MTUC: Workers face higher risk of retrenchment as MCO extended yet again

KUALA LUMPUR, April 11 — Despite several essential businesses being allowed to operate during the third phase of the movement control order (MCO), the Malaysian Trades Union Congress (MTUC) has warned of likely abuses of the government’s stimulus package by employers that could see workers losing out yet again.

MTUC Secretary-General J.Solomon today claimed that despite the government’s stimulus package aimed at small and medium sized enterprises (SMEs), several employers were still cutting corners and retrenching staff attempting to keep their businesses afloat.

MTUC claimed that it has been notified by workers who were either forced to take a pay cut or retrenched despite their companies being on the receiving end of government benefits.

“These are early days of the economic gloom and with another two-week extension of the MCO kicking in, we expect there will be many more such cases.

“Sadly, many of these unethical employers will or already are the recipients of the billions of ringgit in government aid but have no qualms to short change workers in the cruelest way.

“The bitter truth is that millions of workers face the real possibility of either retrenchment or massive pay cuts if unscrupulous employers, despite receiving massive government aid and raking huge profits in the past, are given a free hand with regard to the fate of their workers.

“Apart from generous government assistance, these employers, by and large, have enough tucked away for the proverbial rainy day,” Solomon claimed.

Prime Minister Tan Sri Muhyiddin Yassin yesterday announced a 14-day extension to the MCO, which will carry on until April 28, to prevent the healthcare system from being overburdened by a high influx of cases while containing the outbreak.

Muhyiddin announced that the third phase of the MCO will see several essential businesses, such as barbers, staffed laundry services, hardware and repair shops, and social health services resume operations while adhering to strict guidelines.

Solomon’s statement today also highlighted the need for an emergency set of regulations be gazetted to block employers from retrenching their staff or cutting their salaries, especially during the MCO period, a proposal it claimed had been met with fierce objections from employers.

“While we respect their views on what is best for workers in dealing with the Covid-19 economic impact in Malaysia, we strongly believe such opinions are rooted in the interests of employers and mask the reality of workers struggling to keep their jobs and sustain their families with meager wages in this most difficult time,” Solomon said.

He explained that among the justifications given by employers was how their businesses would go belly up if pay cuts and staff layoffs were not allowed, adding how some analysts had even suggested that outlawing retrenchment would harm both employers and workers.

Solomon explained that the move to safeguard the workers would be a temporary measure, if implemented, while the government drafts a holistic exit plan for the country as it navigates its way through the Covid-19 pandemic.

He pointed out the possible chain reaction of a weaker economy if workers, especially those within the B40 and M40 bracket, were retrenched, as numbers have shown they are the category most likely to consume and spend.

“This means these employers get back what they give the workers. And the government enjoys the taxes.

“Retrenchment of workers in significant numbers will decrease their spending power, which will curtail aggregate demand, and impact negatively on the economy.

“In other words, the workers play a key role here,” he said.

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