Tuesday, October 21, 2014

MALAYSIA:::MTUC: Don't short-change workers

The Malaysian Trades Union Congress (MTUC) has warned Malaysian Airline System Bhd (MAS) and major shareholder Khazanah Nasional Bhd not to short-change the 6,000 airline employees who may be made redundant under its overhaul plan.

The MTUC, which is Malaysia’s biggest labour union, says it fears the worst for MAS employees who may Employees Union Peninsular Malaysia, National Union of Flight Attendants Malaysia and the Malaysia Airlines Pilot Association.
“We see the restructuring plan by Khazanah for MAS is ‘not proper’ and it is still not transparent on the issue of the proposed MAS’ new legal entity (NewCo) or on how the government investment arm is planning on working out a mechanism for the retrenchment of MAS employees.
“We have seen in the past many employers coming up with various tactics in forcing employees to accept VSS (voluntary separation scheme) or MSS (mutual separation scheme) and we do not want to see MAS undertaking the same measures and ‘short-changing’ the workers,” 
Under the restructuring framework, the NewCo would only require an estimated workforce of 14,000 from the current 20,000, which is part of Khazanah’s attempt to take the loss-making carrier private, restructure and return it to profitability within three years.
Khazanah said it will invest in a Corporate Reskilling Centre to address the reskilling of up to 3,500 MAS staff who will not migrate to the NewCo.
However, the Public Accounts Committee chairman Datuk Nur Jazlan Mohamed recently criticised the restructuring proposed by Khazanah, saying the plan is not something new but in fact “rehashed” from a similar plan carried out by former MAS CEO Senator Datuk Seri Idris Jala.
He said the only difference is Khazanah now wants to enforce a law enactment to protect MAS, and pointed out the 2005 restructuring plan clearly did not help MAS come out of its financial distress.
Gopal Krishnam said the MTUC is concerned for MAS workers and their families, as the number of employees in MAS and their families that will be be affected by the exercise is expected to number around 100,000 based on rough estimation.
“The priority here is MAS and its survival. We do not want to see Khazanah’s restructuring process affecting the productivity and efficiency of the employees from this restructuring exercise,” he said.
Gopal Krishnam also denied that the airline’s inability to get into the black despite several attempts were due to union interference.
“I do not agree the unions hindered MAS’ previous turnaround plans and the current restructuring plan. The basic fact is that MAS management and stakeholders must not blame the workers for the carrier’s sustained losses.
“Business decisions and strategies are the sole responsibility of MAS senior management and board of directors and the workers are simply ‘scapegoats’ in all of these.”
Even as the unions deny their role in preventing MAS from going ahead with drastic plans, a CIMB Research analyst said MAS and the government may yet back down from their aggressive plan for the airlines.
“Already, we are beginning to hear noises from the unions, which will get only get louder over time. But the government appears determined to see restructuring through this time around,” the analyst said in a recent report.
Frost & Sullivan Malaysia country head Hazmi Yusof said it would be a good strategy if Khazanah’s restructuring exercise of MAS should somewhat benchmark Japan Airlines (JAL) by way of “retraining and relocating” workers into Khazanah’s other entities.
“Cutting 6,000 job is something unheard of in Malaysian history. Despite the inevitable situation at MAS, there is a high probable chance, other than VSS, for Khazanah to retrain and relocate them into other entities, something JAL did back in 2010,” he said.
In JAL’s case, it delisted from the Tokyo Stock Exchange, cut the number of routes, reduced staff by a third, persuaded its unionised pilots and staff to take big pay cuts, while the airline retirees and employees agreed to more than US$11 billion (RM36.01 billion) in pay and pension cuts.
As a result, JAL’s results surged 17% in its operating profit margin and has positioned the carrier as one of the world’s most profitable airlines.
“This would be a workable strategy for Khazanah as it worked with JAL, apart from VSS exercise to cut staff,” Hazmi said.

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