Employers who do not utilise the human resource development fund to upgrade their workers' skills will have their contributions forfeited by Pembangunan Sumber Manusia Berhad (PSM Berhad).

Human Resources Deputy Minister Dr Abdul Latiff Ahmad said the forfeited money will then be used for other human resources development purposes.

"The fund is not being fully utilised by employers to train their workers," said Latiff when he officiated a national conference on "Human Resource Development in the Era of K-Economy" in Kuala Lumpur today.

"We have established the fund to enable employers to train their workers. But the response was not encouraging as only 58 percent of the fund were used by employers last year," he said.

Latiff added that for the small- and medium-sized industries, only 55 percent of their workforce were trained using the fund.

"This is a huge waste for our workforce," he said.

Monthly contributions

PSM Berhad was incorporated under the 1965 Companies Act to manage the fund which was derived from a levy imposed on employers to encourage them to train their workers.

The fund is governed by the 2001 Pembangunan Sumber Manusia Berhad Act and it provides that employers make monthly contributions amounting to one percent of their employees' monthly wages to the fund.

Under Section 24 of the Act, an employer who does not claim from the fund for purposes of training workers within the period stipulated by the PSM Berhad board shall lose the eligibility to receive any financial assistance or other benefits.

There are 17 members comprising representatives from the government sector, employers and independent members on the board of PSM Berhad.

While there are 10 representatives for the employers, there is not a single trade union representative, unlike a similar scheme in Singapore which is administered by a tripartite body comprising the government, employers and trade unions.

The Singapore Skills Development Fund was introduced in 1979 under a Skills Development Levy Act. The fund today supports the training of 500,000 workers. In 1998, it collected S$20 million (RM42 million) from its one percent levy on employers but committed S$80 million (RM168 million) for training.