FMM urge govt for tripartite consultation on EIS

The Federation of Malaysian Manufacturers (FMM) has strongly urged the Government to hold tripartite consultation on the Employment System (EIS) before tabling the Bill to Parliament in June.

The association said the consultation is aimed to achieve a common understanding of the EIS model and its implications to employers and employees.

It also views the EIS contribution rate of 0.25% each for employer and employee as excessive.

With the consultation, FMM also believes consensus on a model, which is fair and equitable to all stakeholders as well as sustainable, without imposing unnecessary burden on businesses can be achieved.

Over the past 6 years, actual retrenchment figures reported by the Ministry of Human Resource (MOHR) were between 20,104 and 38,499 persons. These figures included those under Voluntary Separation Schemes, FMM said.

FMM is strongly of the view that SOCSO’s retrenchment figures are overstated; even if we included statistics of employers retrenching five or less workers that are currently not reported to the Government.

FMM believes that SOCSO’s retrenchment figures of 137,000 to 300,000 persons are based on the Government’s “expanded” EIS model, which goes beyond the original objective to cover default in payment of retrenchment benefits.

The “expanded” EIS model is expected to provide benefits to those in-between jobs, on extended maternity leave, voluntarily unemployed etc.

FMM said this approach is not acceptable to the manufacturing sector.

Products and services cannot be offered today at a higher price with a promise of enhanced quality or service in the future, it said.

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