Govt’s move to review EIS welcomed

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) welcomes the government’s move to review the Employment Insurance System (EIS) as it believes the current model was neither balanced nor equitable.

The scope for the scheme is too wide and should only cover workers retrenched because of business failure and not due to downsizing which should be handled by employers who should provide termination benefits.

“Allowing workers to enjoy both employment termination and lay-off benefits under the Employment Act, including those who are in voluntary separation schemes and mutual separation schemes, would result in these workers benefiting twice.

“This is against the principle of social security as clearly stated in the Social Security Act,” it said in statement, adding that the unnecessary strain on the fund by including training, should be excluded and could be carried out by the Human Resources Development Fund, financed by forfeited levy and late payments’ interest.

FMM also said that employers and employees contributing to the EIS were also very concerned over the management of the fund.

“Poor management and unwarranted expenditure will lead to unjustified increases in the contribution rate.

“We maintain that the fund is a tripartite responsibility which the government will contribute towards the operating expenditure of managing the fund,” it said.