Which workers are covered by the Malaysian Employment Act?
A contract of service is an agreement whereby a person agrees to employ another as an employee and the employee agrees to serve his employer as an employee;
A contract of service can be either oral or writing; The worker has the right to get and keep a copy of the contract of service (or employment agreement)
Are Migrant Workers covered by the Employment Act 1955?
Yes, Migrant workers are covered
All kind of worker rights including maximum hours of work, overtime work and rates of payment, annual leave, paid holidays, paid sick leave, wages and what employer can lawfully deduct from the wage and maternity leave and benefits.
If the worker has signed a contract with the employer, can the worker still rely on the Employment Act 1955?
Yes, he can. If the rights contained in the Employment Act is better that what is provided in the contract, then the workers must be given the better rights. If the rights in the contract are better than what is in the Employment Act, then the worker can claim those better rights in the contract.
What is the meaning of "normal hours of work"?
“Normal hours of work” means the hours of work as agreed between an employer and an employee in the contract of service to be the usual hours of work per day. The normal hours of work should not exceed :
i. 8 hours a day excluding a period of rest;
ii. 5 consecutive hours of work without a period of rest of not less than thirty minutes; and
iii. 48 hours in a week.
Upon mutual agreement, hours of work can exceed 9 hours a day but it cannot exceed 48 hours in a week. What does it mean by ‘overtime’? Overtime means the hours of work carried out in excess of the normal hours of work per day.
At what rate should an employee who work overtime be paid?
Overtime rate should not be less than the following:
On normal day, 1 1/2 times the hourly rate of pay.
On rest days, 1 1/2 times the hourly rate of pay on a rest day.
On public holiday's , 1 1/2 times the hourly rate of pay on a public holiday
Is there any restriction on the overtime hours that an employee could work in one month?
An employee should not be required to work overtime exceeding a total of 104 hours in a month.
Is it compulsory for a contract of service to specify a wage period? What should be the length of the wage period?
A contract of service shall specify a wage period not exceeding one month. If the contract does not specify this, the wage period would be deemed to be one month.
When should wages be paid to employees?
Wages (less any lawful deductions) are payable not later than the seventh day after the end of wage period.
The employer may apply for extension of payment of wages time from the Director General of Labour Department.
What are lawful deductions?
These are only those that are permitted in law like the Employees Provident Fund (EPF/KWSP) and SOCSO. The Employment Act also allows for deductions to the extent of any overpayment of wages made during the immediately preceding three months, deductions for the recovery of advances of wages not more than 1 months wages.
What is the total amount of lawful deductions allowed by law?
The total of any amounts deducted under this section from the wages of an employee in respect of any one month shall not exceed half the wages earned by that employee in that month. The employee must receive at least half monthly wages.
When should wages be paid to an employee upon a normal termination of contract of service?
Wages should be paid to an employee not later than the day when the contract of service is terminated.
What are the types of work that women are prohibited from doing under the Act?
The types of work that women are prohibited are: underground work, industrial and agricultural undertaking between 10.00 pm – 5.00 am without exemption from the Director General of Labour.
How many rest days should an employee be entitled to under the Act?
An employee should be entitled to one whole day of rest day in each week.
Is it lawful for an employer to require his employee to work on a rest day?
An employee can be required by his employer to work on a rest day under the following circumstances:
accident, actual or threatened in the workplace;
work which is essential to the life of the community;
work which is essential to the defence or security of the country;
urgent work need to be done to the machinery or plant;
an interruption of work which was impossible to foresee;
work to be performed by employees in any industrial undertaking essential to the economy of
any essential service as defined in the Industrial Relations Act 1967.
How should an employee who is required to work on a rest day be paid?
An employee who is required to work on a rest day shall be paid one additional day wages at his ordinary rate of pay. (i.e. 2 times normal wages)
How many paid holidays should an employee be entitled to in one year?
An employee should be entitled to paid holidays of not less than 10 days in a year. The 10 paid Public Holidays are Workers Day (May 1), King's Birthday, Independence Day (August 31), State Sultan's Birthday or Federal Territory Day, and 6 other public holidays that the employer must choose and inform the workers by notice by the start of the year.
How should an employees who are required to work on holidays be paid?
An employee who is required to work on holiday shall be paid two additional days wages at his ordinary rate of pay. (i.e. 3 times normal wages)
How many days of paid annual leave should an employee be entitled to?
Less than two years of service: 8 days per year
Two or more but less than 5 years of service: 12 days per year
Over five years of service:- 16 days per year
Where an employee who is on paid annual leave becomes entitled to sick leave or maternity leave while on such annual leave, the employee shall be granted the sick leave or the maternity leave, as the case may be, and the annual leave shall be deemed to have not been taken in respect of the days for which sick leave or maternity leave is so granted.
How many days of paid sick leave is an employee entitled to in one year?
Paid sick leave per calendar year:
Less than two years of service
Two or more but less than five years of service
Over five years of service
Where hospitalisation is necessary
up to 60 days
What are the circumstances under which an employee is not entitled to sick leave pay?
An employee is not entitled to paid sick leave during maternity leave or for any period during which he/she is receiving periodical payments under Workmen's Compensation or SOCSO.
Under what circumstances is a contract of service deemed to be broken by an employee?
A contract of service is deemed to be broken by an employee if the worker has been continuously absent from work for more than two consecutive working days without prior leave from the employer, unless the worker has a reasonable excuse for such absence and has informed or attempted to inform the employer of such excuse prior to or at the earliest opportunity during such absence.
Under what circumstances is a contract of service deemed to be broken by an employer?
A contract of service is deemed to be broken by an employer if an employer fails to pay wages within seven days after the wages period.
Can an employer terminate a local worker and then employ a migrant worker?
No, the employer cannot terminate the contract of service of a local worker for the purpose of employing a migrant worker. (section 60M)
Can the employer treat migrant workers and local worker differently?
No, they cannot. The law says if a local employee is being discriminated against in relation to a foreign employee, or if a foreign employee is being discriminated against in relation to a local employee, by the employer in respect of the terms and conditions of employment, then the worker can complain to Labour office.
When it comes to retrenchment, who will be terminated first?
Generally, it is the worker who is last to be employed who will be first to be terminated.
Generally, it is the worker who is last to be employed who will be first to be terminated.
However, when it comes to migrant workers, section 60N of the Employment Act states that, "Where an employer is required to reduce his workforce by reason of redundancy necessitating the retrenchment of any number of employees, the employer shall not terminate the services of a local employee unless he has first terminated the services of all foreign employees employed by him in a capacity similar to that of the local employee."
We say that this is unjust, and also goes against Malaysian Federal Constitution, which guarantees equality. We say this law is bad and invalid.
What is the regulation made pursuant to the Act that provides for the entitlement of termination and lay-off benefits?
The Employment (Termination and Lay-off Benefits) Regulations 1980
NOTE:- This pamphlet contains the basic law, and it is best to refer to the Employment Act 1955 (Akta Kerja 1955) for the exact wording.
Workers can also go to the Labour office to get advice and assistance.
Assistance can also be obtained from the Bar Council Legal Aid Centres and also the Malaysian Trade Union Congress (MTUC)
* This pamphlet is a result of a collaboration between Workers Hub For Change (WH4C), Burma Campaign,