Image credit: Borneo Post Online
KUALA LUMPUR (July 24): The Federation of Malaysian Manufacturing (FMM) estimates that each unplanned public holiday can cost the manufacturing sector RM1 billion in output and urges the government to swiftly gazette the recently announced Sept 15 public holiday to provide legal clarity for businesses to plan their operations.
“FMM strongly urges the government to immediately issue the official gazette notification confirming the status of the holiday under the Holidays Act 1951 (whether Section 8 or Section 9),” FMM president Tan Sri Soh Thian Lai said in a statement Thursday.
This is critical to provide legal clarity and enable businesses to plan operations, workforce scheduling, and ensure compliance with the Employment Act 1955, Soh said.
The manufacturing sector is highly sensitive to last-minute holiday declarations due to tightly scheduled production timelines, export commitments, and labour shifts, he added.
Under the Holidays Act 1951, Section 8 provides for a minister to declare additional holidays or substitute public holidays or bank holidays nationwide or statewide, while Section 9 provides for state authorities to declare state holidays. The different sections dictate different legal obligations for employers.
Malaysian employees are entitled to a minimum of 11 public holidays under the Employment Act 1955. Five of them are fixed, namely: the National Day, the birthday of the Yang di-Pertuan Agong, the birthday of the state ruler or the Federal Territory Day, depending on where the employee works, Labour Day and Malaysia Day. Employers then select six more from any gazetted holidays (national or state) to meet the 11-day minimum.
Additional holidays declared under Section 8 are automatically added to the compulsory list. But if an additional holiday under Section 9 is declared, the employer is generally not legally obligated to observe it if the minimum 11 public holiday requirement is already met, unless their company policy commits to observing all gazetted public holidays.
FMM advises employers to monitor the official gazette once issued to confirm compliance obligations, and consider using the substitution option under the Employment Act 1955 if the new holiday is gazetted under Section 8.
Four-day disruption
The declaration of Sept 15, a Monday, as a public holiday effectively creates a four-day disruption for many manufacturers, covering Saturday through Tuesday for shift-based and continuous operations, said Soh. Such interruptions require production lines to stop and restart, which is both costly and inefficient.
Citing past estimates, FMM said each unplanned public holiday costs manufacturers RM1 billion in output — with export-oriented industries and those with continuous processes, such as steel, chemical and food processing, being the hardest hit.
Smaller manufacturers will face challenges in absorbing these costs and managing overtime and shift replacements. These disruptions have a cascading effect across the supply chain and logistics operations, it said.
Impact on competitiveness
FMM warned that frequent ad-hoc or unscheduled holidays undermine Malaysia’s investment competitiveness.
“Investors and global buyers require predictability and stability. Sudden changes that disrupt production and supply chain commitments risk undermining Malaysia’s competitiveness, especially when the nation is working hard to secure global supply chain opportunities and high-value investments,” Soh said.
While it supports and appreciates the spirit of celebrating Malaysia Day, FMM stressed that economic stability requires policy certainty. “We strongly urge the government to expedite the official gazettement, to provide immediate legal clarity and enable businesses to manage operational risks effectively,” added Soh.
Source: https://theedgemalaysia.com/node/763808