We knew the MCO was not going to be an easy one. But it seems that things are only going to get harder before we see the light at the end of the tunnel.
Following the economic slump due to the COVID-19 pandemic and the enforcement of MCO and subsequently CMCO, it has been reported that more job losses and retrenchments are to come.
According to Shamsuddin Bardan, Executive Director of Malaysian Employers Federation (MEF), Malaysians should brace themselves for retrenchments post-Raya.
Termination of employees usually happen after festive season
He said that termination of employment usually takes place after the festive season because employers will save their workers for the festive period.
He further explained that the MEF has budgeted more than 2 million workers will lose their jobs, this includes fresh graduates and 610,000 workers who had lost their jobs before March 2020.
Retrenchments are the solution for employers who are taking up loans and using their personal savings to pay their workers’ salaries.
Suggestions for the economy
Shamsuddin recommended that certain steps could be taken by the employer to come to the forefront of the economic situation. Among them is to reduce the Employees Provident Fund (EPF) incentive paid by employers to workers from 11% to 5%.
He also recommended a ceiling rate for salary deductions and flexible workings hours as a compromise or settlement with workers unions as this step is in line with the “new normal”.
He went on to say that the government had made a good decision to reduce foreign workers in wet markets throughout the city centre. This is because wet markets will be cleaner and safer without foreign workers.
Although local workers’ salaries are higher, employers will reduce their costs as they do not have to pay the cost of permits and employment documents for foreigners.
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