APRIL 17, 2003 THU

Firing workers? Not without KL's approval

A close eye is being kept on firms so that the war in Iraq and the Sars scare are not used as excuses for sacking workers

By Reme Ahmad

THE Finance Ministry has told companies controlled by the government that they must seek its approval before retrenching workers.
The move signals government concern about the possible impact of an economic slowdown.
And it follows a recent warning by Human Resources Minister Fong Chan Onn that private-sector employers could be hauled up to justify their retrenchments if they blame it on the war in Iraq or on the severe acute respiratory syndrome (Sars) outbreak.
The government move also reflects concern that companies will use the war and Sars as reasons to start shedding workers soon, although the impact may not affect every company in the same harsh manner.
'If companies have to seek approval, it will be more difficult to retrench workers.
'This will help to contain the job cuts,' said economist Azrul Azwar of MIDF Sisma Securities.
Data from the Human Resources Ministry website showed that 6,004 people were retrenched from the start of the year to April 5.
A total of 26,457 people were retrenched last year.
The economy has already shown signs of weakening.
The government last month downgraded its forecast for economic growth to 4.5 per cent for this year, from a 6 to 6.5-per-cent growth estimate made in September last year. But many economists are said to be seeing even slower economic expansion.
American investment house Morgan Stanley, which sees a world recession this year, recently cut its economic growth forecast for Malaysia to 3 per cent from an earlier forecast of 4.1 per cent.
Asked about the ruling issued by the Finance Ministry on retrenchments yesterday, Acting Prime Minister Abdullah Ahmad Badawi said the move was appropriate because retrenchments could cause upheavals.
'I think it is appropriate for them to tell us and what they want to do after that. This is the better way.
'It is not our intention to make it difficult and reject it every time. But if there is something that must be done, we are willing to listen,' he told reporters.
The government's investment arms such as Permodalan Nasional Bhd, Khazanah Nasional or Minister of Finance Inc have stakes in large companies that employ thousands of workers.
They include Telekom Malaysia, Malaysia Airlines and state oil firm Petronas.
Human Resources Minister Datuk Fong said his ministry was closely monitoring the industries to ensure that companies did not use the war in Iraq and Sars as excuses to lay off workers.
'Employers may face action if they are found to be using this uncertain period as an excuse to retrench workers,' he said.
The Malaysian Trade Union Congress (MTUC) has asked the government to tell companies not to resort to asking workers to go on unpaid leave unnecessarily, as this could breach employment regulations.
MTUC secretary-general Mr G. Rajasekaran said he was concerned workers on extended no-pay leave might just quit the company to look for another job, thus allowing the firm to gain unfair advantage by not having to pay retrenchment benefits.