The Federation of Malaysian Manufacturers (FMM) today expressed disappointment that the Minimum Retirement Age Bill tabled in Parliament on Wednesday had not addressed employers’ concerns despite having submitted them to the Human Resources Ministry in April.

In a statement today, it said employers were severely pressured on wage costs with the concurrent implementation of the minimum wage and minimum retirement age as the former will increase wage costs and the latter will increase wage costs by delaying retirement.

To top it off, employers are not able to initiate the necessary adjustments since details of the composition of minimum wage have yet to be made known, it said.

On Wednesday, the ministry had announced that it would gazette the Minimum Wages Order by July 1, 2012 with implementation effective Jan 1, 2013.

FMM said the Minimum Retirement Age Bill sent “another shockwave to employers, who are still grappling in the dark on the implementation of the minimum wage”.

It said the Bill also contradicted the Second Schedule of the Industrial Relations Act 1967 by including future wages in the compensation.

“The Second Schedule clearly stipulates that any relief given should not include any compensation for loss of future earnings.

“If there is unlawful retirement and reinstatement is not appropriate, an employer could be ordered to pay termination benefits under the Termination and Lay Off Regulations 1980, in conformity with the Industrial Relations Act,” it said.

“The Bill practices double standards as employers have to raise their retirement age to the minimum level and yet there is no automatic raising of the optional retirement age by the same quantum,” FMM said.

FMM recommended an adequate transition period be given to implement the minimum retirement age, for example, 24 months from date of gazetting, and upon application to the minister, another 12 months’ extension.

“The transition period is to facilitate a holistic review of employment laws to provide greater flexibility in hiring and firing.

“The minimum wage should be implemented by zones, for instance starting in the Klang Valley and at much later dates spanning a year or more in other states to address differences in the current values of average wages in the different zones,” FMM said.

It also recommended that fixed allowances defined as wages under Section 2 of the Employment Act 1955 be incorporated as components and not absorbed as an aggregated lump sum into the minimum wage.

- Bernama