1,891 workers in Malaysia are allegedly no longer employees of CIMB. They have allegedly been let go under a MSS(Mutual Separation Scheme), or what would have previously been called a VSS (Voluntary Separation Scheme).
How voluntary was it? Well, there have been cases in the past where workers really did not have much of a choice, i.e. accept the MSS/VSS or later you will be laid off (or retrenched). These MSS/VSS schemes may sometimes be offering a higher pay-out, compared to the existing termination or lay-off benefits in employment contracts or Collective Bargaining Agreements(CBA) - and, as such really employees have not much of a choice in the matter - accept the proposed VSS/MSS or later still be retrenched.
The validity of this 'voluntariness', alleged 'mutual agreement' have resulted in many cases in the past being workers who allegedly agreed to such schemes, and as such, we should not speedily come to any conclusions...
“Now, we have a lot of cases where an employee accepts VSS and then takes the company to court,” Shamsuddin [Malaysian Employers Federation(MEF) executive director Datuk Shamsuddin Bardan] said when contacted. - Malaysian Insider,1/7/2015
...there were many cases where workers were made to choose between two unpalatable options in so-called VSS schemes.
Gopal [Malaysian Trades Union Congress secretary-general N. Gopal Kishnam] cited a case where workers at a factory were given two choices: either sign on to a new employment agreement where they will no longer be union members or take the company’s VSS.“Staying on with the company is even worse because there will be no union to protect their interests and their welfare will not be covered by a collective bargaining agreement.“So can you call something like this voluntary? In such cases, the remedy left to the worker is to take the VSS offer and file a complaint at the industrial court.”- Malaysian Insider,1/7/2015
Now, if an employer wants to 'reduce employees', the law provides for certain legal requirements - like the LIFO(Last In First Out) principle, the obligation on the employer to try to place the worker in another position within the business establishment before letting go the worker, etc.. but if it is a VSS/MSS scheme all these do not apply - and the rights and requirements in law can be simply avoided.
“Unlike a retrenchment scheme, you don’t have to inform and justify your reasons to the ministry with a VSS and MSS scheme.” - Malaysian Trades Union Congress secretary-general N. Gopal Kishnam
Was it really there was no more need for the said employees - because no more work? Or was it really a move by the company to get rid of 'REGULAR EMPLOYEES until retirement' and replace them with short-term contract employees, or even 'workers supplied by third party contractor[the Contractor for Labour] - which means these new workers will no longer be employees - so no more employer obligations - and these new supplied workers cannot join the union the said employees of the bank are now in'.
In short, was the move by CIMB really a 'Union Busting' exercise - weakening of the Union by effectively reducing Union members?
Workers who were enjoying the rights as 'Regular Employees' (job security until retirement age) now will find themselves in a most precarious situation.
They are out there in the market looking for jobs, and they will be joined by the 6,000 from MAS on 1/9/2015, - and will they be able to get regular employment ....or will they end up with precarious employment? The later most likely. Will they be able to get employment that pays the same wages and benefits - or will they all now all end up with precarious employment with lesser wages and benefits... and 'worry & stress' about finding new jobs when their contract ends?
Now, most Malaysian worker, based on the fact of being 'regular employees' which was secure, and wages/benefits that were bound to increase with length of tenure would have made decisions to purchase homes, cars, etc... and the obligation to make these monthly payments will not lapse just because they are 'jobless'...or the obligation will not change because their 'income' has dropped..., will it now?
It is sad that media seems more concerned about employer business - rather than the future wellbeing and welfare of these workers and their families - which was once 'stable' but have now become most precarious.
Malaysia still does not have a scheme to assist workers that find themselves 'unemployed'. Thailand already has such a scheme that will enable the unemployed some income for a certain period until they find new employment and income. MTUC has called for such a scheme for workers - but Malaysian government has still not done anything...
These MSS/VSS scheme may be attractive for some workers because they get a 'lump sum payment' ...but alas it will be gone soon enough, and at the end of the day they will find themselves in some 'precarious employment' with no security and guarantees. With the amendment of retirement age law, regular employee would have been assured of employment and income until 65... but now, the employers will really not be so interested in hiring 'senior' workers, would they?
Now, if the worker has been 'forced', tricked, deceived, etc to sign these MSS/VSS, workers can take their claim to the courts - and interestingly, we see the Malaysian Employers Federation(MEF) seem to be calling for this right to do so be extinguished...
It[ Malaysian Employers Federation] proposed, among others, that workers should not be allowed to take their employers to court if their dismissals were not related to misconduct. These types of dismissals include lay-offs because of company retrenchment, or if the business ceases operations and dismissals due to voluntary or mutual separation schemes (VSS and MSS)...- Malaysian Insider,1/7/2015
CIMB Group to incur RM443m from separation scheme
KUALA LUMPUR: CIMB Group Holdings Bhd and its Indonesian arm PT CIMB Niaga TBK, which have completed their mutual separation scheme (MSS) exercise, will incur about RM443.3mil in MSS cost.
CIMB said in a statement on Wednesday that savings from the headcount reduction was estimated to be RM291.6mil per year, which translates to an 18.2 months’ payback.
The group approved a total of 3,599 applications (1,891 from Malaysia and 1,708 from Indonesia), representing rationalisation of 11.1% of the total workforce in the two countries.
The country’s second-largest lender announced its first-ever group-wide MSS, which was voluntary, in mid-May to improve its efficiency level. The deadline for all applications for the MSS in Malaysia was May 29.
“The MSS was introduced as part of our continued efforts to enhance efficiency and productivity within the group. With the completion of the MSS, we are on track to meet the targets set in our cost-to-income plans outlined in our T18 strategy,” said CIMB Group chief executive Tengku Zafrul Tengku Abdul Aziz.
“The MSS exercise has also benefited successful applicants and I would like to thank them for all their contributions and wish them all the best in their future endeavours.”
The CIMB group is present in nine out of 10 Asean countries, but the MSS exercise was not implemented outside the two countries. - Star, 1/7/2015