MEF: Number of retrenched workers reported only tip of the iceberg

PETALING JAYA: The number of retrenched workers announced by the Labour Department is only the tip of the iceberg, said Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan.
He said employers who have five workers or less do not have to report their retrenchment exercise to the Labour Department.
He pointed out that as result of this the figures of retrenched workers can be higher than the figures provided to The Sun.
"The economic outlook at present is not so good and employers are looking at every possible way to cut cost and retrenchment is one of the possible options.
"There will likely be a spike in the number of people being retrenched before July 1 this year as the new minimum wage policy comes into effect," he said.
During the 2016 budget Prime Minister Datuk Seri Najib Abdul Razak announced that the minimum wage for employees in Peninsular Malaysia will be raised by RM100 to RM1,000 per month and for employees in East Malaysia it will be increased from RM800 to RM920.
Shamsuddin said this spike may happen because employers will be looking to cut their retrenchment cost.
He said more and more employers have been approaching the MEF on ways they can be helped in reducing their cost.
"Up till now about 100 or more of our members have approached us to find out about the best practices involved in the retrenching workers.
"Most of these employers have in their employ a minimum of 50 workers," he said.

Malaysian Trade Union Congress (MTUC) Secretary General N. Gopal Krishnan said said the figures by the Labour Department may not actually reflect the number of people retrenched.
He pointed out that those who take up the offers from schemes such as the voluntary separation scheme and mutual separation scheme are not included in the number of people retrenched.
He added that foreigner workers that are retrenched are also not included in the figures.
"The first sector to hit by major retrenchment is usually construction sector and this followed by the automotive sector," he said.
Gopal Krishnan said as people start cutting down on expenses they will also look at not buying new vehicles.