KUALA LUMPUR, Nov 26 — The Finance Ministry tabled a new piece of legislation to oversee the administration of financially-troubled Malaysia Airlines System Berhad (MAS) for first reading today.
The Bill is to provide for the establishment of a new entity named Malaysia Airlines Berhad (MAB), which will replace MAS as the national carrier.
It is also to allow the government to manage the revamped airline and all its subsidiaries that provide goods and services essential to the airline’s operations, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said when tabling the Bill today.
The national carrier was delisted in August after sovereign wealth fund Khazanah Nasional Bhd offered to buy out minority share for a total of RM1.38 billion to restructure MAS, which suffered two disasters this year.
The total takeover is to cost state-owned firm Khazanah Nasional Berhad, the majority-shareholder in the airline, a cool RM6 billion after the double tragedies of MH370 and MH17 had threatened to sink MAS’ poor financials.
The sovereign wealth fund later unveiled a 12-point turnaround plan for the national carrier, titled ‘Rebuilding A National Icon – The MAS Recovery Plan’, which includes transferring all MAS assets to a new entity tentatively known as ‘MAS Baru’ or ‘new MAS’.
Flight MH17 was shot down in Ukraine in July, four months after another flight MH370 en route to Beijing from Kuala Lumpur vanished mid-air, in March. No trace of the earlier plane has been found.
However, even before the mysterious disappearance, the carrier had racked up RM4.13 billion in losses over three years.
The Bill tabled today stated that MAB will be registered as a new entity under the Companies Act 1965, stressing it will not be a successor employer.
The Bill seeks to give MAB, together with its subsidiaries, the power to decide whether or not to continue with the current administrator or to appoint a new one.
In the Bill’s explanatory clause, it is stated that the offer of employment “is not made in the capacity of a successor, assignee or transferee or a successor employer to the companies”.
“As a result, Malaysia Airlines Berhad is not liable for any obligations of the administered companies relating to any retirement plan or other post-employment benefits plan of employees or former employees of the administered companies or for any monies due to any employees of the companies prior to the Malaysia Airlines Berhad becoming the employer of a particular employee,” the Bill stated.
MAB, as the appointer and the administrator, also cannot be made a party in any claim or proceeding which is commenced or continued by any employee or former employee pursuant to the Industrial Relations Act 1967, Employment Act (1955), Sabah Labour Ordinance 1959, Sarawak Labour Ordinance 1952 or the Trade Unions Act 1959.
The administrator, among other stipulated responsibilities, is allowed to re-negotiate the terms and conditions of any contracts and or agreements entered by MAS and its subsidiaries.
The Bill also stated that matters that relate to productivity or effective use of MAB’s workforce will be excluded from being negotiated between MAB and trade unions.
Instead it is stated that matters relating to productivity or effective utilisation of workforce, including on leave entitlement, working hours, scheduling of work including flight time limitations and flight duty periods will be determined by MAB in compliance with applicable laws and international standards.
But Khazanah has established an Outplacement Centre (OPC) that will provide support to the 6,000 staff who will be retrenched in terms of placement and professional, emotional and financial support during the transition period.
The Bill also provides immunity for the administrator from being sued or prosecuted in any court or tribunal for any loss or damage caused by its exercise of power under the new legislation, unless it was due to “wilful misconduct or gross negligence”.
The legislation, once gazetted shall apply for a period of five years, or until MAB is listed on the stock exchange.
