Press Digest - MEF against gov't move to implement Employment Insurance System

THE Malaysian Employers Federation (MEF) is against the government's move to implement the Employment Insurance System (EIS) which is aimed at helping workers who lose their jobs.
MEF executive director Datuk Shamsuddin Bardan said the federation has submitted a memorandum to the government stating the reasons for its objection, Sin Chew Daily reported today.
Instead, MEF and some private enterprises have jointly suggested that the government set up a savings scheme to help retrenched workers who are unable to secure a job within a specific period.
"Under this (savings) scheme, we suggest the savings concerned be credited into Account 3 under EPF.
"The advantage of this savings scheme is that if an employee has never been retrenched, the savings can be withdrawn upon retirement.
"And since it is held under EPF, this savings will be paid interest."
Explaining the concept of the savings scheme, Shamsuddin said it is proposed that the employer, employee and government contribute an amount equal to one month's salary of the employee.
While both the employer and the government will have to contribute the full amount upfront, it is suggested the employee should contribute 1% of his/her salary each month until the aggregate reaches a month's salary.
In the event of retrenchment, the employee can withdraw first his/her contribution, following by the contributions made by the employer and the government, he said.
He added that if there is no retrenchment, the contribution made by the government will go to a foundation.
MEF has 5,300 members who employ a total of some 2.5 million workers.
Meanwhile, Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor said the congress welcomes the government's decision to implement EIS.
He said the EIS, which the congress proposed in 2000, will benefit some 6.5 million workers in the country.
On March 9, Deputy Human Resources Minister Datuk Ismail Abd Muttalib told the Dewan Rakyat the Economic Planning Unit has approved the EIS planning papers, adding that it will be presented to the Cabinet soon.