An established palm oil mill, Palmco Oil Mills Sdn Bhd, has laid off 33 maintenance and production staff, some of whom have been with the company for about 20 years.

The move has come as a shock to the employees, mainly men in their 40s, who were informed of the company's decision in a letter dated March 12. Their last day of work was March 31.

The management maintained that it has justifiable reasons to retrench the workers, due to losses in o­ne of its business sectors.

'Absorb workers'

A source said the management claimed that the company's palm kernel crushing operations had been suffering "recurring losses" in recent years.

"But since the company has various subsidiaries, why isn't it possible for the affected workers to be absorbed into o­ne of these instead?" the source asked.

"These workers have been loyal for 20-odd years. All of them have families, and they will find it difficult to get new jobs now."

The source also questioned the timing of the retrenchment exercise. The workers, who are members of the Food Industries Employees Union, are currently renegotiating their collective agreement (CA) to enhance benefits like medical insurance and an increase in allowances.

Palmco Oil Mills, established in 1970 as o­ne of the country's first palm oil mills, is a subsidiary of Palmco Holdings Berhad. This company is part of the IOI conglomerate, which also is in the property and hotel business.

With a paid up capital of RM202 million as at Dec 31, 2002, the group's interests are spread out throughout Malaysia and Asia. Palmco's shares have been listed o­n the Kuala Lumpur Stock Exchange since 1981 and the company has o­ne of the largest oleochemical plants in Malaysia.

Transfer opportunities

In the March 12 letter, chief executive officer Dr Barry Tan said the management was trying its best to minimise the number of employees to be retrenched by looking at transfer opportunities to other areas of the group's operations, in particular the oleochemical division.

Tan said that, since the list of employees (for transfer) has yet to be finalised, employees of the maintenance and production departments were likely to be retrenched.

"The company will pay retrenchment benefits according to Article 29 of the Collective Agreement. Should the retrenched employees apply for future vacancies within the group, they would be favourably considered subject to their meeting the requirements of those vacancies," he said in the letter.

"The impending closure of the kernel crushing operation is regrettable but unavoidable (in) the long term interests of the group."

Acidchem Sdn Bhd financial controller Chan Chong Yau, who is handling the matter, said the company has tried to absorb the retrenched workers into subsidiary firms.

(Acidchem, established in the 1980s, is also a subsidiary of Palmco Holdings, and is located in the Prai Industrial Site.)

"We are o­nly retrenching 33 employees out of 80. The rest have been absorbed into other subsidiaries," Chan told malaysiakini .

He denied that the retrenchment exercise was related to renewal of the CA, and said those who have been transferred to other sections or companies were those "who best fit the job".

He also claimed that the department involved had suffered "substantial financial losses over the years".

"We have had several meetings with the workers. If they have problems, we advise them to see us directly," he added.