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Employment Act 1955 About Employment Act 1955 Employment Act 1955: Relevant Sections Contract of Service Payment & Deduction of Wages Employment of Women Rest Day, Hours of Work, Shift Work, Leave & Holiday

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The Act doesnt
apply to all
employees in
Malaysia

MALAYSIA
EMPLOYMENT ACT 1955
DEFINITION OF "EMPLOYEE" COVERED
UNDER THE SCOPE OF THE ACT:
1. You are covered based on wages, irregardless of nature of work
i.e. employees earning RM2,OOO and below; OR
2. Employees engaged in manual labour irrespective of the wages
they earn in a month.

WHO ARE COVERED Employees Foreign Workers Employees under probation Apprentices

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Part Section II Contracts of Service III Payment of Wages IV Deductions  from Wages V Relating to the Truck System VIII Employment of Women IX Maternity Protection XIII Rest Days, Hours of Work, Holidays and Other Conditions  of Service

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Contract of Service refers to any agreement, whether oral or in writing and whether express or implied, whereby one person agrees to employ another as an employee and that other agrees to serve his employer as an employee and includes an apprenticeship contract  (Section 2(1)) Contract of Service shall not contain any condition that restricts rights of employees to join, participate in or organize trade unions  (Section 8) .  A contract of service must contain a provision for its termination  (Section 10) Contract of Service may be terminated for special reasons as such misconduct on the part of employee  (Section 14(1)) Contract of Service may be terminated without notice  (Section 13) .

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Contract of Service shall specify a wage period not exceeding one month  (Section 18 (1)) Wages shall be paid to each of employees not later than 7 th  day after the last day of any wage period  (Section 19) Payment of Wages less lawful deductions, on normal termination of contract shall be paid to employee not later than the day on which such contract of service so terminates  (Section 20) .  Payment of Wages less lawful deductions, on termination of contract in special circumstances shall be paid by the employer to employee not later than the day on which such contract of service is so terminated  (Section 21(1)). Wages shall not become payable to or recoverable by any employee from his employer for imprisonment & court cases otherwise than as a witness on his employer’s behalf  (Section 23)

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No deductions shall be made by an employer from the wages of an employee  (Section 24(1)) However it shall be lawful for an employer to make following deduction  (Section 24(2)) Deduction to the extent of any overpayment of wages (immediately preceding 3 months) Deduction for the indemnity due to the employer by the employer under Section 13(1) Deductions for the recovery of advances of wages made under section 22 Deduction authorized by any other written law Deduction that should not be made except request in writing by employees  (Section 24(3)) Deduction of the payments to a registered trade union or cooperative and loan society Deductions in respect of payments for any shares of the employer’s  business Deduction that should not be made except at the request in writing of the employee and with the prior permission in writing of the Director General of Labor Department  (Section 24(4)) 1. Superannuation scheme; 2. Employer’s welfare scheme; 3. Insurance scheme; 4. Advances of wages; 5. Payments to a 3 rd  party; 6. Purchase by the employee of any goods of the employer’s business; 7. Rental for accommodation and the cost of services, 8. food and meals provided by the employer to the employee or under terms of the employee’s contract of service.

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All female employees are governed by  Section 34  of the Employment Act 1955 No female is allowed to work in any industrial or agricultural venture between 10 pm to 5 am No female employee shall commence work without having a period of 11 hours free of work 								 Only with the approval of the Minister of Human Resource (Then they can work during those hours) 								(Section 34(1)) No female allowed to be employed in any underground undertaking  (Section 35)

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Employee shall be allowed in each week a Rest Day of one whole day as may be determined from time to time by the Employer  (Section 59(1)) Overtime Rate for Working during Rest Day  (Section 60)(3)(b)) Does not exceed half his normal hours of work, wages equivalent to  half the ordinary rate of pay  for work done on that day > half but does not exceed his normal hours of work,  1 day wage at the ordinary rate  of pay for work done on that day For any work carried out in excess of normal hours, the employee shall be paid at a rate which is not less than  2 times his hourly rate of pay  (Section 60(3)©)

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Employee not required under his contract of service to work > 5 consecutive hours without a period of leisure of not less than 30 minutes > 8 hours in one day In excess of a spread over a period of 10 hours in one day > 48 hours in one week 					 (Section 60(A)(1))   ‘Overtime’ refers to hours of work in excess of the normal hours of work  ( Section 60(A)(3)(b))   ‘Normal hours of work’ refers to hours work as agreed as in the contract  (Section 60(A)(3)©)    ‘Ordinary Rate of Pay’ refers to wages as defined which an employee is entitled to receive under his contract of service for the normal hours of work but does not include overtime payment on a rest day or a public holiday  (Section 60(I)(1)(A)

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‘Shift Work’ defined as work which by reason of its nature requires to be carried on continuously or continually as the case may be by two (2) or more shifts  (Section 2(1)) Employee who is engaged under his contract of service in shift work may be required by his employer to work > 48 hours in any one day or > than 48 hours in any one week Average hours worked over any period of 3 weeks, or over any period exceeding 3 weeks as may be approved by the Director General, shall not exceed 48 per week (Section 60©(1))

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Employee shall be entitled to a paid holiday at his ordinary rate of pay  (Section 60(D)) ‘Week Holiday’ defined as Sunday or in States where Friday is observed as the weekly holiday Friday Category of Compulsory Public Holiday  (Section 60(D)(1)(a)) National Day Birthday of the Yang Di  Pertuan   Agong Birthday of the Ruler or Yang Di  Pertua   Negeri Workers Day Malaysia Day Any employee who absents from work on the working day immediately preceding a public holiday therefore under this section without the prior consent of his employer shall not be entitled to any holiday pay. Employee on a monthly rate of pay shall be deemed to have received his holiday pay Monthly rate employee will entitled for paid holiday will be paid 2 days wages at the ordinary rate of pay Employee shall be paid at a rate which is not less than 3 times his hourly rate of pay for any overtime work carried out on a paid public holiday

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Annual Leave entitlement list for employees as follows: 8 days for every 12 months of continuous service 12 days for every 12 months of continuous service 16 days for every 12 months of continuous service If employee has not completed 12 months of continuous service with the same employer.  The Annual Leave shall be proportionate to the number of completed  months of service (Section 60(E)(1)) Employee entitle to paid sick leave (where no hospitalization is necessary) as follows: 14 days per year where employee has been employed for less than 2 years 18 days in a year where employee has been employed > 2 years but < 5 years 22 days in a year where employee has been employed for > 5 years (Section 60(F)(1)(aa) Maternity Leave is a special entitlement only for female employee Condition must be married  Female employee entitled to the Leave for a period not < 60 consecutive days  (Section 37(1)(a)) The leave cannot < 30 days than the confinement or > the day immediately the confinement  (Section 37(1)(b)

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Frequent Asked Questioned (FAQ) – Hours of Work

Can workers work more than twelve hour per day? When? Yes. Only on circumstances allowed under the law.  The law provides for a maximum of forty eight hour a week? Does this include meal breaks? The meal-break can be excluded from the forty eight hours of work per week. An employee works 16 hours from 8 am to 12 am and is paid overtime for 8 hours. You allow him to come in to work late on the next day, say at 10 am. Would you pay him for the period of excused absence from 8 am to 10 am? He cannot work > 12 hours. Yes we need to pay. Are the following working hours correct 7.30 am to 1.00 pm (Morning), 1.00 pm to 2.00 pm (lunch break) 2.00 pm to 5.30 pm (afternoon)? No We have a practice where we sometimes close our production line and will in those  circumstanes  ask the direct labor employee to go back to work without salary. These employees are hired through an employment agency. The assumption here is that we are not liable for any additional compensation since the employees are the employment agency’s employees. Is this practice correct? This assumption is correct

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Frequent Asked Questioned (FAQ) – Annual Leave

1. Can Annual Leave be taken on completion of one year continuous service? Yes 2. Can the employee refuse to take annual leave as scheduled by his supervisor? Yes 3. Can the employer pay-in-lieu of annual leave instead of actually giving the time-off to employee? Yes 4. If the employee applies for annual leave but is absent without obtaining the approval of his supervisor, is the company obliged to approve such leave? No 5. Is an employee entitled to paid annual leave after four months service? No 6. When does an employee lose his earned leave?  7. After one year and six months of service, an employee has given his employer one month’s notice to terminate his employment. During his service, the employee did not take annual leave. Can this employee take his annual leave during the notice period? Yes 8. Once an employee submits his annual leave form, can he consider it approved? No 9. If our employees do not apply leave but accumulated their leave can they now ask for pay back? Is this practice acceptable? No 10. Can we compel our staff to go on annual leave during this movement control order period? No

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Frequent Asked Questioned (FAQ) – Sick Leave

1.  Is employee can simply take sick leave up to sixty days in a calendar year? No 2. Janet is on sick leave for a period of five days and two of these days fall during public holidays. Does her company have to grant two additional days as paid holidays in substitute for her sick leave? No 3. Tuesday is a public holiday and my employees have a tendency to take Monday off as sick leave so that they can enjoy a long break from work. Is there anything my organization can do to prevent this from happening? For instance, can we refuse to accept their medical certificates and deduct this leave from their annual leave entitlement? No, you can’t. 4. If a medical certificate is produced from a non-panel doctors, can we refuse the MC? Yes 5. Can sick leave be prorated in a year? No 6. An employee obtained a medical leave for ten days commencing from Monday to Wednesday (the following week). In deducting this from his medical leave, entitlement, are we expected to deduct ten days or eight days (Saturday and Sunday are off days)? Eight days 7. A staff member called his supervisor around five pm to say that he was suspected of having dengue fever and had been admitted to Hospital. Following this he returned to work with an MC from the hospital. We called the hospital to verify his MC and were told that there was no record of his admittance and that the MC was invalid. Further the attending doctor specified in the medical certificate was nit attached to the hospital. What should our next step be? Refer the case to HR department for further investigation

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