KUCHING: The reduction of employers’ contributions to the Employees Provident Fund (EPF) is seen by some people as unfair for employees.
On May 2, executive director of the Malaysian Employers Federation (MEF) Datuk Shamsuddin Bardan proposed to reduce employers’ contributions to the Employees Provident Fund (EPF) from the current 12 to 13 per cent down to five per cent for the sake of business survival amid the Covid-19 outbreak.
Shamsuddin also pointed out that MEF was especially concerned about the survival of small-medium enterprises (SMEs) which made up 98.8 per cent of employers in the country. Two-thirds of these SMEs consist of micro-businesses employed fewer than five employees.
Universiti Malaysia Sarawak (Unimas) Leadership Centre chairman, Prof Datuk Mohd Fadzil Abd Rahman, said that while trying to understand the dilemma and constraints faced by employers, the welfare of their employees should not be taken lightly.
“To most employees, EPF contributions are perhaps the only savings for their future. In other words, the proposed reduction — if implemented — would have serious impact on them.
“Whereas for employers, the reduction is seen as a mechanism to save their businesses,” he told New Sarawak Tribune yesterday.
Not only that, Prof Fadzil also questioned to what extent the reduction would help to stimulate businesses like what have been argued earlier by some people.
“How can workers be assured that they won’t lose their jobs after the reduction is implemented? This is among the questions that need to be addressed transparently, and all actions need to be clarified and justified while the fate the workers remain uncertain,” he said.
He also said that to be fair to employers the proposed reduction could be considered with some conditions, such as implementing it only as a temporary measure during this crisis while the employers’ contributions should revert to the actual percentages once the situation has returned to normal.
Besides that, Prof Fadzil also stated that employers should also consider increasing their contributions when their companies’ performances improved to compensate the sacrifices made by their employees during this difficult time.
“Employers should not retrench their employees, and if downsizing is a strategy of the company to save itself then the proposed reduction should not be negotiated or tolerated at all,” he said.
Considering that the employers’ association should also look into other methods and approaches to overcome the current challenges, Prof Fadzil said that the proposed reduction might be seen as a quick win for the company, but it should not be forgotten that the well-being of workers was of paramount importance.
“In short, it is not good for employers to reduce their EPF contributions as it would spark deep dissatisfaction among their employees, which in turn could destabilise their companies.
