This article first appeared in The Edge Financial Daily on April 6, 2020

KUALA LUMPUR: The extra assistance for small and medium enterprises (SMEs) to be announced by the government must come with adequate conditions to ensure the SMEs do not retrench workers or cut their salaries and leave, the Malaysian Trades Union Congress (MTUC) said yesterday.

MTUC acknowledged that some of these SMEs are in dire straits and therefore may even need direct cash assistance as the only way to survive the economic downturn and enable workers to keep their jobs.

“What has been forgotten in this clamour for more government assistance is that these very same companies employ 64% of the total workforce in the private sector. As such, the thrust of the government assistance should be on SMEs and the workers as well,” MTUC secretary-general J Solomon said in a statement.

Solomon said some employers had reportedly forced workers to apply for voluntary retrenchment, wage cuts and leave.

“The government must through the minister of human resources make emergency employment regulations to prevent retrenchment, wage cuts and forced annual leave availment during the next one year,” he said. Solomon noted that Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz has sounded the possibility of an economic recovery in 2021 and had said that there is RM121 billion as an extra capital buffer in the financial system. 

“Having this ‘cushion’ makes it all the more imperative for the government and employers not to neglect workers by ensuring they keep their jobs and their income intact.

“Whatever cash assistance given to SMEs must be used to retain their staff and provide long-term job security,” he said. Solomon said there should be no compromise on protecting B40 (bottom 40% income group) workers, most of whom depend on daily or low monthly wages.