KUCHING: The proposed Employment Insurance Scheme (EIS) should not be meant for paying additional benefits that are already covered by the existing laws.
In stating this, Sarawak Business Federation (SBF) deputy president Datuk Dr Philip Ting said employers in Sarawak “are not against the EIS system” but the proposed collection “just does not make sense”.
According to him, benefits of employees are well covered by existing laws including the Employment Act 1955 (Employment Termination Lay-off Benefits – ETLB) and retrenchment benefits in collective agreements.
“In the case of Sarawak, it is covered by the Sarawak Labour Ordinance, which is very similar to the ETLB. And if our Labour Ordinance is not enough to cover the benefits of employees, make amendments to the ordinance instead of introducing a new system,” he said at a news conference at the Sarawak Chamber of Commerce and Industry (SCCI) secretariat here yesterday.
Ting said approximately 10 per cent of the proposed annual collection of RM1.63 billion for the EIS fund would come from Sarawak.
“Let’s say about RM150 million would come from Sarawak. And this will be RM75 from employers and RM75 from employees based on the proposal.
“Which also means that RM150 million will be taken away from the general market of Sarawak. Just imagine the impact, let alone the fact that the proposed scheme is to cover only a maximum of three months’ salary,” he added.
Nevertheless, he said SBF supported the proposed EIS because it also wanted to protect employees “who are grossly disadvantaged by errant employers,” adding he would want the government to make amendments to the existing laws to take action against such employers.
“Tweak the laws to make all stakeholders responsible. We in Sarawak don’t need something else on top of Labour Ordinance which covers it extremely well.”
Stressing that the government should not come up with a new system that would affect good employers and employees, he asked: “Why bring a hammer to kill an ant when an ant trap is already available?”
Concurring with him was SBF secretary-general Jonathan Chai, who pointed out that the proposed collection “is not justifiable” and the proposed EIS “is self-defeating” because the scheme was supposed to be put in place to protect employees but employees would be made to pay for life.
“The amount to be engaged in maintaining the scheme, which is projected to be RM138 million is not justifiable either. Why spend so much money on maintaining it and yet in the end the benefits do not go to employees?”
Chai added that the proposed EIS collection is unacceptable but appreciated the decision of the government to defer the debate on the EIS Bill pending further consultations with stakeholders.
He also hoped that the federal government would consult the state government before going ahead with debating the EIS Bill in Parliament.
“The state government should be consulted because it’s a labour issue and something to do with our autonomy.”
For SBF president Datuk Abang Abdul Karim Abang Openg, the proposal to appoint third party agents to collect contributions from employers is not necessary.
He said this would only increase the administration cost.
“I believe that the government has enough good people and machinery to do the collection instead of appointing agents, of which the administration cost will be a huge sum.”
Abdul Karim also felt that the EIS should have a stand-alone board and not be subject to the Social Security Organisation (Socso) Act and the Socso Board.
“The government should have a meaningful consultation with the state before tabling the Bill. A lot of things they do without consulting us, like the Tourism Tax. Although the economy is improving a lot, we are still facing challenges. It (the proposed EIS) will really be a burden to the business community in Sarawak,” he said.