MEF: Employers worry over SIP implementation, say operating cost will go up


KUALA LUMPUR: Employers have expressed apprehension over the implementation of the Employment Insurance Scheme (SIP) next year, saying not many employees will benefit from it.

They also expressed concern with the scheme’s details, which had yet to be finalised.

Malaysian Employers Federation (MEF) director Datuk Shamsuddin Bardan said the SIP would increase the operating cost of most businesses, which he said were already experiencing difficulties.

Prime Minister Datuk Seri Najib Razak had announced today that the scheme would be enforced in 2018, with an allocation of RM70 million for interest payment for private sector employees.

“Although the retrenchment rate is at an average of 0.6 per cent, the scheme only covers forced and not voluntary retrenchment.

“The amount of collection (for the scheme) will far exceed the amount given to assist these retrenched workers. This means that a large majority of employees will not benefit from the scheme,” Shamsuddin told the New Straits Times.

He said the MEF had, in the past, proposed a savings scheme that allowed an employee to contribute money to a fund, which could then be used by the employee if he was retrenched.

“The government can consider something similar as this will benefit the workers. Another worrying part of the SIP is the cost of administrating the fund.

“The initial cost of setting up infrastructure is projected to cost RM320 million, just for the computer and data systems.”

Malaysian Trade Union Congress (MTUC) secretary-general J. Solomon said the relevant stakeholders were not properly consulted before the SIP was announced.

“For example, the implementation of the minimum wage was done during the current prime minister and we are happy that it has become a reality during his tenure. But in terms of implementation, there are still hiccups until today.”

He said MTUC had called for a meeting with the Human Resources Ministry to discuss and finalise the details of the SIP.

Solomon also expressed concern that employers would use the SIP as an excuse to lay off workers.

“SIP was not created to provide an excuse for employers to commit wrongdoings. They should not think that since there is SIP, they can sack employees when they are not happy with them.

“Employees should be looked after by the scheme. There must be safety nets for employees, so that the scheme will not be misused.”