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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  d ays  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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