FMM disappointed with retirement age bill

The Federation of Malaysian Manufacturers (FMM) today expressed disappointment that the Minimum Retirement Age Bill tabled
in
Parliament on Wednesday had not addressed employers' concerns despite
having submitted them to the Ministry of Human Resources (MOHR) in
April.

In a statement today, it said employers were severely
pressured on wage costs with the concurrent implementation of the
minimum wage and minimum retirement age as the former will increase
wage costs and the latter will increase wage costs by delaying
retirement.

To top it, employers are not able to initiate the
necessary adjustments since details of the composition of minimum wage
have yet to be made known, it said.

On Wednesday, the MOHR had
announced that it would gazette the Minimum Wages Order by July 1, 2012
with implementation effective January 1, 2013.

FMM said the
Minimum Retirement Age Bill sent "another shockwave to employers, who
are still grappling in the dark on the implementation of the minimum
wage."

It said the Bill also contradicted the Second Schedule
of the Industrial Relations Act 1967 by including future wages in the
compensation.

"The Second Schedule clearly stipulates that any relief given should not include any compensation for loss of future earnings.

"If
there is unlawful retirement and reinstatement is not appropriate, an
employer could be ordered to pay termination benefits under the
Termination and Lay Off Regulations 1980, in conformity with the
Industrial Relations Act."

"The Bill practices double standards
as employers have to raise their retirement age to the minimum level
and yet there is no automatic raising of the optional retirement age by
the same quantum," FMM said.

FMM recommended an adequate
transition period be given to implement the minimum retirement age, for
example, 24 months from date of gazette and upon application to the
MOHR Minister another 12 months extension.

"The transition
period is to facilitate a holistic review of employment laws to provide
greater flexibility in hiring and firing.

"The minimum wage
should be implemented by zones, for instance starting in the Klang
Valley and at much later dates spanning a year or more in other states
to address differences in the current values of average wages in the
different zones," FMM said.

It also recommended that fixed
allowances defined as wages under Section 2 of the Employment Act 1955
be incorporated as components and not absorbed as an aggregated lump
sum into the minimum wage. -- Bernama