Employment Law In Malaysia An Overview and Recent Updates

MRCA Event

Employment Law In Malaysia: An Overview And Recent Updates

Ting Lee Ping, Legal Assistant at RingoLow & Associates and Dr A endi Dahlan, Council Member of MRCA explained about the statutory rights under the Employment Act (EA) 1955, the issue of termination of employment, retrenchment and vaccination of employees.

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haring his perspectives from the employer angle, Ting explained that there are various sources of employment law in Malaysia, with one of the main sources being the Employment Act 1955.

EMPLOYEES COVERED BY THE EMPLOYMENT ACT

Ting says that workers earning less than RM2,000 are covered under the EA. He adds that there are categories of workers that may be earning more than RM2,000 who are also covered under the EA, due to their nature of work which encompasses various functions. As for employees who are not covered under the EA, the employment relationship is determined by the terms and conditions in the employment contract between the employer and employee.

WAGES

Under Section 2 of the EA, “wages” means basic wages and all other payments in cash payable to an employee for work done in respect of his contract of service but does not include accommodation, food, fuel, medical attention, EPF, travelling allowance, work-incurred expenses, gratuity or bonuses. Section 18 states that the wage period stated in the employment contract cannot exceed one month, meaning wages has to be paid every month.

Section 19 states that every employer has to ensure that wages are paid, not later than the seventh day of the following month. Meanwhile, Section 37(d)(ii) of the EA states that female employees are entitled to 60 consecutive days of paid maternity leave.

REST DAYS

Where rest days are concerned, Section 59 provides clear directives that state employees are entitled to at least 1 day of rest per week. Employees cannot be ordered to work on a rest day, except if an accident happens at work, or if the employee performs work that is essential to the life of the community, or if there is urgent maintenance required on the employer’s machinery or plant.

WORK HOURS

Ting explains that work hours are clari ed under Section 60A(1), whereby employees are not required to work more than ve consecutive hours without a period of rest of not less than 30 minutes. The EA also states that employees are not required to work more than 8 hours in one day, or in excess of a spread over a period of 10 hours per day. They are also not required to work more than 48 hours in one week.

ANNUAL LEAVE AND SICK LEAVE

Section 60E clari es annual leave, whereby employees are entitled to paid annual leave and the minimum days are set as follows. (Table 1)

Ting explains that employees can convert annual leave into sick leave in the event he falls sick on his annual leave, while women can also convert their annual leave into maternity leave. He adds that if the employee has not taken his annual leave yet but has been

terminated, the employer must pay wages in lieu of the leave unless the employee has been dismissed for misconduct. If the employee has not completed 12 months of service, the employee is entitled to the annual leave in proportion to his months of service.

As for sick leave, Section 60F states that the amount of paid sick leave for an employee is limited to the length of service as follows. (Table 2)

The law states that for employees to enjoy sick leave, they are required to produce a medical certi cate (MC) from a registered medical practitioner or dentist which certi es that the employee is not t for work.

PUBLIC HOLIDAYS

Section 60D states that if a public holiday falls on an employee’s rest day, the following working day will be a public holiday; and if the employee is on sick leave on a public holiday, the employer is required to provide a substitute holiday to the employee. (Table 3)

TERMINATION

According to Ting, a notice of termination can be given by either the employer or employee to end the employment contract, subjected to the employment contract. Section 12 provides the basic guidelines as follows. (Table 4)

Employees who breach their obligations to the employer can be terminated for misconduct. Misconduct can even take place outside of the working hours, such as negatively impacting the reputation of the employer. Misconduct is to be managed with disciplinary action that includes imposing penalties, and must only be based on hard evidence and not suspicion or ‘gut feeling’.

Table 1: Annual Leave Year(s) of Service

1-2 2-5 More than 5

Days of paid annual leave

8 12 16

Table 2: Sick Leave Year(s) of Service

Available days of sick leave

Less than 2 years 14 More than 2, less than 5 years 18 More than 5 years 22 Where hospitalisation is necessary Up to 60 days (inclusive of the paid sick leave entitlement)

Table 3: Payment of overtime work

Ting explains that overtime work is to be paid as follows: Normal working days 1 ½ times the hourly rate of the day Rest Day 2 times the hourly rate of pay

Public Holidays 3 times the hourly rate of pay

RETRENCHMENT

Ting elaborates that the Industrial Courts have mentioned that it is the right of the employer to decide on the size of the business. As long as the retrenchment is genuine, the Industrial Court will not interfere.

The EA and Employment Regulations 1980 states that employees earning RM2,000 and below are compensated as follows. (Table 5)

VACCINATION

In Malaysia, there are no laws that mandate vaccination in the workplace. However, Ting advises that this does not prevent employers from enforcing the vaccination agenda because the Occupational Safety and Health Act 1994 (OSHA 94) imposes an obligation on the employer to take all necessary measures to ensure a safe and healthy working environment for all employees. On the question of whether employers can terminate employees who refuse to take the vaccine, Ting advises that there is no current reported case that provides employers the right to terminate for that reason.

Table 4: Termination Year(s) of Service

Duration of Notice

Less than 2 years 4 weeks More than 2, less than 5 6 weeks More than 5 8 weeks

Table 5: Notice of Retrenchment Year(s) of Service Duration of Notice

Less than 2 years 4 weeks More than 2, less than 5 6 weeks More than 5 8 weeks