This article first appeared in The Edge Financial Daily on October 26, 2017

KUALA LUMPUR: The revised Employment Insurance System (EIS) Bill was approved by the Dewan Rakyat late yesterday, with lawmakers from both sides of the divide giving their support to the proposed scheme that seeks to provide financial assistance to workers who lose their jobs.

Deputy speaker Datuk Seri Ronald Kiandee announced that the bill was passed at around midnight after 14 MPs participated in the debate with some calling on the government to fine-tune the proposed law before expressing their consent for the bill.

One of the main issues touched on during the debate was the six-month period of support from EIS after employees lose their jobs.

Human Resources Minister Datuk Seri Richard Riot Jaem responded by saying that the proposed period was based on actuarial forecast. “Our actuarial study shows that reskilling can be done in six months,” he said.

DAP’s Klang MP Charles Santiago, however, suggested that the government should also contribute to the EIS to enlarge the fund’s size so that it is capable of  providing jobless support for a longer period.

“Nobody is going [to] get trained in six months; please consider revising it to 12 months. Other countries like Vietnam are able to do it because their government is chipping [in] the contribution as well. But in Malaysia, only two parties — employees and employers — are doing so,” he said.

Riot, however, responded by saying that most countries implementing the EIS or a similar scheme only have the employers and employees contributing. He added that although the government is not contributing, it has allocated RM122 million to pay the interim interest for the scheme from 2018.

Santiago, in his debate, also pointed out that the EIS may not be able to protect Malaysians in their 40s and 50s with the six-month support, as employers are generally skewed towards hiring foreign workers instead of a reskilled older Malaysian.

Riot, however, said there are job opportunities matching all age groups. “Should they require new skills, EIS will help them obtain the new skills,” he said.

The EIS aims at providing financial assistance to private workers who lost their jobs until they find new employment. The government is committed to implementing the scheme in January 2018.

Retrenched workers will also be given help to search for new jobs, career counselling and training.

The bill applies to all industries, for employees with one or more employers. However, it bars spouses of employers, civil servants from both the federal and state governments, as well as domestic helps including house maids, cooks and drivers from the insurance coverage.

Santiago urged the government to review this policy as he opined that spouses should not be excluded from EIS coverage. “We shouldn’t victimise spouses in this case [to avoid manipulation]. In a firm, not only can husband and wife work together, their children could be in the same company as well,” he said.

The government initially tabled the bill for first reading in August, but subsequently put it on hold to allow the cabinet to have more time to get feedback from stakeholders.

On Monday, Riot tabled the revised bill which saw the contribution rate for  both employees and employers reduced to 0.2% from 0.5%.