
According to the deal crafted by Khazanah, those who will eventually be offered employment at the new company Malaysia Airlines Bhd (MAB) will also not be left out.
Those who accept employment at MAB will be paid a sign on payment of two months pay with their first month's salary at the newco and another two months upon completing 18 months service at the newco what it calls "retention payment".
"The sign on and retention payments represent the vision of MAB to be a competitive player in the marketplace. These are offered to attract and retain talent who are ready and willing to be part of the aspirational, high performance culture demanded of a start-up aimed towards profitability," the circular said.
MAS is due to despatch letters of employment and termination to employees in the next few days to ensure that all employees receive them by June 5, 2015. Those accepting employment are to inform MAS of their intention by June 12, 2015.