Make retrenchment illegal to protect workers from lay-offs, says MTUC

MTUC says workers should be protected from unscrupulous employers during the movement control order period.

PETALING JAYA: The country’s largest employees group has urged Putrajaya to make retrenchments illegal for a certain period as it expects workers who are not covered by the wage subsidy initiative to be at risk of lay-offs.

In a statement, Malaysian Trades Union Congress (MTUC) secretary-general J Solomon said workers who earn between RM4,000 and RM8,000 are at the mercy of their employers.

Under the initiative, which is part of the RM10 billion aid package for small and medium-sized enterprises (SME), bosses are given a wage subsidy of between RM600 and RM1,200 for each employee earning less than RM4,000 for three months.

The employers however must retain their workers for six months.

Solomon said those earning RM4,000 to RM8,000, who comprise 30% to 40% of the SME workforce, could consequently lose their jobs as companies look to reduce costs.

“The immediate solution for this would be for the government to introduce an emergency employment regulation to make retrenchment illegal for a stipulated period of time.”

Solomon said while MTUC appreciated that these workers would be given one-off cash aid of RM1,000, this was not enough to sustain them beyond two weeks.

“What this category of workers urgently requires is a firm commitment from the government and employers that their jobs are safe,” he said, adding these workers mostly live in urban areas where the cost of living is high.

“Salary cuts or any job loss would be catastrophic for them in every aspect.”

Solomon said MTUC had already received some 300 complaints from workers who were forced or “persuaded” to go on unpaid leave or to accept pay cuts just three weeks into the movement control order (MCO) period.

“This is happening with utter disregard for the government’s strong warnings that employers must not lay off workers or cut their salaries during the MCO period,” he said, adding that the complaints so far were likely just the tip of the iceberg.

He urged the government to take strict measures to protect the livelihood of workers from unscrupulous employers who would benefit from government aid and still victimise workers through loopholes.

“We smelt a rat when SMEs retaliated against the disclosure of financial statements to establish the decline of financial performance to justify lay-offs or pay cuts.

“This can be construed as certain SMEs attempting to make an unjust enrichment by fraudulently claiming the aid or the subsidy granted by the government.”

In this respect, he said, MTUC was concerned that SMEs would be allowed to renegotiate their employment contracts with workers, including an option for salary deductions and unpaid leave during the MCO.

“The prime minister’s generous gesture to the SMEs is clearly detrimental to the interests of workers who now risk wage cuts to their already smaller salary due to the MCO which has denied them overtime and allowances.”

Giving employers room to rewrite their employees’ contracts at this point in time, Solomon said, would have dire consequences on the survival of workers.

“While the government says the revised contract must be mutually agreed upon, it is common knowledge that employers have plenty of subtle arm-twisting tactics to force workers into submission, including the threat of retrenchment or voluntary separation schemes.”

He called on the government to revoke the approval to review employment contracts, saying existing contracts be honoured.

“Workers should not be the easy target in reducing costs while employers benefit from government assistance during bad times and dish out low wages to workers during good years.”

With the assistance offered to SMEs, from cash to zero interest loans, the onus was now on companies to keep their businesses afloat and protect the jobs of their workers, he said.

“Claims of being financially unable to pay wages given all the assistance they have received from the government will be construed as fraud.

“If they face any shortfall, they should use part of the government’s various financial packages to sustain the workers and stop making excuses at every turn to lay off workers or cut their salaries.”