Recently, it was reported that the retrenched workers of Nikko Electronics Bhd protested outside Penang state assembly seeking the state government’s assistance to get their benefits and compensations. These were amongst the 1,000 odd workers that were retrenched suddenly without notice by their employers in July 2008.

Apparently, their plea to the minister, the federal and atate government have not been successful to date. If there was a National Retrenchment Scheme in place, as proposed by the MTUC in 1998, they could have resorted to this scheme to get some compensation. Malaysian laws need to be amended to ensure justice for all workers, especially for those who lose their jobs and their source of income.

There must be a new law that provides for compensation to workers that are terminated, retrenched or laid off by employers as the current Employment (Termination And Lay-Off Benefits) Regulations 1980 is no longer just or sufficient given the fact of changes in the employment patterns in Malaysia.

Today, a lot of employers hire workers, be it local workers or migrant workers, on a short, fixed- term basis which may range from one to two years. Thereafter, a new contract may be entered into for some.

There is also the practice of contracting out some of the jobs to private contractors, and in these cases, the workers become employees of the contractor and not the owner of the place that they work on.

These changing employment practices have serious implications for workers, for they not only lose their job security but also their rights as workers, including the right to join existing unions.

The current Employment (Termination And Lay-Off Benefits) Regulations 1980 is for the long-term worker. A short-term fixed contract employee who has worked for less than a year is not entitled to any benefit under the regulations.

Regulation 3(2), however, provides that, ‘For the purpose of this regulation a continuous contract of service for a period of not less than twelve months shall include two or more periods of employment which are not less than twelve months in the aggregate if the intervening period or periods between one period of employment and another does not in the aggregate exceed thirty days…’,

Still, unscrupulous employers have been known evade this by entering into new short-term contracts after the lapse of 30 days, or even causing the workers to come under some new contractors with some other labour provider.

To aggravate matters, retrenched unionised workers, when they most need the assistance of their unions, become no longer members of the union by a bad law that being section 26(1A) of the Trade Unions Act 1959, which states, ‘No person shall join, or be a member of, or be accepted or retained as a member by, any trade union if he is not employed or engaged in any establishment, trade, occupation or industry in respect of which the trade union is registered…’.

This provision must be repealed and despite being retrenched, laid-off or terminated, a worker’s membership of the union should continue for so long as necessary to secure the rights of these members.

MTUC, after the 1998 economic crisis, being fully aware of the fact that many a worker was not paid his or her requisite compensation and benefits by reason of the fact that the employers did not have any more money, proposed to the Malaysian government to set up a National Retrenchment Scheme.

When these companies renege on their legal and contractual obligations to their workers by defaulting on statutory contributions to the Employees Provident Fund (EPF) and to the Social Security Organisation (Socso) as well as payment of retrenchment benefits pursuant to the Employment (Termination and Lay–Off Benefits) Regulations, 1980, then this National Retrenchment Fund could come in to immediately assist these workers.

Although in March this year the Malaysian government ruled out the setting up of a retrenchment fund, MTUC urges the government to reconsider its decision and immediately set up this very much-needed National Retrenchment Fund which will surely benefit workers like those from Nikko Electronics Bhd.

The writer is president, Malaysian Trade Unions Congress.