Parti Sosialis Malaysia, which has been pushing for the new law, welcomes the move.
KUALA LUMPUR: The cabinet has approved a bill to create a special insurance programme for retrenched workers.
Human Resources Minister Richard Riot Jaem said the cabinet gave the nod on Friday, he told reporters today after launching the Human Capital Strategic Initiatives by the Human Resource Development Fund at the Hilton Hotel here.
Asked if the government would introduce the new bill in the Dewan Rakyat by this year, he said: “I leave it to the prime minister to make the official announcement even though I am in charge of human resources.
“It is a national bill after all,” Riot said.
Parti Sosialis Malaysia (PSM) has been pushing for the workers’ retrenchment fund for years, saying it would help the employees get compensation if their companies go bankrupt.
Under the scheme, employers and workers are required to contribute towards the worker’s insurance account, the same way they now do for Social Security Organisation (Socso) coverage.
Responding to Riot’s statement, PSM’s central committee member S Arutchelvan hailed the minister’s announcement.
“This means, once the cabinet has agreed to the bill, they must take it to Parliament.”
The proposed bill had not gone down well with the Malaysian Employers Federation (MEF), which claimed it was not fair and would lead to increased costs that would burden private companies.
Earlier this month, Riot’s deputy, Ismail Abdul Muttalib, told the Dewan Rakyat that the proposed Employees’ Insurance Scheme was targeted for implementation next year.
He added that the plan for the scheme had been approved by the Economic Planning Unit.