KUALA LUMPUR – The Malaysian Employers’ Federation (MEF) has called for the implementation of the Employment Act 1955 (Amendment) 2022 to be postponed in the near future as employers should be given sufficient time to adapt to the provisions of the law.
According to MEF president Datuk Syed Hussain Syed Husman, the postponement also allows employers to be more prepared to implement changes contained in the law, thereby creating a “win-win” situation between them and the workers.
He said, implementation and sudden changes will result in employers incurring higher operating costs, especially when the expected economic recession occurs in 2023.
“MEF supports some changes (Employment Act 1955), but it is about timing issues. Now is not the time to implement changes that will increase business costs.
“In a bleak economic environment where most employers are still in the recovery process after businesses were severely affected by the Covid-19 pandemic, there is a need to give them space to ’breathe’ again,” he told The Vibes’ sister portal Getaran, when contacted recently.
He said, the economic situation next year is expected to be very challenging all over the world with Malaysia being no exception.
“Many business and industry associations, including MEF, are of the view that the government led by Datuk Seri Anwar Ibrahim should reconsider the implementation of the amendment to the Employment Act 1955 next January.
“Employers should be given more time to stabilise and restore businesses that have been severely affected by the MCO (Movement Control Order) in 2020 and 2021, to curb the threat of Covid-19 and the effects of major floods,” he said.
Syed Hussain said that the implementation of the act on January 1 next will be a big burden for employers, especially regarding the eligibility of employees to get “overtime” from those who are paid RM2,000 to RM4,000.
He stressed, on May 1, employers across the country already bear an additional cost of RM14 billion a year when the minimum wage rate is increased from RM1,200 per month to RM1,500 per month.
Some employers, he said, are still struggling to fully implement minimum wage requirements while some of them fail to comply because they are unable to.
“In general, employers try to implement the matter, but there are situations where some of them have to go out of business because they are unable to do so,” he said.
According to him, the implementation of the act is estimated to involve an additional cost of RM111 billion per year for employers in the private sector and it is very burdensome for them to absorb these costs.
“Therefore, MEF is appealing for the Datuk Seri Anwar Ibrahim-led government to re-examine several amendments, especially in relation to extending the act to every employee, regardless of their position.
“Amendments to expand the coverage of this employee act which also involves management staff will cause a conflict of interest,” he said.
Earlier, Human Resources Minister, V. Sivakumar announced the provisions of the Employment Act 1955 (Amendment) 2022 which were previously postponed, will be implemented from January 1.
He had explained that, despite requests from the industry to extend the deferment period, there is a need to enforce the act.
The amendments include the addition of maternity leave from 60 days to 98 days and paternity leave being increased from three days to seven days.
The act also includes a reduction in working hours from 48 hours to 45 hours per week, in addition to the prohibition of discrimination in employment.
Meanwhile, Malaysian Trade Union Congress (MTUC) president Effendy Abdul Ghani, welcomed the government’s announcement of the amendments and urged for its implementation not to be delayed.
The delay, he said, should not be allowed because the employer has been given enough time to prepare for the changes in the act.
The amendment, he said, was supposed to come into effect last September, but was postponed to January 1, thus giving employers ample time to prepare for the changes contained in the act.
“If they (employers) ask to postpone again, it is not fair to the workers, even if the matter is agreed by the employers before it is approved in Parliament,” he said.
Effendy said, the act not only benefits employees but also employers, as well as promote the growth of the country’s economy.
“If the reason for their delay is due to the prediction of economic recession in 2023, it is an assumption since the matter has not happened yet.
“But, the fact is, after two years of Covid-19 hitting the country, the recorded unemployment rate is decreasing, while many companies are able to survive until today and record profits despite a slow economic environment,” he added. – The Vibes, December 25, 2022
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