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Insurance for jobless employees

Malaysia expected to implement Employee Insurance Scheme next year

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Malaysia’s deputy human resources minister Ismail Muttali has announced yesterday in a report by Free Malaysia Today that the Employee Insurance Scheme (EIS) is expected to implement financial aid to jobless Malaysians next year.

Highlighting that the initiative will be run by the Social Security Organisation (SOCSO), he said: “The National Economic Council passed the scheme on 9 January. It will be discussed by the cabinet as soon as possible.”

“The law providing this is expected to be tabled this year for implementation in 2018,” he further commented.

He also said the scheme was expected to provide aid to laid-off workers who are looking for another job and who contribute to SOCSO.

This was a response to a question raised by Abdullah Sani Abdul Hamid (PKR -Kuala Langat) in a Q&A session at Dewan Rakyat. 

Sani had urged the ministry to implement the scheme as soon as possible as “some of the poorer countries such as Vietnam had implemented the scheme several years ago”.

Jasin MP Ahmad Hamzah also raised the issue of the unemployment rate in the country increasing with 512,000 jobless workers. Not only that, he noted that under-employed workers was also on the rise at 500,000 people.

To that, Ismail responded that the insurance scheme would also include them.

In neighbouring Singapore, for workers who have served more than two years, payment of retrenchment benefits is mandatory if it is specified in their individual employment contracts or the collective agreements negotiated by their unions.

According to Ministry of Manpower’s (MOM) survey on retrenchment benefits in 2015, in 2015, nine in 10 organisations (91%) paid retrenchment benefits to eligible employees, down slightly from 94% in 2012. Among these, large establishments with at least 200 employees (97%) and unionised establishments (100%) were more likely to pay retrenchment benefits.

Photo / 123RF

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