1. Chapter Two The Employment Act and Related Acts
MALAYSIAN INDUSTRIAL RELATIONS & EMPLOYMENT LAW Author: Maimunah Aminuddin
Chapter Two
The Employment Act and Related Acts
Malaysian Industrial Relations & Employment Law

2. Malaysian Industrial Relations & 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
Malaysian Industrial Relations & Employment Law

3. 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.
Malaysian Industrial Relations & Employment Law

4. 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?
Malaysian Industrial Relations & Employment Law

5. 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?
Malaysian Industrial Relations & Employment Law

6. Contracts of employment
A contract of employment can be:
Temporary or for an indefinite period (permanent)
Part-time or full-time
Malaysian Industrial Relations & Employment Law

7. 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.
Malaysian Industrial Relations & Employment Law

8. Common express terms & conditions
Job title
Wages, allowances,
bonus
Working hours
Holiday and leave
entitlements
Other benefits
Probationary period
Notice period
prior to
termination of
contract
Retirement age
Malaysian Industrial Relations & Employment Law

9. Common express terms & conditions, cont.
Requirement of confidentiality
Requirement to give exclusive service
Transfer
Requirement to comply with company rules
Malaysian Industrial Relations & Employment Law

10. 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
Malaysian Industrial Relations & Employment Law

11. 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.
Malaysian Industrial Relations & Employment Law

12. Malaysian Industrial Relations & Employment Law
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.
Malaysian Industrial Relations & Employment Law

13. The Employment Act, cont.
Exceptions to RM1,500 Wage Ceiling
Employees engaged as manual workers
Supervisors of manual workers
Employees who operate or maintain a vehicle for transport of passengers or goods
Domestic servants
Malaysian Industrial Relations & Employment Law

14. The Employment Act, cont.
Domestic Servants are NOT entitled to
the minimum benefits provided for
under the Act.
Malaysian Industrial Relations & Employment Law

15. Malaysian Industrial Relations & 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.
Malaysian Industrial Relations & Employment Law

16. 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
Malaysian Industrial Relations & Employment Law

17. 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.
Malaysian Industrial Relations & Employment Law

18. 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.
Malaysian Industrial Relations & Employment Law

19. The Employment Act – wages, cont.
Deduction from wages strictly
controlled.
Deductions only possible without permission from employee for:
Recovery of overpaid wages
Payments to agencies as required by law
Recovery of advance where no interest imposed
Malaysian Industrial Relations & Employment Law

20. 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.
Malaysian Industrial Relations & Employment Law

21. Employment Act – female employees
Women and night work
Women and underground work
Maternity protection
Malaysian Industrial Relations & Employment Law

22. 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
Malaysian Industrial Relations & Employment Law

23. Malaysian Industrial Relations & Employment Law
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.
Malaysian Industrial Relations & Employment Law

24. Employment Act – leave, cont.
Sick Leave increases with service ranging from 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.
Malaysian Industrial Relations & Employment Law

25. Employment Act – termination benefits
One-two years of service
10 days wages for every year of service
More than 2 years, but less than 5 years of service
15 days wages for every year of service
More than 5 years of service
20 days wages for every year of service
Malaysian Industrial Relations & Employment Law

26. Children and Young Persons (Employment) Act
Act controls employment of these employees
but does not prohibit it.
Children = persons aged under 15 yrs
Young persons = persons aged yrs
Malaysian Industrial Relations & Employment Law

27. 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
Malaysian Industrial Relations & Employment Law

28. Malaysian Industrial Relations & Employment Law
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
Malaysian Industrial Relations & Employment Law