15)malaysia employment laws 1955

8/13/2019 15)Malaysia Employment Laws 1955

1/45

HUMAN RESOURCES MANAGEMENT(H RM730)

BM7001DF

P R E S E NT E D F O R :A S S O C . D R . R O S H I D I H A S S A N

MALAYSIA EMPLOYMENT

LAWS

P R E S E N T ED B Y :NU R S U AI NAH B I NT I S U L U M ( 2 0 1 3 8 3 5 4 7 4 )


2/45

OUTLINE OF PRESENTATION

Part 1: Introduction

Part 2: Individual Employment Contracts

Part 3: Coverage of the Employment Act

Part 4: Employees Right to Unionise

Part 5: Notice to Terminate a ContractPart 6: Breach of Contract

Part 7: Minimum Days of Work for Estate Workers

Part 8: Payment of Wages

Part 9: Employment of WomanPart 10: Working Hours and Leave

Part 11: Termination Benefit

Part 12: Employment of Foreigners

Part 13: Changes to the Employment Act


3/45

PART 1 : INTRODUCTION

What:

Employment law is often labelled as either individual(law relating tothe employer employer relationship) or Collective (relationship

between employer, the employee and third party, normally thegovernment and/ or trade unions)Hardy (2006)

It involve three task Creating Employment

(recruitment and selection)

Maintaining Employment(Contractual terms and conditions / statutory rights)

Terminating Employment

(Dismissals and potential litigation)


4/45

PART 1 : INTRODUCTION

Provide a number of minimum benefit for the workers

Establish certain rights for both employersand employees

Purpose:

Compliant with the law

Written in a language the

employee can understand

Complete; include terms

and conditions


5/45

PART 2: INDIVIDUAL EMPLOYMENTCONTRACTS

2.1 Contract of Service

2.2 Contract for Service

2.3 Apprenticeship Contract

2.4 Written and Oral Contracts

2.5 Terms and Conditions

2.6 Express Terms in a Contract of Employment

2.7 Changing the Terms of a Contract

2.8 Duration of the Employment Contract


6/45

2.1 CONTRACT OF SERVICE

Any agreement, oral or in writing, express ofimplied, whereby:

One person agree to employ another person as an employee

The second person agrees to serve his employer as anemployee

Includes an apprenticeship contract


7/45

2.2 CONTRACT FOR SERVICE

Person or vendor engaged for a fee to carry out an assignment or aproject for the company

No Employer - Employee relationship

Self-employed, freelancer, independent contractor

(contractor - client contract )

The employee is not covered by the Employment Act.


8/45

2.3 APPRENTICESHIP CONTRACT

A written contract by a person with anemployer who

Undertakes to employ the person and

Train or have him trained systematicallyfor a trade

For s period of not less than 2 years

During which the apprentice works inthe employers service


9/45

2.4 WRITTEN AND ORAL CONTRACTS

Section 10(1) EmploymentAct 1955

Section 2(1) EmploymentAct 1956

Must be in written and includeprovision for termination


10/45

2.5 TERMS AND CONDITIONS

Content of the contract or

the promises made by eachparty to the other

Its include the number of hoursper day or per week the

employee is to be available todo the employers work


11/45

2.5 TERMS AND CONDITIONS (Contd)

ExpressTerms

Terms put in writing, or agreed orally.

Usually found in letters of appointment, company

handbooks and collective agreement

It is important to distinguish between items which are

terms of the contract and those which are not

Standard terms and condition in contract ofemployment:

Job titleWages and details of other monetarypayments such as allowances and bonusNormal working hoursHoliday and leave entitlementsProbationary periodNotice period for terminationRetirement Age


12/45


ImpliedTerms

Law court will imply certain terms into a contract on

the grounds that these items are so obvious that there

is no need to put them expressly in the contract

it is implied, into every contract of employment, that

an employee will serve his employer:

With due Caredoing his work responsibly and safely

Obediently will carry out any lawful order of hisemployer and

Faithfulwill not take any action which would harm his

employersbusiness


13/45


ImpliedDuties of

Employers

Maintain arelationship ofmutual

respect andtrust

Pay theemployee

wagesProvideemployee

with the safetyworking

environment


14/45

2.6 CHANGING THE TERMS OF CONTRACT

Only can be changedby mutual consent

Any employer who triesto unilaterally changethe contract may beaccused of breach of

contract

Any employer breachesa major terms of

employment contract,an employee mayclaim constructive

dismissal


15/45

2.7 DURATION OF THE EMPLOYMENTCONTRACT

The former are known as fixed-term contracts where:

i) Specify the time period

ii) Longer than one month

iii) Must be in writingiv) will terminate automatically at the end of the stated

time period or when the work is finished

Particular period oftime or Open-ended

Not Specify theduration


16/45

PART 3: COVERAGE OF THE EMPLOYMENTACT

3.1 Wages

3.2 Manual Work


17/45

3.1 WAGES

Wages is defined as basic wages and all otherpayments due under the contract of service,

excluding:


18/45

3.1 WAGES (Contd)

if an employer fails to pay an employee wages, the employer breaksthe contract of service

Section 15 (1), Employment Act 1955

Employee cannot recover wages from employer for time spent in prisonor attending court

Section 23, Employment Act 1955

Wages must be paid in legal tender (money)Section 19, Employment Act 1955


19/45

3.2 MANUAL WORK

Someone who uses his hand (and probably feet too) toperform the job

For example: Gardener and construction people

Use their brainpower very little


20/45

PART 4: EMPLOYEES RIGHT TO UNIONISE

Employers may not put any clause in a contract of employment which

in any way restricts the right of an employee to join a registered trade

union, to participate in the activities of that union, or to join with others

for the purpose of forming a union. (Section 8, Employment Act 1955)

A trade union must be recognized by the employer to represent the

workers.If an employer is approached but refuses to recognize the trade union,

the union must report in writing to the Director General of Industrial

Relations. (Section 9 (4) Industrial Relation s Act)


21/45

There are two provisions:

PART 5: NOTICE TO TERMINATE ACONTRACT

Employer can decide the

noticed period required and

have this agreed to in the

contract of employment

Length of service Length of notice

< 2 years 4 weeks

2 years to < 5 years 6 weeks

5 years & above 8 weeks


22/45

PART 5: NOTICE TO TERMINATE ACONTRACT

Whatever noticed period isagreed upon between the

employers and employee, it mustbe the same for both parties

Employer andemployee can

terminate a contract

without giving a noticeif they pay to otherparty an indemnity


23/45

PART 6: BREACH OF CONTRACT

If an employer fails to pay wages as required by therelevant section on wages, then it is guilty of breach

of contract

The breach does not occur if: The employee absence less than 2 consecutive working days

Employee have reasonable excuse for his absence The employee has informed, or tried to inform the employer as

to why he/she is absent

Section 15


24/45

PART 7: MINIMUM DAYS OF WORK FORESTATE WORKERS

Daily rated workers on

agricultural estates:

At least 24 days per monthprovided the employee is

willing and fit to work

It is necessary because inrubber estates it is not alwayspossible for trees to betapped.


25/45

PART 8: PAYMENT OF WAGES

8.1 Advances on Wages

8.2 Deductions from Wages

8.3 When no Wages Need be Paid

8.4 Truck System8.5 Priority of Wages


26/45

8.1 ADVANCES ON WAGES

Some employers offer an advance on wages at certain times of the year

The Employment Act strictly regulates the givingof advances on wages and subsequent

deductions from those wages

The maximumadvance is equivalentof one months wages

Purpose: buy a house,a car, land ormotorcycle

Not a practice to beencouraged


27/45

8.2 DEDUCTIONS FROM WAGES

Employer may lawfully deduct: To recover overpaid wages in proceeding 3 month prior to the

month of deduction

To pay to employees provident Fund, Employees Social SecurityOrganization and Inland Revenue Board

To recover advances where no interest in charged


28/45

8.3 WHEN NO WAGES NEED BE PAID

The employee is being held incustody by the authorities

The employee is in prison

The employee is required toattend a court hearing or trial(except where employee is a

witness for the employer)

Employers are notrequired to pay wages inthe following situations:


29/45

8.4 TRUCK SYSTEM

wages must be paid in legal tender

Payment may also paid directly into the employees

bank account or by cheque

in 1998, the act was emended to make it clear thatworkers could only insist on being paid in cash if

they had a strong reason


30/45

8.5 PRIORITY OF WAGES

If the

employer isforced by acourt to selloff property

and assetsto pay adebts,

Employees

who havenot beenpaid theirwages

receivepriority overall debtors

But, they

can onlyclaim amaximumof 4 months

wages


31/45

PART 9: EMPLOYMENT OF WOMAN

9.1 Women and Night Work

9.2 Maternity Protection


32/45

9.1 WOMEN AND NIGHT WORK

Not permit women to work between the hours of 10.00 p.m. and 5.00 a.m.

Since 2003,Director-

General ofLabourstated:

Employer providestransport from theworkplace for thefemale working at

night

Establish arotating shift

system for thewomen

concerned

Pays a shiftallowance to the

woman for workingat night


33/45

9.2 MATERNITY PROTECTION

all female employees are entitled

to 60 days maternity leave

up to maximum of 30 days of this

leave may be taken before the workergives birth

During maternity leave femaleemployee does not receive wages,but only to be paid a maternity benefitand allowance

Maternity allowance = RM6 per day


34/45

PART 10: WORKING HOURS AND LEAVE

10.1 Rest Day

10.2 Maximum Working Hours

10.3 Overtime

10.4 Public Holidays10.5 Annual Leave

10.6 Sick Leave


35/45

10.1 REST DAY

Employees in the construction,manufacturing, hotel and

agricultural sectors work a full 6day week

Trend for companies now tointroduce a two-day weekend

break

Hours Payment

Less than normal hour 1 full days wages

Between normal hour and fullhours

2 days wages

Nowadays , a companies introduce a two-day weekend break


36/45

10.2 MAXIMUM WORKING HOURS

The maximum hours that can be required of anemployees are 8 hours a day.

This can be increased to 12 hours with overtime

If employees is not required to work 6 days a week,maximum hours without overtime can be increasedto 9 hours a day.

Lunch and tea breaks are not considered workinghours unless employees are not free to leave thecompany premises


37/45

Employees have the right toreject any request to doovertime unless they haveagreed in contract ofemployment

Rates of pay for overtime workfor monthly rated workers are 1.5times the hourly rate pay

maximum number of hours ofovertime is 104 hours per month

10.3 OVERTIME


38/45

10.4 PUBLIC HOLIDAYS

Employment Act only entitled workers to 10 public holidays

However, Malaysia ha 16 or 17 such holiday (depend on the state)

4 fixed public holiday:

i) Labour Worker Dayii) Independence Dayiii) Birthday of the Yang di-Pertuan Agongiv) Birthday of the state ruler

When a public holiday falls on a workers rest day, the next day will

automatically considered as public holiday


39/45

10.5 ANNUAL LEAVE

Employee is entitled to paid annual leave:

8 daysfor every 12 month of continuous

service (if employed for less than 2 yeas:

12 days for every 12 months of continuous

service(if employed between 2 to 5 years)

16 days for every 12 months of continuous

service (if employed for more than 5 years

E.A does not provide the practice ofcarrying forward unused leave to the next

year


40/45

10.6 SICK LEAVE

Less than 2 years= 14 days sickleave / year

2 to 5 years = 18days of sick leave

/ year

More than 5 years= 22 days of sick

leave / year

Employer does notto accept medical

certificates frompanel doctor


41/45

PART 11: TERMINATION BENEFIT

employees are not entitled to termination benefits if: They retire at the age stipulated in their employment contract

Poor performance

Resign of their own accord

The most common situation where termination benefits are payableis when the employee is retrenched

Minimum 12 months services are entitled to termination benefits:

Less than 2 years = 10 days wages

2 to 5 years = 15 days wages

More than 5 years =20 days wages


42/45

PART 12: EMPLOYMENT OF FOREIGNERS

Legallyemployed

inMalaysia

Entitledto thesame

benefitsas locals

If companypractice

retrenchmentexercise, the

foreign workersmust be

retrenchedbefore local


43/45

PART 13: CHANGES TO THE EMPLOYMENTACT

Coverageof the Act

Annualleave

Definitionof Wages

SickLeave

Group of21 unions

Should be no wages restriction

Clarified to what extent theemployer can utilise

employees annual leave

Needs to be standardisation

between all the various labourlegislation

Should require employers to pay for

treatment of sick employees


44/45

In 1994

Malaysian Trades UnionCongress (MUTC)

Maternity leave shouldextended in both private and

public sectors to 84 days

As recommended by theInternational Labour

Organization

PART 13: CHANGES TO THE EMPLOYMENTACT (Contd)


45/45

THANK YOU

15)malaysia employment laws 1955

Documents