The federal government has been urged to set up a temporary emergency fund to provide a safety net for workers who may be retrenched beginning next year when a global economic recession may set in.
Dr Michael Jeyakumar Devaraj of Parti Socialis Malaysia, the MP for Sungei Siput, accused the government of betraying the country’s industrial workers by shelving a scheme to provide insurance coverage for unemployment that has been 15 years in the planning.
The party was “appalled to learn through a news item in the Star on Tuesday that the prime minister had directed that the Unemployment Insurance Scheme be shelved”, Dr Jeyakumar said in a statement today.
What Chua Soi Lek said
What Chua Soi Lek said the government said
He said there was an urgent need to provide protection for workers who are retrenched, in view of a possible recession caused by debt problems in western and industrial countries. »
“There is a likelihood that as early as the beginning of 2013, certain firms in Malaysia might lay off workers,” he said. Any recession next year might be “deeper and more prolonged than usual”.
Dr Jeyakumar said the government had been dragging its heels for 15 years on providing a safety net for workers.
He said several parties including Parti Socialis Malaysia, the JERIT activists and the trades union federation have been pushing for a Retrenchment Fund ever since the recession of 1997-98.
“The government has said that they are seriously studying the issue, and more than a year ago, the government claimed it had referred the matter to the ILO for advice. Now after dragging its feet on this matter for 15 years, the BN government has decided to shelve the idea!”
Dr Jeyakumar said the socialist party felt there was an urgent need for a Retrenchment Fund as the global economy now faced serious problems.
Greece and Spain have run into severe debt problems, and most developed countries including Italy, Britain and Japan have huge government debts, he said.
Europe was sliding into recession, which would then depress Asian economies as well, he said. A early as the beginning of 2013, certain firms in Malaysia might lay off workers.
“We know from previous experience, about 25% workers retrenched during a recession will not receive even the minimum compensation (20 days wages for each year of service), because their employers claim bankruptcy,” he said.
“There is no protection at all for workers when companies close because of cash flow problems.”
The party urged the government to set up an emergency retrenchment fund to cover workers who are laid off by companies claiming bankruptcy. This should be set up with funds from the Federal Government as devising a fund based on contribution from employers has been taking far too long.
To cover the possibility of recession in the near future, the government should set up this emergency recession fund as a temporary measure, as soon as possible, the statement said.
“After dragging its feet for 15 years and failing to come up with a proper sustainable fund, the least that the government can do is to set up a temporary retrenchment fund to provide some protection for Malaysian workers in case we are hit by a recession next year,” Dr Jeyakumar said.
uppercaise 
Instead of taking contingency measures to tackle the looming recession, Najib and his merry men are doing the opposite by raising salaries of civil servants, apart from handing out largesse to Felda and Mas employees.. They are looting the treasury for the sake of gaining more votes. This is a feckless and reckless move which will put the nation at risk of ending up like Greece.