WHAT is good for the employees must be good, too, for the employers. Apparently not, judging from employers' reaction to the recent amendments to the Employment Act (EA) 1955. Employees want the Employment (Amendment) Act 2022 (EAA) to come into effect in January, but employers would like the government to rethink its implementation date. Employers vs employees? We thought they were on the same side. The word used by the Malaysian Employers Federation (MEF) is "reschedule".
To when? When the employers are ready, able and, perhaps, willing. Certainly not in the near future.
Why the tug of war? Two reasons appear to be bothering the employers: money and timing. Start with money. There are quite a few provisions in the EAA that may "eat" into employers' profits. Under the EA, employees earning above RM2,000 could not have recourse to the act. The EAA casts the net wider, bringing in all employees under the act, no matter the quantum of their salaries (though there are some conditions covering employees earning above RM4,000).
Extension of overtime payment to employees earning up to RM4,000 is one distress for employers. But why make them work overtime, especially when employers are not willing to remunerate them?
Increased maternity leave from the current 60 days to 98 days and the introduction of a seven-day paternity leave are cause for consternation as well.
The EAA brings good news for pregnant mothers, too. From Jan 1 — if the employers don't have their way — it becomes an offence to terminate them except for closure of business, misconduct or breach.
But these aren't novel ideas. Many countries have had them in their statute books long ago. A question that needs asking is: why did Malaysia take this long? Note the age of the EA. 1955. The obvious answer is that the employers' lobby is a powerful one. Consider one MEF argument for asking the government to go slow on the EAA. Since May, it says, employers have had to bear an additional RM14 billion when the minimum salary was increased from RM1,100 through RM1,200 to RM1,500. But this is only half the story. Many businesses pass the increase in costs to the consumers in numerous ingenious ways. Besides, a higher salary means better welfare of workers. And better welfare of workers means higher productivity. Call it the cycle of virtue.
The timing of EAA's implementation, Malaysian employers' second reason, is also causing some trepidation. One argument is that Covid-19 has sapped considerable cash from businesses. True, many had to close because of lockdowns and pandemic-related costs. But the government did help with stimulus packages amounting to billions of ringgit, including wage subsidies. The pandemic is now endemic, but Covid-19 isn't going away. Not for a long time.
There is yet another way the Jan 1 implementation of the EAA is causing dismay among employers. The impending global recession next year. Sure, the signs are there. But the EAA can't just wait for the recession to come and go. We live in a world of depression, recession and financial crisis.
There will never be an ideal time.