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KUALA LUMPUR: The Employment Insurance System (EIS) is aimed at helping workers who have lost their jobs to get financial aid and find new employment.
The system would not be applicable to those who stopped work voluntarily, said Malaysian Employers Federation (MEF) executive director Shamsuddin Bardan.
“EIS will only pay assistance to workers who are laid off involuntarily for six months with an average payment of half-month salary,” he told Bernama here.
He was commenting on the announcement of Prime Minister Najib Razak on March 23 that the government had agreed to implement EIS, involving 6.5 million local workers in the private sector.
The prime minister had said that a new legislation was being drafted and would be tabled in Parliament in June and EIS was expected to be implemented on Jan 1 next year while payment of benefits would be made by Jan 1, 2019.
Shamsuddin said MEF had proposed that a third account be created in a worker’s Employees Provident Fund (EPF) as a saving scheme for workers who were retrenched.
“For example, employer and worker each contributes one per cent of the pay each month for eight years whereby the amount in the account would touch a month’s pay.
“If the workers’ services are terminated involuntarily, they can take out the savings in question. If they do not get terminated, the savings can be used for their retirement,” he explained.
He added that the government must set aside a special fund for this purpose, making the benefit obtained equivalent to three-month pay as suggested under EIS.
Meanwhile, Malaysian Trades Union Congress (MTUC) president Abdul Halim Mansor said the implementation of EIS would reduce employers’ burden when a retrenchment crisis took place.
“A company may face cash constraints when retrenchment or closure of the operation takes place, so an alternative legal provision is necessary to meet the demands of the workers,” he said.
Through EIS, he said, workers who had lost their jobs would also be sent for retraining or skills upgrading courses to increase their employability.
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