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PETALING JAYA: The situation for most employees is dire. As the economic fallout from Covid-19 deepens, the fight to keep your paychecks coming in increases.
While unions are critical of companies targeting the workforce in their austerity campaign, there is little they can do to save the day for employees.
It has reached a point where the Malaysian Trade Union Congress (MTUC) is forced to advise employees to take on the lesser of the two evils, cutting pay or downsizing, even when the Federation of Employers of Malaysia (MEF) warns that the rise in infections bodes worse to come.
MTUC Vice President Effendy Abdul Ghani said that pay cuts are not the best solution.
“Employees, who are already struggling with rising costs, are being forced to shoulder a heavier burden.
“Some people have already started to dip into their savings, which will last six months at best,” he added.
He noted that 60% of employees in Malaysia have no savings to draw on in times of need, other than their savings from the Employee Provident Fund.
On the other hand, it has become a choice among many employees who accept pay cuts or some lose their jobs.
As MEF CEO Datuk Shamsuddin Bardan warned, employees will have to deal with pay cuts until at least June 2021.
It all comes down to employees having to make tough decisions. If a company wants to introduce a pay cut, it needs the approval of all employees. Refusal from even one employee can ruin the deal.
“Pay cuts cannot be done unilaterally,” emphasized Shamsuddin.
“If implemented without the consent of all employees, it amounts to a breach of contract, leaving the door open for employees to take (legal) action against their employers.”
However, he also noted that if employees refuse to accept pay cuts, the employer may be forced to opt for a downsizing exercise, and this does not require the employees to cooperate.
In the end, most employees go for the safest option.
“Either you keep your job but take home a smaller pay package, or you lose everything,” Effendy said.
Unfortunately, this is not the end game for employers yet. Even if employees agree to have their wages reduced, some employers may still opt for a downsizing exercise.
“It’s not okay. We understand times are tough, but the well-being of employees must also be considered,” Effendy said.
Saiful Nizam is one of the many who lost their jobs. The former employee in the hospitality industry had his livelihood taken away when the hotel he worked at closed in July.
“Now I depend on my savings to survive and am actively looking for a new job. But, as you know, it’s hard to find work right now. “
He estimated that between 70% and 75% of his friends lost their jobs or received pay cuts.
Saiful found a job as a swim coach, but also lost it when the conditional motion control order was implemented in the wake of the recent spike in Covid-19 infections.
Another hotel employee who also lost his job now regrets not taking a pay cut.
Like so many others in the same situation, he is willing to reinvent himself to be able to serve in other sectors. But for now, it may still be a long shot.
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