PETALING JAYA: Two economists have questioned the wisdom of a call by the Malaysian Trades Union Congress (MTUC) for Putrajaya to make retrenchment illegal for a certain period, saying it appears to have disregarded the long-term interests of workers.
Such a regulation could force many businesses into bankruptcy, resulting in the loss of jobs for great numbers of workers, said Yeah Kim Leng of Sunway University and Carmelo Ferlito of the Institute for Democracy and Economic Affairs.
They were commenting on a statement MTUC secretary-general J Solomon made on Tuesday, in which he called for the introduction of an emergency regulation that would make it temporarily illegal for employers to lay off workers so that those not covered by the government’s wage subsidy initiative would be protected.
Solomon said workers earning between RM4,000 and RM8,000 were at the mercy of their employers and could lose their jobs as companies look to cutting costs.
Yeah told FMT Solomon’s proposal would yield only short-term benefits for employees. The threat on the viability of their employers’ businesses meant their jobs would remain at risk, he said.
He added that businesses should be allowed to continue managing their human resources according to their needs while abiding by existing labour laws.
“Moreover,” he said, “business and investor confidence will be irreparably damaged if the rules of the game are changed. The consequence will be delayed recovery and reduced economic dynamism and resilience.”
He said flexibility and the allowance of room for negotiations on pay cuts, short workdays and downsizing would benefit the most number of employees and firms in both the short and long terms.
Yesterday, Malaysian Employers Federation executive director Shamsuddin Bardan said no one would be willing to invest in Malaysia if the government were to accept MTUC’s proposal.
Ferlito told FMT he largely agreed with Shamsuddin.
He said it would be excessive to make it unlawful to sack workers but it would be acceptable if, for example, employers were required to maintain their workforce sizes to enjoy certain subsidies.
He said laying off some workers might be the only way for some businesses to keep from shutting down.
While acknowledging that government policy must pay attention to social concerns, he said Putrajaya must be wary of “potential unintended consequences”, such as the permanent shutting down of some companies.