MEF Urges Government to Bring Down Costs for Employers to Reduce Layoffs

November 30, 201610:42 am461 views

The Malaysian Employers Federation (MEF) is urging the government to bring down certain costs for employers to reduce the need for layoffs amidst an economic slowdown. These include temporarily allowing employees to reduce contribution to the Employees Provident Fund by 1 or 2 percent from the current 13 percent and reduce the Human Resource Development contribution from 1 percent to 0.5 percent.

MEF president Tan Sri Azman Shah Haron appealed to the Government to postpone the implementation of policies that could incur more costs to employers. Launching the sixth MEF Salary Survey 2016, Haron said the survey covering 280 companies revealed that 30% had retrenched, temporarily laid off or offered voluntary and mass separation schemes.

A majority of layoffs have been witnessed in the recent times in oil and gas, manufacturing and financial services. MEF said 31,460 employees were retrenched as at September this year compared with 44,000 last year, adding that more workers were expected to be laid off by end of the year and next year, The Star Malaysia reports.

Also to exercise some form of damage control for the local manufacturing industry to withstand global volatility, Malaysian Employers Federation (MEF) executive director Datuk Shamsuddin Bardan said earlier this month, that the manufacturing sector is expected to remain soft till the end of 2016 and felt a cushioning policy was much needed.

He stressed on the need for policymakers to maintain policies that are friendly towards business owners and employers. During the last year, the manufacturing industry has been impacted by the rising cost of doing business, weakening ringgit, implementation of GST and mandatory increase in the minimum wage. The industry has retrenched some 9,000 employees last year, which contributed to 24 percent of the total layoffs.

Another suggestion by Shamsuddin that may find favour with companies in Malaysia was to emulate the policy in Singapore, where employers are given incentives if they hire unemployed graduates and do not carry out any layoffs throughout the year. “Such incentives are critical and will prepare employers for the economy to recover, as they are in a good position to reap benefits instead of undergoing the employment process again,” Free Malaysia Today reports.

Shamsuddin also revealed that 31,476 Malaysians were retrenched from January to September this year and he expects more layoffs by the end of the year end. He added that the number of layoffs for last year came to 44,000.

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