Last week, when the 12 affiliates of the Malaysian Trades Union Congress (MTUC) held a press conference to question the Employees Provident Fund (EPF) regarding a statutory amendment which slashed some benefits for contributors, the five journalists who came smiled knowingly upon seeing each other.

It was as though the same reflexive thought went through their minds as they listened to the union leaders striving to explain why they are making the issue public without consulting their "boss", the MTUC - "something fishy was going on here".

The union leaders claimed that the amendment to Section 58(1) and (2) of the 1991 EPF Act allowing beneficiaries to claim only a flat rate of RM2,000 instead of a maximum of RM30,000 for (additional) death, physical and mental disability were whimsically proposed by EPF, approved by the Finance Ministry and passed in Parliament last July without anyone's knowledge, not even the five MTUC representatives on the EPF board.

The changes were not publicised, the unions objected. These changes have grave implications on worker's savings, so how could EPF betray its social obligation to society when blood and sweat money of nine million contributors are lying in its hands?

"But have you discussed this matter with your MTUC officials?" one journalist had asked, and got a no as an answer.

"It is rather odd that your reps do not know this (amendment) when you have five of them sitting on the board," she said.

"Oh, but we are confident that if they knew about it, they would certainly have objected," said union leader Kamarus Zaman Mansor, spokesperson for the 12 affiliates.

He added, "By the way, we do not have to go to MTUC to make our grouses known, we can do it ourselves. We want to take EPF to task, not MTUC."

"But EPF will tell us otherwise," the journalist had countered. "When we question EPF if this amendment was made without anyone's knowledge, they will insist that the matter had been unanimously agreed to by your reps in the board meetings."

"Then we will know what to do," said Kamarus, with a smug grin.

Yet another initially clueless person, it would appear, was Finance Ministry's Parliamentary Secretary Hashim Ismail. Last Monday, when asked about the amendments to the EPF Act, he said, "I thought the matter is still under discussion. Has it (the amendment) been passed?"

But after being filled in on the background by malaysiakini , Hashim recovered enough to say, "So the union leaders are grumbling? Well, tell them that if they are not satisfied, they can make their grouses known to the ministry, perhaps ask for a review and we will consider. Anyhow, I think the amendment is fair to the contributors."

None of MTUC top officials were available for comment. Senator and MTUC president Zainal Rampak was overseas while his secretary-general G Rajasekaran was in South Korea and won't be back till next week.

EPF's clarification

Meanwhile, EPF's public relations manager Effendi Nik Jaafar lambasted the union affiliates for their ignorance and not understanding the rationale for the amendment.

"It is EPF's practice to discuss all policy matters, amendments and changes on the EPF board and the approval of the Finance Ministry will be sought before they (policies) are implemented," said Nik.

"Proposed amendments which have been approved will then be discussed in the cabinet before they are debated and passed in Parliament," he added.

Nik said that a proposal will only be adopted if it had been unanimously agreed upon by members on the board first, including MTUC representatives, otherwise the proposal will never see the light of day.

Therefore it is impossible that MTUC representatives were not aware of the amendment, Nik said. He also rapped the unions for falsely accusing EPF of not raising the proposed amendment on the board before having it approved by the Finance Ministry.

He added that if MTUC representatives were not happy with the amendment, they should have made their grouses known then, not now.

Precisely.

"So EPF is passing back the buck to us?" queried union leader Syed Shahir Syed Mohamud when he learnt of EPF's comeback.

"We would have to take the matter up with MTUC then," he reiterated.

Cracks in MTUC

This whole malady raises many questions.

This is not the first time that union leaders have had disputes with MTUC representatives over EPF matters. The last showdown was the optional EPF annuity scheme fiasco, where hundreds and thousand of workers were misled into parting with their savings to selected insurance companies, only to be told later - thanks to a study by the Consumers Association of Penang - that the scheme was unprofitable.

Although bickering can sometimes lead to positive resolutions, for MTUC, it didn't.

The expose of the many shortcomings of the controversial annuity scheme also exposed the cracks within MTUC's leadership. A split which eventually culminated with the president suing one of his union leaders for RM250 million when the latter asked the former to "shut up or resign".

One can hardly blame the union leader, S Somahsundram, for making his demand public. The president, Zainal (photo, left), after all, also sat on the EPF board. Yet, he appeared to have failed to advise his members about the advantages and disadvantages of investing in the annuity scheme until his secretary-general Rajasegaran (photo, right) called for a nation-wide boycott.

Coincidentally, Somahsundram, who is deemed by some as having done a heroic deed, was present among the 12 affiliates that day. The initiative of the unions to go public while MTUC officials were not available hints of an opportunistic ploy by those leaders to take centrestage in revealing yet another example of incompetent leadership in the MTUC.

This time the damage seemed more serious. An amendment had been made to an Act which can "rob" some contributors of RM28,000 each[#1] (EPF and your money[/#], Oct 16). And unions are now in a fix as to how to convince their members that they were not responsible for this substantial loss of monetary benefit. A loss workers have to bear with just because their representatives refused to exercise their voting power on the EPF Board.

Unions members are in the dark, as usual, but the scene is darker still for members who are directly affected by this snag. The slip would have gone unnoticed if beneficiaries had not made claims at the EPF department only to be told that they were no longer entitled to the amount stipulated in the previous Act. They sought clarification with their unions, who tried to purchase the Act (in book form) for reference but were informed by book shops that the new Act isn't out yet in print.

Is it fair?

Union leaders cannot comprehend the rationale behind the amendment. Why take away existing benefits? they asked. Shouldn't EPF be looking into areas to enhance benefits instead of removing the ones already there?

EPF explained that "the earlier additional benefit was derived from EPF's income. This meant that those who were not dead, physically or mentally incapacitated were also burdened by having to contribute to this amount. The ratio of this amount has been increasing drastically from year to year. The implication is that with this increasing amount, dividends which are supposed to be paid to contributors at the end of each financial year have to be slashed to pay for the additional benefit".

"For example, in 1999, RM136.84 million or 1.2 percent of EPF's gross income had to be paid to such beneficiaries.

"EPF records also indicate that the maximum RM30,000 additional benefit was enjoyed only by a few, especially those who earned large salaries. This group do not actually need the money. On the other hand, the majority of contributors who earned low salaries did not enjoy the maximum benefit of RM30,000.

"Furthermore, the same benefit is already provided for by the Social Security Organisation (Socso), a workers' compensation fund to which EPF members also contribute."

It is simplistic to assume that beneficiaries of those who earn large incomes do not need the "additional" benefit. Not all beneficiaries are as wealthy as their benefactors. It is naive to assume that beneficiaries who earn low salaries need the "additional" benefit more.

Whatever the rationale, the five MTUC representatives on the EPF board must have thought the amendment was necessary and profitable for the contributors. However, their failure to raise the matter with their members smacks of a complete disrespect for the members they represent. Their lack of communication on such an important change that affects them financially is an act of gross negligence or omission of care and duty to the MTUC membership at large.

If union leaders feel that this is indeed another fiasco, they must undoubtedly take those five representatives to task, not only EPF. They should indeed demand a detailed explanation for their representatives' lack of competency and responsibility in discharging their duties as leaders of the workers' movement.