Chap 10 - Employment Law

CHAPTER 10
EMPLOYMENT LAW
Hazlin Hasan
Senior Lecturer
BA118
L1 29
011-10407440
EMPLOYMENT ROLES OF
BASIC RIGHTS OF LEGISLATION GOVERNMENT
EMPLOYEES
1) Wages
2)Probation
3) Working Hours
4) Overtime
OVERVIEW ON
5) Absence Without EMPLOYMENT TERMINATION
Permission
6) Rest Day LAW
7) Public Holidays
8) Annual Leave
9) Sick Leave
10) Payment of
Medical Bills INDIVIDUAL RETRENCHMENT
11) Notice of EMPLOYMENT
Termination CONTRACTS
6/16/2022 hazelslides/ODLOct2021-Jan2022 2
EMPLOYMENT LEGISLATION
Laws providing for basic benefits
1) Employment Act, 1955

2) Wages Council Act, 1947
3) Sabah Labor Ordinance
4) Sabah/Sarawak Labor Ordinance
5) Children and Young Persons (Employment Act), 1966
6) Workers Minimum Standards of Housing and Amenities Act, 1990
7) Weekly Holidays Act, 1950
8) Pensions Act, 1980
EMPLOYMENT LEGISLATION
Laws establishing the industrial relations framework
• Trade Union Act, 1959

• Industrial Relations Act, 1967
• Public Services Tribunal, 1977
• Social Security Laws
• EPF Act, 1991
• SOCSO Act, 1969
• Workmen’s Compensation Act, 1952
• Safety Laws
• Factories & Machinery Act, 1967
• Occupational Safety & Health Act, 1994
• Law Restricting Employers from hiring non-citizens
• Employment (Restriction) Act, 1968
• Law Relating to Training of Employees
• Human Resource Development Act, 1992
Brief outlines – Employment Act, 1955
 Lays down provisions to protect workers from exploitation.
 Provides minimum benefits for all workers covered by the Act.
 Establishes certain rights for both employers and employees.
Brief outlines – EPF Act, 1991
 Establishes a system of compulsory savings

so that employees will have money to
support themselves once they retire.
 Covers all employees and administered by
the EPF Board.
Brief outlines – Employees’ Social Security Act, 1969
 Administered by the SOCSO.

 Ensures that employees receive
compensation in case of work-related
accidents or illness.
Brief outlines – Occupational Safety & Health Act,

1994
 Establishes guidelines and lays down the responsibilities of the various
parties in industry in relation to safety and health.
Brief outlines – The Trade Union Act, 1959
 Seeks to control the activities of trade unions so that they can develop
in an orderly and peaceful manner.
 Lays down rules and regulations which unions are required to follow.
Brief outlines – The Industrial Relations Act, 1967
 Regulates the relations between employers and workmen and their

unions.
 Lays down rules to help prevent and settle disputes between the two
parties.
 Ensuring peaceful industrial relations.
ROLES OF GOVERNMENT IN INDUSTRIAL
RELATIONS
• Acts as legislator through Parliament –
drafts & presents the law.
• Administrator through the Ministry of

Human Resources – enforces the system.
• Participant as the largest employer in

the country towards the public sector
workmen – what government does have
an impact on employees.
ROLES OF GOVERNMENT: MINISTRY OF HUMAN
RESOURCES
Responsible for administering and overseeing the
industrial relations system with basic objectives
such as:
1) To protect the welfare of workers (their safety,

health & rights).
2) To promote good employer-employee
relationships through a stable & peaceful
industrial relations system.
3) To equip the unemployed with basic industrial
skills and improve the skill level of the work
force.
4) To assist in maximizing the country’s manpower
resources through manpower planning.
ROLES OF GOVERNMENT: DEPARTMENT OF
LABOR, PENINSULAR MALAYSIA
• Enforces the Employment Act,1955, the Workmen’s Compensation
Act, 1952, the Wages Councils Act, 1947, etc.
• Through the labor court, it inquires into disputes between workers &
employers over payment or non-payment of wages, allowances,
retrenchment & other benefits due to employees under their
individual contracts of employment or as required by the
employment laws.

TRADE UNION
• Gives a central role in the growth of the trade union movement.
• Has the authority to register newly formed unions, de-register
unions found breaking the law, check union’s annual accounts and
generally to investigate any specific complaints made against a
particular union.
6/16/2022 hazelslides/ODLOct2021-Jan2022 10 10
INDUSTRIAL RELATIONS
• Responsible for the functions of labor & industrial relations matters.
• Administers the Industrial Relations Act, 1967.
• Helps settle disputes between employers and employees
through conciliation.

OCCUPATIONAL SAFETY & HEALTH
• Responsible for the major task of
implementing the Occupational Safety
and Health 1994 and the Factories &
Machinery Act, 1967.
6/16/2022 hazelslides/ODLOct2021-Jan2022 11 11
ROLES OF GOVERNMENT: EMPLOYEES
PROVIDENT FUND (EPF)
• Implements the Employees

Provident Fund Act, 1991
which all employees and
employers must make
monthly contributions that
made available to employees
on their retirement.
• The purpose of the fund is to
ensure workers are not
destitute (poor, penniless)
once they retire from work.
ROLES OF GOVERNMENT: EMPLOYEES SOCIAL
SECURITY ORGANIZATION (SOCSO)
• Implements the Employees’ Social
Security Act, 1969.
• Employees’ Social Security Act is an
insurance scheme with compulsory
membership for all workers whose
wages do not exceed RM3,000 per
month.
• Provides benefits to workers and their
dependant in the event of work-related
accidents.
• Administered by the Social Security
Organization (SOCSO).
• Ensures that employees receive
compensation in case of work-related
accidents or illness.
Additional new info (not available in the manual)
ROLES OF GOVERNMENT: HUMAN RESOURCE
DEVELOPMENT CORPORATION
 Enforces the Human Resource Development Act, 1992 in order to
encourage employers to train their workers through a fund.
 Employers in certain sectors of the economy are required to
contribute 1% of their payroll to the fund every month.
 When approved training is conducted, the company concerned can
claim for reimbursement of the costs involved.
ROLES OF GOVERNMENT: INDUSTRIAL COURT

 A specialized tribunal established under the Industrial Relations Act,
1967 to arbitrate disputes between employers and employees.
 An independent body governed by the rules of the judiciary and plays
a crucial role in the Malaysian industrial relations system.
COVERAGE OF EMPLOYMENT ACT, 1955
1) Covers all employees with no age relevant.
2) Works in Peninsular Malaysia.
3) Works in private sector. Public sector employees consisting of the civil
service, statutory bodies and local authorities are exempted from the
Act.
4) Covers employee who earns not more than RM1,500 per month not
including:
a) Commission
b) Subsistence allowance
c) Overtime payment
d) Annual bonus
5) Without regard to the employee’s wages, the
worker is:
a) A manual labour – a person who works in
non-office work or has work done with the
hands.
b) Supervisors of the labor – supervisor in a
factory.
c) Drivers or mechanics of vehicles
6) Domestic servants:
a) Maid
b) Gardener
c) Cook
d) Nanny
e) Butler
7) Employee who has entered into a contract of service or contract of

employment.
8) Covers all part-timers, temporary and legally employed immigrant.
INDIVIDUAL EMPLOYMENT CONTRACTS
• An agreement by individual to work for another in return for
remuneration.
• Also known as Contract of Service or Contract of Employment.
• It could be made orally or written.
• If it is done orally, misunderstandings or disputes will likely occur,
therefore, a written contract is preferred.
• Where Employment Act is silent on a particular matter, employer and
employees are free to agree upon issue.
 e.g. The act is silent upon the minimum of wages. Therefore, both
parties are free to negotiate and agree to the minimum of wages.
 Employer is free to offer a more favorable term/benefit, e.g. giving
more annual leave, more bonuses etc.
INDIVIDUAL EMPLOYMENT CONTRACTS
• The Act requires:
1) more than one month contract of service to be in writing.
2) A clause of the manner to terminate service by either party.
3) It is illegal for employer to include a clause to restrict employees
right to organize, join and participate in registered trade union.
• Once agreed by both parties, the contract of service cannot unilaterally
be changed by either party.
• If an employer wishes to change, he needs to do with the express and
written agreement of the employees.
• If the employer does so without the employee’s agreement, employer
may face with a claim of constructive dismissal on the ground of
breach of contract.
• The employer must ensure it is legal and flexible enough to outlast
changes in working environment.
Cont..
CONTRACT OF SERVICE
 An agreement made or signed by an

individual to work for another in return for
remuneration.
 An employment contract between an employee
and an employer.
 Also known as a contract of employment.
CONTRACT FOR SERVICE
 An agreement made or signed by an

individual to provide a service to others.
 It is a self-employed agreement and it will not
be protected by the Employment Act 1955.
ESSENTIALS OF LETTER OF APPOINTMENT
• There should be TERMS IN A CONTRACT OF EMPLOYMENT
expressed terms of the 1) Job title
contract of employment. 2) Wages and details of other monetary
• If these documents are payments, i.e. Allowances and bonus
incomplete, the 3) Normal working hours
employer may not have
4) Holiday/leave
the contractual right to
take certain actions 5) Other benefits
needed to run his 6) Probationary period
business efficiently. 7) Termination notice period
8) Retirement age
9) Confidentiality requirement
10) Transfer or mobility
11) Compliance to company’s rules
12) Penalties on misconducts
BASIC RIGHTS OF EMPLOYEES
WAGES
• Maximum wage period is no longer than one month.

• An employer is free to pay more frequently (normally once or twice a
month).
• Do not need to follow calendar month.
• Payment must be paid not later than 7 days of the last day of wage
period.
• If the employer fails to do so, there is a breach of contract of service by
the employer.
• Mode of payment must be in “legal tender”, i.e. cash, cheque or direct
credit in employee’s bank account.
• If contract is terminated (either it comes to an end or employee resigns
or gives required notice of termination or employer terminates
employee), wage must be paid on employee’s last day of work.
BASIC RIGHTS OF EMPLOYEES
WAGES
• If an employee resigns without notice, any wages owing must be paid
not later than the 3rd day after the contract is terminated.
• The Act is silent on the minimum wages or the quantum of wages.
*quantum – the amount required/ desired.
• Minimum wages exist only in the Wage Council Act, 1947 for :
1) Cinema workers
2) Shop assistants
3) Hotel and catering workers
4) Penang stevedores
*it is set for RM185 per month for those over 18 years old.
• It is advisable to pay wages according market rate and experience.
PROBATION
• When an employee is first offered a job,

he/she is placed under probation
which is a trial period of employment.
• The requirement will be stated in the
offer of employment (letter) and is
intended to allow both the employer and
the employee to give each other a trial
period.
• The employer will monitor employee’s
work to see if he is capable of doing the
job for which he was hired.
• Employers may terminate the
employee’s services during the trial
period when he/she cannot perform or
turns out to be unsuitable for the job.
PROBATION
Employees may also leave the job for which they feel not suited with either
unable to cope with the work assigned or uncomfortable with the social
environment at the workplace.
The Industrial Court has made a number of ruling which are helpful to
guide employers how to treat probationers that include:
1) Dismissal during probationary period is acceptable due to
misconduct or redundancy. Appropriate procedures should be
followed.
2) Suitable training, coaching and guidance should be given so that
probationers can perform their work.
3) Performance should be monitored and appraised by the immediate
superior. Written documentary evidence should be kept to prove that
appraisal has been conducted.
4) Any unsatisfactory performance should be given once or more
warnings (preferably in writing).
PROBATION
5) If warnings have been given, after expiry period, performance is still

poor, service may be terminated at the end of probationary period.
6) If no warning has been given, the employer may extend the period of
probation by issuing a letter to the employee explaining to him
why he cannot be confirmed in his appointment at that time.
7) If at the end of the probationary period, an employee remains in service
but receives no letter of confirmation from his employer, it will be
considered that he or she is still under probation.
8) He will remain as a probationer until he or she is either confirmed
or his or her services are terminated.
9) If a probationer’s contract makes it clear that certain benefits and
privileges will only be given to the employee once he or she is
confirmed in his or her position, yet he or she receives these benefits
during his or her probationary period, he or she may deemed to be
confirmed if a dispute over the issue comes before the courts.
WORKING HOURS
The Employment Act, Section 60 sets EXCEPTION:
limits on the normal working hours for • Maximum daily
employees as agreed in the contract of working hours can be
service as follows: extended to 9 hours if
employees work for 5
• Maximum 8 hours per day (6 full days or 5 ½ days week.
per week) • Any extended break
whereby employee is
• Maximum 48 hours per week free to use the time as
• After 5 hours of work, 30 minutes break he pleases is not
considered working
(non-stop break) should be given. hours because the
break is outside
• Employees can be given earlier break but working hours.
not later than 5 hours.
• Shift workers hours can exceed 48 hours
per week, but over 3 weeks they have an
average of 48 hours.
OVERTIME (OT)
• Defined as any work done in excess

of the normal hours of work. It is to
be paid at special rates.
• As a general rule, an employee
cannot be required to work
overtime.
• They must agree to work in excess of
his normal hours of work where the
overtime is on voluntary basis.
• Maximum 12 hours per day
inclusive of overtime.
• Maximum overtime per month is 104
hours.
OVERTIME (OT)
• The Employment Act disallows employee from working more than

104 hours in any one month. Therefore, any work done on a rest day
or public holiday is not considered as overtime.
• An employee can decide whether to work overtime or not when asked
by employer, but there are a number of exception to the rule.
• When an employee has agreed to do overtime but failed to turn up, his
or her absence is considered as a misconduct and should be treated like
any other misconduct for absence.
• When an employer wishes his employee to work overtime, he should
have a system whereby the employee is requested or directed in writing
to carry out the overtime on certain dates at certain times and the
employee is required to sign his agreement to do the work.
OVERTIME
• It is for the employer to decide whether there is a need for overtime

work to be carried out. The employer cannot request employee to work
exceeding limit of time.
• If the employer wants the employee to do overtime, but does not want to
pay for the overtime, the employer should raise the wage for more than
RM1,500 per month.
• Overtime rates:
1) 1 ½ times of normal hourly rates of pay on a normal working
day.
2) 3 times the normal hourly rate on a pubic holiday.
ABSENCE WITHOUT PERMISSION
• Employment Act S15(2) states that an employee shall be deemed

(assumed) to have broken his contract of service with the employer
without prior leave from his employer when:
• He has been continuously absent from work for more than 2
consecutives working days (3 days onward, e.g. Monday-Wednesday,
Friday-Monday).
• UNLESS, he has a reasonable excuse for such absence:
1) Illness or accident of employee/ family
2) Death in the family
3) Natural disaster, i.e. flood, landslide
4) Detained by police.
• Any employee should inform or attempt to inform the employer of such
excuse prior to or at the earliest opportunity during such absence.
6/16/2022 hazelslides/ODLOct2021-Jan2022
32
ABSENCE WITHOUT PERMISSION
• An employee is NOT automatically terminated from the job, but the

employer has the right to do so with 2 conditions:
1) Employee has no reasonable excuse.
2) Employee has not/attempted to inform.
• When an employee is absent for 1 or 2 days, it is a misconduct for which

a disciplinary action can be taken.
• If the employer decide to terminate employee due to being absent for 1
or 2 days, the employer cannot claim any indemnity from the employee.
• When the above 2 conditions exist and the employee has been absent for
more than 2 consecutive working days, it is a breach of contract on the
employee’s part.
33
REST DAY
• An employee is entitled to one rest day per week.
• The employer may decide which day is the rest day (depends on the
nature of business).
• The trend is to introduce 2-day weekend break, if a 5-day work per
week:
1) 2nd day of weekend is a rest day.
2) Other day is an off-day.
• For shift workers, the rest day is a minimum of 30 hours.
REST DAY
• However, employee is NOT entitled to rest day when:
1) On maternity leave
2) Sick leave
3) Receive temporary disablement benefits
• Collect rest day is when worker will be having a 4-nonstop rest

days or more, e.g. offshore/hotel workers (on island).
• Director General of Labor Department is empowered to permit rest days
to be granted on any day of the month. Employee is entitled to know
his/her rest days roster at least 1 month in advance. Rest day
roster must be provided by the employer.
• Work on rest day:
• Under Employment Act, employee CANNOT be required to work on
rest day (where employee works on rest day, he is entitled to)
UNLESS:
REST DAY
• For monthly rated worker

1) If works on a rest day up to a ½ day work, he is entitled to ½
day’s wages (he will not only receive his normal monthly wages
but also extra pay).
2) If works more than ½ day, but not exceeding normal hours of
work, he is entitled to 1 day’s wages.
• For daily rated worker:

1) If work on a rest day, after completing the normal hours of work,
payment rate is 2X the hourly rate of pay.
2) If works < ½ of normal hours, will be paid for 1 full day wages.
3) If works between half the normal hours and the full hours, he is
entitled to2 days’ wages.
REST DAY
Example:
If a daily rated employee works on his rest day for 1 day from 9am-5pm, he
will get double wages for that day. If he works < ½ a day, i.e. from 9am-
10am, he will get one day’s wages.
Employee cannot be required to work on rest days UNLESS:

1) The job does require shift work.
2) There is an accident, actual or threatened at work.
3) Essential work to community.
4) Essential for defense/security of Malaysia.
5) Urgent work for machinery or plant.
6) Interruption of work which impossible to foresee.
7) Employed in essential services.
PUBLIC HOLIDAYS
• Employment Act grants employees a minimum of 10 public holidays,

where 4 days are mandatory:
1) National day
2) Agong’s Birthday
3) State Ruler’s Birthday
4) Labor Day
• Employer can decide the other 6 days.

• Last minutes announcement of public holiday by the government,
employees are NOT entitled, UNLESS rewarded by employers.
• Employees entitled need to be informed in advance of the public
holiday of the year.
• If a public holiday falls on workers’ rest day, the next day shall be a
paid holiday.
PUBLIC HOLIDAYS
• If an employee works 5 day week and public holiday falls on 1st of the
2nd days off, it will be the employers discretion whether to give holiday
or substitute holiday.
• It is possible to substitute any public holiday other than the compulsory
4 days for any other day in the year but must be agreed by both parties
on mutual agreement.
• If a worker is on sick leave during the public holidays, the employer
must grant another day in substitution.
• If employer require worker to work on public holiday, the worker will be
entitled for 2 days wages for the day.
• If worker is requested to work overtime on public holiday, he is to be
paid 3X of his hourly rate pay.
ANNUAL LEAVE
• Employer must decide the annual leave his worker are to be entitled to
(should be included in the written terms and conditions of employment)
• In the Act, the minimum annual leave is :
1) Less than 2 years service = 8 days
2) Between 2- 5 years = 12 days
3) More than 5 years = 16 days
• Entitled for annual leave after he/she completed 1 year’s service.
• Employee must work first, before granted a leave.
• Employees who is absent > 10% of working days in a year without
employer’s permission and without reasonable excuse shall not be
entitled to annual leave
ANNUAL LEAVE
• If employee applies for leave, but

employer DOES NOT approve, e.g. until
the end of the year, therefore, the
employee is entitled to get paid.
• The payment must be paid based on
how many days his leave is.
• Unused leave which an employee does
not use, is NOT entitled for payment.
• Leave is not carried forward or not used
will be forfeited.
• Employment Act does not entitle an
employee to carry forward annual leave.
• It is employer discretion to give
permission to carry forward annual
leave.
SICK LEAVE
• Employee is entitled to the following minimum paid sick leave per
year:
1) Less than 2 year’s service - 14 days
2) Between 2 – 5 years - 18 days
3) More than 5 years - 22 days
• To receive paid sick leave, an employee must fulfill certain conditions
imposed by the Act:
1) Must be certified unfit for work by registered medical
practitioner (including registered dentist/dental surgeon)
appointed by the employer
2) Must have a certificate from a dental surgeon.
3) If the employer has not appointed any panel doctors, certification
will have to be accepted from any registered doctor including
a medical office in a government hospital or facility.
4) Must inform the employer of his sickness within 48 hours of
commencing the sick leave.
SICK LEAVE
• However, the Employment Act
recognizes certain circumstances:
1) If an employee is not able to visit panel
doctor particularly when medical
emergency occurs or when an
employee is away from his normal
residence, therefore, in which case, the
employer must accept the medical
certificate of any registered doctor.
2) In the case of an emergency, doctor
should be requested to make a
statement to this effect on the medical
certification.
3) If an employee is hospitalized, his leave
entitlement increases up to 60 days per
year inclusive of the normal sick leave.
PAYMENT OF MEDICAL BILLS
• The law requires an employer to pay for any medical examination to
determine whether an employee is ill, and if he is, the nature of his
illness.
• The law does not seem to require the payment of medical treatment.
However, in Malaysia, normal practice to issue a single bill for
examination and treatment.
• Itemized bill could be demanded by employers but generally they pay
all medical bills presented by the employees from the panel doctors.
• To cover hospitalization charges and the more costly bills charged,
insurance coverage can be bought by the employer.
• Some employers also pay bills for their employee’s dependants.
• One way to control medical costs is by making the employer to agree to
pay up to a certain amount per year. For example, the employer
provides a policy that the employer will pay RM100 per year. If the
costs exceed the RM100, the employee will have to pay the balance.
TERMINATION
• The Employment Act provides employer and employees freely to agree
on the notice period.
• The Employment Act (Section 12) says:
“Either party to a contract of service may at any time give to the other
party notice of his intention to terminate such contract of service.”
• However, there are 2 provisions relating to notice of termination:
1) The length of the notice period required of each party must be the
same
2) The employer can decide on the notice period required and have
this agreed to in the contract of service.
• Any party which terminates a contract without giving notice – will own
an indemnity to the other party. (Indemnity – a sum of money
equivalent to the amount of wages would have been earned during the
notice period).
If Employee fails If Employer fails
1) Employer makes a 1) Employee makes a
complaint to Labor complaint to Labor
Department Department
LENGTH OF LENGTH OF
2) Employee will be 2) Employer will be
SERVICE THE NOTICE
PERIOD summoned to Labor summoned to Labor
Department Department
3) Labor Department 3) Labor Department
Less than 2 issues an order to issues an order to
4 weeks
years employee to pay employer to pay
employer employee
Between 2- 4) If still employee fails 4) If still employer fails
6 weeks to do so, employer to do so, Labor
5 years
may sue employee in Department will take
Civil Court an action to sue
More than 5 employer in Civil
8 weeks
years Court on behalf of
employee
TERMINATION
A contract of employment comes to an end because:
1) Resignation
• An employee voluntarily leave or quit (with or without notice).
• An employee must give proper notice of termination or any failure
may owe him an indemnity to employer.
2) Retirement
• An employee is required to leave as stated in the contract of
employment or when reaching the retiring age.
• No law in Malaysia requires a private sector employee to retire at any
particular age but an employer is free to include a clause relating to
the retirement age in the contract.
• If an individual employment contract is silent in relation to
retirement age, the court generally decides that an employer has no
right to terminate the contract as long as the employee is still
performing satisfactorily.
TERMINATION
3) Fixed term contract

• An employee is employed for a specified periods.
• If an employee leaves without the employer consent before
completing contract period, he can be sued for breach of contract.
• An employer can claim damages to cover:
a) The cost incurred in recruiting
b) The cost incurred in training the employee’s replacement
c) The wages would have been earned up to the end of the contract
period.
• If the employer terminates the employee before expiring date, the
employer will be liable to pay the employee for the breach of contract.
• If an employee is recruited on a fixed-term contract for a job which is
clearly ongoing and for which the employer can provide no
justification for having fixed-term contract, then if the employee’s
contract is not renewed, it may be considered as unfair dismissal.
TERMINATION
4) Employee dies or employer dies

Only relevant if the employer is a sole-proprietor.
5) Retrenchment/lay-off
• If an employer retrenches (terminates) an employee on the ground of
redundancy.
• Redundancy occurs when the employer has excess workers (too
many employees)
• Causes of redundancy:
a) Changes in technology: must be proven by the bill of equipment
being brought.
b) Mergers: two or more companies joining together to form one
larger one and this must be proven by legal document.
TERMINATION
Causes of redundancy :
c) Reorganization of the work (aka restructuring exercise: an
employer reorganizes the organization because they can reduce
headcount without jeopardizing profits.
d) To reduce cost or the employer has financial problems: must be
proven by financial statement.
e) Closure of the whole company due to poor management.
6) Frustration of contract
• If an employee is unable to perform his work for which he was
contracted on account of reasons beyond his control.
• The possible causes:
a) Detention by authorities for a lengthy period of time.
b) Prison sentence – approximately more than 6 months.
c) ISA (2 years)
TERMINATION
6) Frustration of contract (cont’d)
• The possible causes:

d) Detention by authorities for a lengthy period of time.
e) Prison sentence – approximately more than 6 months.
f) ISA (2 years).
g) Drug rehabilitation (2 years).
h) Serious or terminal or prolonged illness (e.g. cancer, AIDS).
i) Incapacitated (result of accident – loss of hand, eye, leg, etc that
makes employee incapable to perform work).
j) Loss of license an employee is unable to practice a particular
profession, trade or to perform job (i.e. driver’s license of a driver
or professional license of a doctor, architect or lawyer).
TERMINATION
7) Non-confirmation of a probationer
• When an employer chooses not to confirm an employee on a
probationary appointment.
• On completion of a probationary period, a new employee must be
evaluated and decision made as to his suitability for his post.
8) Breach of contract
• Under Employment Act, if an employee is absent for more than 2 days
without permission and without reasonable excuse and without an
attempt to inform the employer of such excuse.
• Therefore, he is deemed to have broken his contract.
TERMINATION
9) Dismissal (removal from office, sack,

discharge)
• When an employer terminate the employee’s
employment because the employee has
committed misconduct or his performance is not
up to a standards expected by the company.
10) Constructive Dismissal (employer fail to pay

salary, failure to provide work, harassment)
• When an employee walks off the job because the
employer’s actions which amount to a major
breach of contract.
• The breach is so serious that a continuous
employment made impossible for the employed
to tolerate (i.e. the failure to pay salary or
contractual benefits, humiliation and
harassment, failure to provide, etc)
RETRENCHMENT
• Retrenchment is a situation where an employer terminates the service

of one or more employees because there is no longer work available
for them. It must be in bona fide (in good faith).
• The employer needs to take all possible measures immediately when he
is aware of the organization’s problems where retrenchment should be
taken depending on the seriousness of problem and the state of the
national economy.
Tactics to Avoid Retrenchment

1) Retrain/redeploy
Any vacancy filled by redundant worker who is willing and able to
be retrained and redeployed to the new post. Move redundant
worker to other department.
2) Recruitment freeze
Stop recruiting new employees in that particular position.
RETRENCHMENT
Tactics to Avoid Retrenchment
3) Voluntary separation
The employer invites and encourages employees to apply to leave
voluntarily the company by offering sufficient monetary incentive.
4) Reduce costs
Cutting down on luxuries and unnecessary expenditure.
5) Look for new business opportunities
The employer needs to have a long term measure. It will depend on
the management quality in leading the company and the state of the
national and international economy.
6) Cut wages and working hours
The employer needs to reduce wages and working hours in helping
to save costs. This will be only a temporary measure. The action
must be taken with the employee’s consent. If the employer insists
on pay cut without the employee’s agreement, the employee can
walk off the job and claim constructive dismissal.
RETRENCHMENT
Steps to be taken if retrenchment cannot be avoided.
Factors to be considered in identifying which employee to be

retrenched should retrenchment is unavoidable:
1) Criteria should be according to the need for the efficient operation of

the establishment or undertaking.
2) The ability, experience, skill and occupational qualifications of
individual workers required by the establishment or undertaking.
3) The length of service and status (non-citizens, casual, temporary,
permanent).
4) Age of worker.
5) Employee’s family situation.
6) Choose FOF (Foreign Out First).
7) Choose LIFO (Last In First Out - most junior out first) – LIFO will be
applied at the level of job grades.
RETRENCHMENT
Steps to be taken if retrenchment cannot be avoided
• Draw up an action plan

1) Give as early a warning, as practicable, to the workers concerned.
2) Notice period should be at least that required by contract of
employment.
3) Introduce schemes for voluntary retrenchment and retirement and
for payment of redundancy and retirement benefits.
4) Retire workers who are beyond their normal retiring age.
5) Assist the worker to find work outside the undertaking in
cooperation with the Ministry of Labor and Manpower.
6) Spread termination of employment over a longer period.
7) Ensure that no such announcement is made before the workers and
their representative or trade unions have been informed.
Termination Benefits
Not all employees are entitled to termination or retrenchment benefits.

Termination benefits are only for employee:
1) Within the scope of the Employment Act.
2) Has more than 1 year or 12 months service.
3) Within the scope of a collective agreement which there is a clause
requiring such benefits.
4) Has a clause requiring such benefits in his individual contract of
employment.
Under the Employment Act, the minimum benefit:

1) 10 days’ wage for every year of service for employee with 1 to 2 years’ service.
2) 15 days’ wage for every year of service for employee with 2 to 5 years’ service.
3) 20 days’ wage for every year of service for employee with more than 5 years’
service.
The minimum benefit must be paid not later than 3 days after the employee’s last
day of service.
58
END OF CHAPTER 10

Chap 10 - Employment Law

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chap 10 - Employment Law

Uploaded by

Copyright:

Available Formats

CHAPTER 10

Laws providing for basic benefits

1) Employment Act, 1955

• Trade Union Act, 1959

Brief outlines – EPF Act, 1991

 Establishes a system of compulsory savings

 Administered by the SOCSO.

Brief outlines – Occupational Safety & Health Act,

Brief outlines – The Industrial Relations Act, 1967

 Regulates the relations between employers and workmen and their

• Administrator through the Ministry of

• Participant as the largest employer in

1) To protect the welfare of workers (their safety,

ROLES OF GOVERNMENT: DEPARTMENT OF

ROLES OF GOVERNMENT: DEPARTMENT OF

• Implements the Employees

ROLES OF GOVERNMENT: INDUSTRIAL COURT

7) Employee who has entered into a contract of service or contract of

 An agreement made or signed by an

CONTRACT FOR SERVICE

 An agreement made or signed by an

• Maximum wage period is no longer than one month.

• When an employee is first offered a job,

5) If warnings have been given, after expiry period, performance is still

• Defined as any work done in excess

• The Employment Act disallows employee from working more than

• It is for the employer to decide whether there is a need for overtime

• Employment Act S15(2) states that an employee shall be deemed

• An employee is NOT automatically terminated from the job, but the

• When an employee is absent for 1 or 2 days, it is a misconduct for which

• Collect rest day is when worker will be having a 4-nonstop rest

• For monthly rated worker

• For daily rated worker:

Employee cannot be required to work on rest days UNLESS:

• Employment Act grants employees a minimum of 10 public holidays,

• Employer can decide the other 6 days.

• If employee applies for leave, but

A contract of employment comes to an end because:

A contract of employment comes to an end because:

3) Fixed term contract

A contract of employment comes to an end because:

4) Employee dies or employer dies

6) Frustration of contract (cont’d)

• The possible causes:

A contract of employment comes to an end because:

9) Dismissal (removal from office, sack,

10) Constructive Dismissal (employer fail to pay

• Retrenchment is a situation where an employer terminates the service

Tactics to Avoid Retrenchment

Steps to be taken if retrenchment cannot be avoided.

Factors to be considered in identifying which employee to be

1) Criteria should be according to the need for the efficient operation of

• Draw up an action plan

Not all employees are entitled to termination or retrenchment benefits.

Under the Employment Act, the minimum benefit:

You might also like