EMPLOYMENT ACT

1955 (ACT 265) &

REGULATIONS
JABATAN TENAGA KERJA
INTRODUCTION
 An Act enforced by Labour Department
Peninsular Malaysia (Ministry of Human
Resources);
 Shall apply to Peninsular Malaysia only
(including Labuan);
 Regulates the relationship between an employer
and an employee; and
 Provides for the minimum requirements and
benefits.
WHO ARE COVERED BY THE ACT?
(SECTION 2 & FIRST SCHEDULE)
Category I

Any person, irrespective of his occupation, who

has entered into a contract of service with an
employer under which such a person’s wages do
not exceed RM2,000.00 a month.
DEFINITION OF EMPLOYEE
Category 2
Any person who, irrespective of the amount
of wages he earns in a month,:
(1) is engaged in manual labour
(2) is engaged in the operation of any
mechanically propelled vehicle
(3) he supervises or oversees other
employees
engaged in manual labour
(4) is engaged in any capacity in any vessel
(5) is engaged as a domestic servant
“WAGES” FOR THE PURPOSE OF
FIRST SCHEDULE
“wages” means wages as defined in
section 2, but shall not include:
- commission
- subsistence allowance
- overtime payment
EMPLOYEE COVERED BY THE
EMPLOYMENT ACT 1955
 Malaysian, permanent resident or foreign
workers;
 Full-time or part-time;
 Permanent or temporary;
 “Contract worker” (fixed-term);
 Monthly rate, daily rate or hourly rate;
 Piece-rated or task work;
 Confirm or under probation.
SECTION 69B
 ..the powers of the Director General under
section 69(1)(a) shall extend to employees whose
wages exceed 2,000 ringgit but does not exceed
5,000 ringgit.
 ..only to inquire and decide dispute in respect of
wages or any other payments in cash due under
the term and contract of service
DEFINITION OF WAGES
SECTION 2
 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:
a) the value of accommodation, or the supply of
food, fuel, light, or water or medical
attendance…;
b) Any contribution paid by the employer..
NOTICE OF TERMINATION -
SEC.12(2)
Without contract of service in writing or in the
absence such provision the length of notice
shall not be less than:
a. 4 weeks if employed less than 2 years
b. 6 weeks if employed for 2 years but less than 5
years
c. 8 weeks if employed for 5 years or more
Either party may terminate contract
without notice by paying indemnity.
(Sec. 13)
TERMINATION OF CONTRACT FOR
SPECIAL REASONS. (SEC.14)
 An employer may, on the grounds of
misconduct inconsistent with fulfilment
of the express or implied conditions of
his service, after due inquiry –
a) dismiss without notice
b) downgrade the employee; or
c) impose any other punishment – if the
punishment is suspension without
wages, the period shall not exceed 2
weeks
PAYMENT OF WAGES
(SECTIONS 18 – 21)
 Not later than the 7th day after the last day of
wage period
 OT, work on rest day & public holiday shall be
paid latest on the last day of the next wage
period
 On application, employer may be permitted to
extend the time of payment
 Upon normal termination wages shall be paid
not later than the last day of service
 When an employee terminates his contract
without notice wages shall be paid not later
than the 3rd day after the termination
LAWFUL DEDUCTIONS
(a) For any overpayment made during the
preceding 3 months by the employer’s mistake
(b) For indemnity due to employer-sec.13(1)
(c) For recovery of advance under sec.22, provided
no interest is charged
(d) Deductions authorized by any other written
law
DEDUCTIONS AT THE REQUEST IN
WRITING OF THE EMPLOYEE
(a) Payments to trade unions or cooperative
(b) Payments for shares of the employer’s business
purchased by the employee.

(Employers must keep records of the written

request for deductions)
DEDUCTIONS AT THE REQUEST OF
EMPLOYEE AND WITH PERMIT.
(a) For any schemes for the benefit of the
employee
(b) For repayment of advance where
interest is charged
(c) For payments to a third party on behalf
of the employee
(d) For payments of goods of the employer’s
business purchased by the employee
(e) For rental of accommodation, food,
meals provided by the employer.
LIMIT OF DEDUCTIONS
 The total amounts deducted shall not exceed
50% of the wages earned
 This limitation shall not apply to –
(a) Deductions from the indemnity due to the
employer
(b) Deductions from the final payment on the
termination of service
(c) Repayment of housing loan, subject to
additional 25% with permit.
PAYMENT OF WAGES THROUGH BANK
(SEC.25)
 Section 25 requires wages to be paid through
payment into an account
 Section 25A allows wages to be paid in cash
(legal tender) with employee’s written request
 Payment of wages to a domestic servant in cash
must be with the approval from the Director
General of Labour.
HOURS OF WORK (SEC.60A)
 An employee shall not be required under his
contract of service to work
(a) more than 5 hours without a break of at least
30 minutes
(b) more than 8 hours in one day
(c) in excess of a spread over period of ten hours in
one day
(d) More than 48 hours in one week.
EXCEPTION TO SEC. 60A(1)
 Ifwork must be carried out continuously,
employee may be required to work 8
consecutive hours but with at least 45
minutes break in aggregate
 May work more than 8 hrs in one day if
work on one or more days of the week is
less than 8 hrs. subject to a maximum of 9
hrs. in one day or 48 hrs per week.
 Employer may apply for permit for work
in excess of the limit under sec.60A (1)
SPECIAL CASE - 60A(2)
 An employee may be required to work in
excess of limit under sec. 60A(1) and to
work on rest day in case of:
(a) accident
(b) work essential to life of the community
(c) work essential to security of Malaysia
(d) urgent work to be done to machinery
(e) unforeseen interruption of work
(f) work performed in industry essential to
economy of Malaysia /essential service
12 HOURS LIMIT & INACTIVE
EMPLOYMENT
 Sec.60A(7) – Except in circumstances in
subsection (2)(a)-(e) no employer shall require
any employee under any circumstances to work
more than 12 hours in one day.
 Sec.60A(8) – This section shall not apply to
employees engaged in work involves long hours of
inactive or stand-by employment
SPECIFIC MEANING
 “hours of work” means the time during which an
employee is at the disposal of the employer and is
not free…
 “normal hours of work” means the number of
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 and such hours
shall not exceed the limit in subsection (1)
SPREAD OVER PERIOD OF TEN HOURS
 “a period of ten consecutive hours to be reckoned
from the time the employee commences work for
the day, inclusive of any periods of leisure, rest or
break within such period of ten consecutive
hours”
 “the whole period beginning from the time the
said spread over period ends up to the time that
the employee ceases work for the day shall be
deemed to be overtime.”
SEC.60C. SHIFT WORK
“an employee engaged under his contract of service
in shift work may be required to work more than
8 hrs in any one day or more than 48 hrs in any
one week but the average number of hours
worked over any period of 3 weeks, or over any
period exceeding 3 weeks as may be approved by
the DG, shall not exceed 48 per week.”
However the limit for one day is 12 hours.
OVERTIME WORK
 “overtime” means the number of hours of work
carried out in excess of normal hours of work per
day
 OT on a normal working day… 1.5

 OT on a rest day… 2.0

 OT on a public holiday … 3.0

 Payment is based on hourly rate of pay

 Limit of OT in a month – 104 hours

REST DAY (SEC.59)
 Employee shall be allowed one whole day as a
rest day every week
 If more than one rest day in a week, the last of
such rest days shall be the rest day
 Not applicable during maternity leave, sick leave,
temporary disablement
 Rest day for shift work – at least 30 hours
REST DAY
 Rest day may be given on any other day of the
month (with permit)
 Schedule of rest day shall be prepared before the
beginning of the month
 If rest day is fixed on the same day each week, a
notice informing the employee is sufficient
 Record of rest day shall be kept for at least 6
years
WORK ON REST DAY
 Except as provided in sec. 60A(2), no employee
shall be compelled to work on a rest day unless
the work is carried out continuously by 2 or more
shifts
 Work done in excess of normal hours of work on a
rest day shall be paid at least two times his
hourly rate of pay
RATE FOR WORK ON REST DAY
Condition Monthly Rate of Daily Rate of
Pay Pay
Not more than Half the 1 day’s pay
half the normal ordinary rate of
hours of work pay
More than half One day’s pay 2 days’ pay
but does not
exceed normal
hours of work
PAID PUBLIC HOLIDAYS (SEC.60D)
 At least 11 days of the gazetted public
holiday
 To add any day declared under section 8
of the Holidays Act (may be substituted)
 Shall include National Day, Malaysia
Day, Agong Birthday, Sultan Birth Day &
Workers’ Day
 If fall on rest, the next day is considered
as the public holiday
 The remaining 6 days may be substituted
but must be with agreement by employer
and employee
PUBLIC HOLIDAYS
 Shall exhibit list of paid holidays before
the beginning of each calendar year
 Shall grant other day if employee is on
sick leave, annual leave, temporary
disablement
 Employee shall not be entitled for holiday
pay if absent before or after the holiday
 Employee may be required to work on
public holiday with 2 days’ wages and
shall be entitled to travelling allowance if
payable under contract of service
ANNUAL LEAVE (60E)

Length of Service Minimum Entitlement

for each year of
service
Less than 2 years 8 days

2 years but less than 5 12 days

years
5 years or more 16 days
CAN EMPLOYEE BE FORCED TO
TAKE LEAVE?
 Employees cannot be forced to take leave for the
purpose of shutdown unless this is a term in the
contract.
 Employees can take annual leave as and when
they wish to take it, however this must be with
the employer’s permission.
SICK LEAVE (60F)
Length of Service Entitlement for each
calendar year
Less than 2 years 14 days

2 years but less than 5 18 days

years
5 years or more 22 days
SICK LEAVE
 Employer shall pay for examination expenses
 May accept MC issued by panel doctor only
unless in certain circumstances
 Hospitalization + sick leave = 60 days

 Employee also entitle for paid sick leave issued

by a dental surgeon
 MC must be informed within 48 hours
MATERNITY LEAVE (SEC.37)
 Maternity leave – 60 days for every
confinement
 Maternity allowance – subject to certain
conditions
 Confinement – parturition resulting after
at least 22 weeks of pregnancy..
 If no longer entitle for maternity
allowance, may commence work during
eligible period with employer’s consent
and certified fit to work by a registered
medical practitioner
MATERNITY LEAVE
 Shall not commence earlier than 30 days
before confinement or later than day after
confinement
 Employer may require female employee to
commence maternity leave within 14 days
before confinement as determined by medical
officer or panel doctor
 Any employer who dismisses employee
during maternity leave commits an offence
 Maternity protection is applicable to all
female employee irrespective of her wages.
(sec. 44A)
MATERNITY ALLOWANCE
 Has been employed at any time in the four
months before confinement
 Has been employed not less than 90 days during
the 9 months before confinement
 Has less than 5 surviving children at the time of
confinement
 If about to leave her employment, she has to
notify her employer of her pregnancy
PROHIBITION OF NIGHT WORK
 Sec.4 : Except in accordance with regulations
made under this Act or any exemption granted
under the proviso to this subsection no employer
shall require any female employee to work in any
industrial or agricultural undertaking between
the hours of 10.00 pm and
5.00 am (may apply for exemption)
EMPLOYMENT OF FOREIGN
EMPLOYEES
 60K – Employer who employs a foreign employee
shall, within 14 days furnish to the Labour Dept.
particulars of the foreign employee (Form PA
2/98)
 60M – No employer shall terminate local
employee for the purpose of employing a foreign
employee
 60N – In case of retrenchment all foreign
employee must be terminated first
EMPLOYMENT (TERMINATION AND LAY-
OFF BENEFITS) REGULATIONS 1980

 Shall be paid to an employee who has been

employed not less than 12 months
 Shall include 2 or more periods of employment
provided that the intervening period does not
exceed 30 days
 Not applicable to part-time employee
EMPLOYEE NOT ENTITLED TO
TERMINATION BENEFITS

 Terminated due to retirement unless retirement

age is not stipulated in the contract
 Dismissed because of misconduct

 Voluntary resignation other than under section

13(2) or section 14(3)
 Contract is renewed with continuous service
AMOUNT OF TERMINATION BENEFITS
 10 days’ wages for each year of service if
employed less than 2 years
 15 days’ wages for each year of service if
employed for 2 years but less than 5 years
 20 days’ wages for each year of service if
employed for 5 years or more
 Pro-rata in respect to an incomplete year,
calculated to the nearest month
 Rate per day = 12 months wages/365 days

 Paid not later than 7 days after termination

LABOUR COURT (SECTION 69)
POWER TO INQUIRE INTO COMPLAINTS
 Employee may file claim if not paid
according to the Act or contract
 The Labour Court may inquire into and
confirm or set aside decision by employer
to dismiss an employee on the ground of
misconduct but order is limited to
payment of indemnity in lieu of notice and
other payments but not reinstatement
 Employer may file claim against employee
for indemnity in lieu of notice
SEXUAL HARASSMENT
INTERPRETATION: SECTION2(1)
 Sexual harassment means any unwanted conduct
of a sexual in nature, whether verbal or non-
verbal, visual, gestural or physical, directed at a
person which is offensive or humiliating or is a
threat to his well-being, arising out of and in the
course of his employment.
SEXUAL HARASSMENT
PART XVA
 An employer must inquire into complaint of sexual
harassment
 If employer refuses to inquire into the complaint he
must inform the complainant about the refusal and
reasons for it in writing within 30 days
 If case is proven and is against an employee, employer
must take disciplinary action.
 If case is against an employer who is a sole proprietor,
the DG of Labour shall inquire into the complaint and
if proven complainant may resign without notice and
file claims as if he is terminated.
THANK YOU