Unanimous vote for EIS Bill, but with conditions


KUALA LUMPUR: The revised Employment Insurance System (EIS) Bill was passed unanimously at the Dewan Rakyat today, a fund to protect 6.5 million local workers, in case they are laid off.

MPs from Barisan Nasional, DAP, Amanah, PKR and PAS supported the bill after five hours of debate but some MPs said they supported the bill with conditions.

Shamsul Iskandar Akin (PKR-Bukit Katil) and Charles Santiago (DAP-Klang) want the government to contribute as well to the EIS fund to ensure the mechanism will be an effective social safety net.

“All stakeholders should contribute to make the fund a success. But now it only involves the employers and employees. In Vietnam and Canada, the government pays an equal amount towards the fund.

“I suggest the government too pay 0.2% of the total salary of an employee as paid by an employer (0.2%) and employee (0.2%). The government cannot privatise the fund or the government will have no role to pay,” Santiago said during the debate.

Santiago also wants Parliament to oversee and monitor the fund.

The revised EIS Bill has maintained the monthly contribution to the scheme as the equally shared responsibility of both employer and employee.

Monthly contributions are based on fixed rates, ranging from the lowest at 10 sen to a maximum of RM59.30 for those whose monthly wages are capped at a maximum of RM4,000.

12-month protection

Santiago said giving employees six months to be retrained and secure employment was too short a period.

Santiago wants the government to contribute as well to the EIS fund to ensure the mechanism will be an effective social safety net.
Santiago wants the government to contribute as well to the EIS fund to ensure the mechanism will be an effective social safety net.

“Also, the people who will be displaced will be workers in their late 30s, 40s or 50s. These workers will likely be replaced by younger or migrant workers.”

Under the job search allowance, an unemployed worker can get 80% of assumed monthly wages for the first month, 50% for the second month, 40% for the third and fourth months, and 30% for the fifth and sixth months.

But Che Mohamad Zulkifly Jusoh (BN-Setiu) suggested for the compensation to be extended until the unemployed worker is able to secure a new job after the training.

“We should help them until they get a job.”

Human Resources Minister Richard Riot in his winding-up speech said even though the government was not contributing, it is launching the fund with RM120 million.

“The government has also contributed for the training. Therefore, the government does not have to contribute towards the fund.”

To another question by Santiago, the minister explained that workers aged 40 to 50 who are retrenched will be given appropriate training so that they can be matched with other jobs.

However, he said the training given to such workers cannot be combined with the present Human Resource Development Fund.

Retrenched workers are also entitled to an early re-employment allowance, reduced income allowance, and training allowance.

The insurance scheme also covers staff involved in a voluntary or mandatory separation scheme, or those made redundant due to business restructuring or closure.

It also offers protection for those whose resignation is tantamount to constructive dismissal or due to threats to the insured or family including sexual harassment.

Also, in case of death, the worker’s spouse will not be receiving any protection under the fund.

Employers are not allowed to reduce an employee’s salary indirectly or directly owing to contributions made to the scheme.

Failure by employers to comply with the scheme or employees making false claims could lead to a maximum RM10,000 fine or a jail term of up to two years, or both, upon conviction.

The EIS will be administered by the Social Security Organisation (Socso).

It was reported that almost 40,000 workers lost their jobs in 2015 and 2016.