Unfair to give 16 days’ annual leave for all, says business group

 

An increase in paid annual leave will lead to higher operational costs, says the Small and Medium Enterprises Association of Malaysia.

PETALING JAYA: 

A business group has poured cold water over a proposal to standardise paid annual leave at 16 days a year for all workers regardless of their length of employment.

Such a ruling would be unfavourable to both employee and employer, said William Ng, president of the Small and Medium Enterprises Association of Malaysia (Samenta).

Many companies already provide 18-21 days’ leave for those with more than five years’ service, he said. Generally, employees get a minimum of 14 days, which could be raised to 18 days later.

The Employment Act currently provides for 8 days’ annual leave for employees who have served for more than 12 months but less than two years; 12 days for employees with 2-5 years’ service; and 16 days for those with more than five years’ service.

Ng said companies want to be able to give more for more loyal employees and loyal employees want to get more,” he said, adding that the minimum leaves prescribed by the Employment Act is reasonable.

A tiered leave structure would promote loyalty to companies and help employers to retain their workers, especially when senior management in view of their responsibilities.

Any forced increase in the amount of annual leave would lead to higher operational costs and would further slash profit margins resulting in some of these businesses becoming non-viable, he said.

“In the retail environment, the same is true, especially since most retailers are already struggling to break even and find workers to operate during festive seasons,” he told FMT.

The proposal for a standard 16 days’ annual leave was raised by Pasir Puteh MP Nik Zawawi Salleh last week. He said the Employment Act should be amended so that all workers are entitled to 16 days’ paid annual leave, regardless of their length of employment.

Nik Zawawi contended that a standard amount of annual leave would motivate staff to work more efficiently.

Ng said if the government were to amend the law, it should also amend the Holidays Act to make it compulsory that parliamentary approval is obtained before any ad-hoc holidays are declared, as too many of such holidays would affect productivity.

Malaysian Employers Federation president Syed Hussain Syed Husman said leave entitlements generally increase over time based on an employee’s loyalty and performance.

“That said, the difference in leave entitlements is usually not significant, as all employees generally start with the same base amount.” - FMT