KUALA LUMPUR, Aug 8 — Parti Sosialis Malaysia (PSM) has warned the government against bowing down to pressures from employers, urging today for the Employment Insurance System (EIS) Bill to be debated for a second reading in Parliament.

PSM said the Malaysian Employers Federation (MEF) and Federation of Malaysian Manufacturers (FMM) have long opposed the scheme since it would reduce their profits.

"If employers are sincere about cutting their business cost then they should look at the wage rate and bonuses of their top management, or the rate of dividends awarded to shareholders every year.

"The government as the defender of workers’ rights, should not bow down to pressure from employers and complete its social responsibility by ensuring EIS is implemented,” PSM workers bureau chief M. Sivaranjani said in a statement.

PSM admitted that it has many reservations regarding the Bill, but maintained that it still needed to be debated in Parliament despite the formation of a committee that would be consulting stakeholders for feedback on the EIS.

Despite that, the party said it has campaigned for nearly two decades for a retrenchment fund with similar functions to the EIS, and has held a nationwide road show to obtain responses from the workers — who they found have welcomed the law,

"PSM strictly states that the EIS Bill must be passed quickly so its implementation can start before January 1, 2018. PSM hopes from January 2018, workers will be protected by the EIS. If it is delayed again, more workers who are retrenched would be left out,” she said.

"The best way is to allow a second reading debated in Parliament and by taking into account opinions on it. Cancelling a second reading is akin to a step to ‘settle’ with the demands of employers and pro-employer ministers in the Cabinet.”

The EIS, which would allow retrenched workers to claim a portion of their insured salary for between three and six months of unemployment as well as allowances, was tabled for the first reading in the Dewan Rakyat last week.

Contributions to the Employment Insurance Fund, which will be based on the worker’s salary, are split equally between the employee and the employer. The contributions based on fixed rates range from 20 cent for workers earning RM30 monthly to RM59.30 for employees earning RM4,000 and above a month.

Employers have since expressed misgivings over the proposed law that would provide a safety net for retrenched and unemployed workers, citing the added cost as well as apparent redundancies.

The Malaysian Employers Federation also questioned the rationale of collecting an estimated RM1.6 billion annually for the EIS, or over five times the compensation for all workers retrenched in the Asian Financial Crisis.