One way to reduce the need for layoffs would be to cut back on hours, spreading the available work among more employees.
– Adam Cohen, singer and songwriter
The coronavirus outbreak has hit the country’s economy hard and triggered unprecedented mass layoffs nationwide.
Sarawak is no exception; many businesses have been affected by the various movement restriction orders (MCOs) and health standard operating procedures (SOPs), forcing proprietors to resort to various measures, including layoffs.
So, if you are an employer badly affected by the Covid-19 pandemic what would you do to keep your business going?
Let’s say you have three choices:
1. Retrench your workers, but stick to the labour laws, and provide adequate compensation.
2. Convince your workers to opt for a salary reduction with an undertaking that their remuneration will be restored once the company is back to its sound financial position.
3. Continue to retain the staff with the hope that things would turn out well, but knowing that the business may incur heavy losses, which could lead to insolvency, bankruptcy and eventually force the company to tutup kedai (wind up).
Choice No. 2 seems to be an ideal choice but is definitely out of question because under existing labour laws, it’s illegal to deduct an employee’s salary.
Which leaves you with choices No. 1 and 3. The latter is not practical, which means the retrenchment option is the only way out.
Bosses, however, are bound by regulations on retrenchment and are required to report to the Labour Department 30 days before they decide to lay off their workers.
Retrenchment is generally accepted as it is the employer’s prerogative to do so. Of course, there are other ways for a company to survive the coronavirus, like cutting down on overtime, bonuses, productivity incentives and holiday trips.
I was made to understand it’s also illegal to reduce one’s leave entitlement or force workers to go on leave.
Though I have been a worker for the better part of my life and my support is for my fellow colleagues, my heart, nevertheless, goes out to the employers and companies struggling to pull through these difficult times.
On Saturday, state Labour Department director Awang Raduan Awang Omar reminded bosses to strictly adhere to the Sarawak Labour Ordinance which, among other things, requires companies planning to retrench their workers to give notices and pay out compensations or termination benefits.
Awang Raduan’s reminder couldn’t have come at a better time. There have been reports on social media of workers “being exploited to the maximum” during the ongoing pandemic.
While some employers are said to have been grossly unreasonable in cutting the wages or salaries of their workers without giving proper notices, I know of bosses who are justified in cutting their workers’ pay or revoking part of their allowances because of their lack of input or indiscipline.
These workers should be thankful or grateful that they still get to keep their jobs despite the hardships their companies have to go through under current economic conditions.
The least these people could do is improve their productivity and work attitude. Instead, they threaten to report to the labour authorities every time their employers talk of cutting costs or seek their understanding to take a pay cut for a while.
If I were the employer, I wouldn’t hesitate to announce a voluntary separation scheme (VSS) for these workers, compensate and let them go. I see this as a viable option to sacrifice some workers, thereby saving the business and jobs.
So long as the power to retrench workers is exercised on valid commercial reasons, the employer will be immune from examination even by the Industrial Court.
When it comes to layoffs, the bosses’ decisions are influenced mostly by their workers’ job performance, as poor performers are targeted for retirement. Poor work attitude is another reason and the health condition of the workers is also a factor.
But retrenchment or VSS should be the last resort. Employers should first look into options like freezing new hiring, transferring staff to another department or giving them alternative jobs within the company, or retraining them for redeployment.
According to Prof Datuk Seri Dr Ashgar Ali Ali Mohamed of International Islamic University Malaysia, “if retrenchment is still inevitable after all the necessary measures have been taken, the employer should consider offering a voluntary separation scheme or paying retrenchment compensation, which is primarily intended to cushion the affected workers during the difficult time after loss of employment”.
Anyway, let’s be fair to the employers. Retrenching workers is not something bosses like to do if they can help it. It’s stressful not just to the affected employees but also the human resources people.
Finally, retrenchment and VSS also affect the image of a company, as it gives an impression to the public that the company is struggling to survive.
As for us, the employees, let’s work hard, be productive — both at home (you know what I mean) as well as at the workplace — and help our employers pull through.
