No plan for retrenchment fund

By Giam Say Khoon, The Sun

The government has ruled out setting up a retrenchment fund now although retrenchments and lay-offs are growing, said Human Resources Minister Datuk Dr S. Subramaniam. 

In winding up debate on the ministry in the Dewan Rakyat today, he said it was not the government's policy to provide unemployment benefits.

"We help those who have lost their jobs by helping them to increase their skills and employability as well as to secure other jobs. The retrenchment fund cannot be set up now to help workers as the country is already feeling the effects of the global economic slowdown," he said.

Subramaniam added, however, that the International Labour Organisation (ILO) was conducting a feasibility study on such a fund for the country and was expected to be completed by June. He said the government will decide again based on the ILO proposal.

Datuk Tajuddin Abdul Rahman (BN-Pasir Salak) insisted the fund was needed so that money could be disbursed directly to those who had lost their jobs to help them with their living expenses.

"Rather than giving money to third parties to conduct refresher or training courses for retrenched workers, it is better to give the money directly to the workers. The monthly disbursement can be given for up to two years and after they have found a job, they can pay back to the fund," he suggested.

Abdullah Sani Abd Hamid (PKR-Kuala Langat) felt that employers should contribute RM1 for every employee to the fund.

"From a legal standpoint, workers who lost their jobs should be compensated and yet, we still hear stories of workers not getting their pay."

Subramaniam replied that the government will not be rushed into setting up the fund as it does not want a short-term solution to the economic situation.

"When we talked to employers, many claimed that they are good employers and that they are very unlikely to retrench their workers and why they should be paying (to contribute to the retrenchment fund) for somebody who is being irresponsible to their employees?

"So we have to look at it at a very holistic manner and we do an actuarial study before we make a commitment because once we start a fund like the Social Security Fund, we have to continue forever and we cannot stop it half way through," he said.

On minimum wage, he said the government is committed to increasing wages and it is the way forward for the country so that jobs will be more attractive to locals.

Meanwhile, Subramaniam explained that the ministry cancelled a briefing for all MPs on retrenchment issue next week as the mini budget will be presented and new policies may be introduced.

Earlier, Chong Chieng Jen (DAP-Bandar Kuching) had asked why Opposition MPs' invitations to the briefing were withdrawn.