MALAYSIAN INDUSTRIAL
RELATIONS & EMPLOYMENT LAW
Author: Maimunah Aminuddin
Chapter Two
The Employment Act
and Related Acts
Malaysian Industrial Relations & 1
Employment Law
Preview
Defining who is an employee
Types of employment contract
Terms and conditions of employment
Common express terms
Implied terms
Provisions of the Employment Act
Provisions of the Children & Young Persons
(Employment) Act
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Employment Law
Employees receive protection from
employment laws
Employees are employed under a contract
of employment, aka contract of service.
Self-employed persons are not within the
scope of most employment laws.
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Employment Law
Tests to determine whether a worker
is an employee or not
The Control Test is the most commonly
applied test. Questions asked by the courts
include:
How much control is imposed by the
employer on the worker?
Who provides the tools, raw materials and
equipment needed to do the work?
How is payment made?
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Tests to determine whether a worker
is an employee or not, cont.
Are contributions made to statutory funds
such as EPF & SOCSO?
Is there a written contract, and if so, what
are its terms?
Is the worker required to comply with
organisational rules?
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Contracts of employment
A contract of employment can be:
Temporary or for an indefinite period
(permanent)
Part-time or full-time
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Terms and conditions of
employment
Express terms & conditions of
employment are usually written into:
a letter of appointment;
a company handbook; or
a collective agreement.
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Employment Law
Common express terms & conditions
Job title Wages, allowances,
bonus
Working hours Holiday and leave
entitlements
Other benefits Probationary period
Notice period Retirement age
prior to
termination of
contract Malaysian Industrial Relations & 8
Employment Law
Common express terms &
conditions, cont.
Requirement of confidentiality
Requirement to give exclusive service
Transfer
Requirement to comply with company rules
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Employment Law
Terms and conditions of service
Implied terms = obvious terms that courts assume
exist in every employment contract, including:
Employee’s obligation to work:
with due care
obediently
Faithfully
Employer’s obligation to:
Provide safe work
Maintain relationship of mutual respect
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Employment Law
Terms and Conditions of Service,
cont.
Terms and conditions must comply with the
relevant employment laws.
Terms and conditions can only be changed
by mutual consent between employer and
employee.
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The Employment Act
Coverage of Act
Employees earning not more than RM1,500
per month who:
work in the private sector, and
work in Peninsular Malaysia.
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The Employment Act, cont.
Exceptions to RM1,500 Wage Ceiling
1. Employees engaged as manual workers
2. Supervisors of manual workers
3. Employees who operate or maintain a
vehicle for transport of passengers or
goods
4. Domestic servants
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The Employment Act, cont.
Domestic Servants are NOT entitled to
the minimum benefits provided for
under the Act.
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Employment Law
Sabah & Sarawak
Employees working in Sabah or
Sarawak are protected by the:
Sabah Labour Ordinance, or the
Sarawak Labour Ordinance.
The contents of the SLOs are similar to the
Employment Act.
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Employment Law
The Employment Act - wages
Wages are defined as basic wages and all
other payments due under the contract of
service, but excluding:
Annual bonus Overtime payment
Commissions Subsistence allowance
Travelling
allowance
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Employment Law
The Employment Act – wages, cont.
Advances on wages limited to one
month’s wage unless for purpose of:
Buying land or house, or renovating a house
Buying a bicycle or car
Buying livestock
Buying shares in employer’s business
Any other purpose, requires permission from
DG of Labour.
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The Employment Act – wages, cont.
Wages must be paid at least once a month.
Wages must be paid either in cash, cheque
or direct credit to bank account.
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The Employment Act – wages, cont.
Deduction from wages strictly
controlled.
Deductions only possible without
permission from employee for:
1. Recovery of overpaid wages
2. Payments to agencies as required by law
3. Recovery of advance where no interest
imposed
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Employment Law
The Employment Act – wages, cont.
Non-payment of wages
Employees earning up to RM5,000 pm who do
not receive their wages or other payments
due, can lodge a complaint at the Department
of Labour.
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Employment Act – female employees
Women and night work
Women and underground work
Maternity protection
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Employment Act – working hours
Minimum of one rest day per week
Maximum hours per day = 8
Maximum hours per week = 48
Overtime payment required for work done
outside normal working hours
Maximum overtime per month = 108 hours
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Employment Act – leave
Public holidays – minimum of 10 per year.
Four compulsory; six more chosen by
employer.
Premium rate of pay due if employee
required to work on a public holiday.
Annual leave increases with length of
service ranging from 8-16 days.
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Employment Act – leave, cont.
Sick Leave increases with service ranging
from 14-22 days per year.
Employees only entitled to paid sick leave if
certified ill by registered medical
practitioner. (No self-certification)
If employer appoints panel doctors,
employee must use their services, failing
which only entitled to unpaid sick leave.
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Employment Act – termination
benefits
One-two years of 10 days wages for
service every year of service
More than 2 years, but 15 days wages for
less than 5 years of every year of service
service
More than 5 years of 20 days wages for
service every year of service
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Children and Young Persons
(Employment) Act
Children and Young Persons (Employment)
Act controls employment of these employees
but does not prohibit it.
Children = persons aged under 15 yrs
Young persons = persons aged 15-18 yrs
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Children and Young Persons
(Employment) Act, cont.
Hours of work of children and young
persons limited
Type of work that may be carried out by
children and young persons limited
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Review
Defining who is an employee
Types of employment contract
Terms and conditions of employment
Common express terms
Implied terms
Provisions of the Employment Act
Provisions of the Children & Young Persons
(Employment) Act
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Employment Law
