As many companies are battling with financial difficulties in the trying period, the government will allow factories and business owners in Malaysia to cut short their working days and hours as a mean to cut their operating expenditures.

This means workers will be forced to undertake pay cut due to shortening of their working hours.

However, before the move is implemented, such plan to cut the operating hours must be presented to the employees or the union representatives, and the suggestion must also get approval from all related parties.

While the loss of the salary portion will make the workers suffer, this is considered the best resort in an attempt not to retrench the workers and to allow the company continuing operating, albeit at a slower production rate. As told by the Labour director-general, Datuk Ismail Abdul Rahim, “It is the duty of the department to ensure that workers were adequately protected and at the same time, companies did not lose out”.

In Penang, a number of factories which implemented a 2-week shutdown before the Chinese New Year have extended their operation halt and are offering between 70% and 80% of their monthly salary as they continue to shrink their budget.

By law, any pay cut must be agreeable between the company and the workers, and the company’s management cannot simply make any pay cut announcement prior to discussing with their workers. Workers who find themselves forced to accept pay cut without consent are advised to report to the local labour department.