The Malaysian Employers Federation says the human resources minister did not give the whole picture of their previous discussion when he said he was disappointed that employers were still opposing the Employee Insurance System despite the lower contribution rate.
MEF executive director Shamsuddin Bardan said he and HR Minister Richard Riot Jaem, in an August meeting with Second Finance Minister Johari Abdul Ghani, had agreed that the EIS would only be applicable to employees who are terminated or retrenched but not paid retrenchment or termination benefits, reported Free Malaysia Today.
“Only in these cases would the EIS be applicable, and the employee can be paid up to three months’ wages. That is all,” Bardan said.
“What the minister said in his statement was that the EIS was on top of the termination or retrenchment benefits, meaning that an employee is paid termination or retrenchment benefits by the employer and still collects the EIS,” Bardan said.
Riot also said the contribution rate for the EIS had been lowered from 0.5% to 0.2%, which would be contributed equally by employers and employees.
But Bardan said the EIS will not cover job matching, job training or retraining as this is done by the 1MOC (1Malaysia Outplacement Centre).
“This is why we agreed to collect 0.2% as the employees’ contribution,” he said.
They had even agreed that if the sum collected for the month was enough, there would be no need to collect further contributions for the month, Shamsuddin said.
“This would mean we would suspend the collection itself. At 0.2%, the collection per year would amount to RM600 million, which is more than sufficient to pay the non-payment of termination benefits.”
He said the minister and ministry were supposed to meet with stakeholders to discuss in detail some of the issues that remained unresolved before the matter was re-tabled in Parliament.
The ministry has not called such a meeting, Shamsuddin said.
Malaysian employers had no disagreements with what was agreed upon during the meeting, he said, but now the ministry was not keeping to what was talked about.
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