Employment Law 1

New amendments to Employment Act 1955

• Covers ALL employees irrespective of wages
• Previously, the Employment Act 1955 in Malaysia only protected employees earning a
monthly salary of RM2,000 or less, along with specific worker categories. This change
ensures that all employees are equally protected under the Employment Act.

• Flexible working arrangements

• Employees now have the right to request flexible work arrangements from their
employers in writing. Employers are required to respond to these requests within 60
days and provide reasons if they reject the requests.

• Maximum working hours

• Reduced from 48 hours to 45 hours per week
• Paid maternity leave
• From 60 days to 98 days

• Introduced paternity leave

• 7 days of consecutive, paid paternity leave. (With conditions, married to the mother,
employed for 12 months, notify employer at least 30 days before).

• Awareness for sexual harassment

• Now, employers are required to display a notice to raise awareness on sexual
harassment in the workplace. This notice must be placed in conspicuous locations,
and it must be displayed at all times.
What does Section 101C of the Employment Act
state about the presumption of who is considered
an employee and an employer?
• Employee
• Where his manner of work is subject to the control or direction of another person
• Where his hours of work are subject to the control or direction of another person
• Where he is provided with tools, materials or equipment by another person to execute
work
• Where his work constitutes an integral part of another person’s business
• Where his work is performed solely for the benefit of another person
• Where payment is made to him in return for work done by him at regular intervals
and such payment constitutes the majority of his income
• Employer
• Where he controls or directs the manner of work of another person
• Where he controls or directs the hours of work of another person
• Where he provides tools, materials or equipment to another person to execute work
• Where the work of another person constitutes an integral part of his business
• Where another person performs work solely for his benefit
• Whether or not payment is made by him in return for work done for him by another
person
The case of American International Assurance Co Ltd v
Dato’ Lam Peng Chong laid down the tests to find out
whether a person is an employee. Explain the 3 tests.

• The Control Test

• The test refers to the control of an employee by another, not only as to what he must do but
also as to how and when he must do it.

• The Organization Test

• The principle of this test is to determine how much the worker is integrated into or is part of
the organization. The more integrated, the more likely he or she can be considered an
employee.

• The Multiple Test

• Concerns the question of whether a person is employed or self-employed, i.e are there
indications that the worker is self-employed rather than an employee?
What is the procedure to file a case with the Labour
Department to claim for termination benefits?
• This claim is regulated under Section 60J of the Employment Act.

• Once a case has been filed with the Labour Department the Director
General can:
• Inquire into the circumstances of the dismissal;
• Confirm the decision of the employer;
• Set aside the decision of the employer.
What is the process for filling a claim for reinstatement at
the Department of Industrial Relations?
• Section 20 Industrial Relations Act 1967
• Establishes a means for employees to challenge the termination of their employment.

• Filing a claim under Section 20:

• File a written complaint to the Director General of Industrial Relations at the office
nearest to the place of employment within 60 days from the date of the
termination. The former employee will not be qualified to submit a claim after the 60
days have passed.
• The Industrial Relations Department will schedule a conciliation meeting between the
employer and the employee after the complaint has been filed.
• If the employer fails to attend, then the Department assumes that the employer is not
interested in settling the dispute. The claim would then be sent to the Industrial Court
for arbitration proceeding to take place and greater costs will be incurred by the
employer.
• If the employee does not attend then the Department will assume that the employee
has no interest to further the claim. The claim would then be dropped.
• If either party is not free to attend then they must inform the Department of
Industrial Relations and negotiate a different date for the meeting.
• Conciliation
• Conciliation is the process whereby a neutral third party i.e. the Departmental Officer
assigned to the case, attempts to bring about a settlement to the dispute.
• The officer listens to each parties’ case and provides an opinion as to whether the
dismissal was properly carried out.
• The decision of the officer is not binding on either party.
• Whatever is discussed during the conciliation proceedings is confidential and cannot
be used as evidence in the Industrial Court.
• Outcome of conciliation:
• Employer agrees to reinstate employee
• Employee agrees to withdraw his claim for reinstatement
• Employee willing to accept compensation from employer in return for withdrawing
his claim
• Employer and employee fail to reach agreement.
• Reasons the employer may agree to pay compensation rather then fight
the claim made by the employee in court:
• To end the dispute quickly to save costs
• To end dispute so that sensitive information is not released to the public as this would
happen if the case were to go to the Industrial Court
• To avoid negative publicity
What is the purpose of requesting a declaration from
the High Court to establish that an individual's
dismissal from employment was wrongful, and what
potential outcomes or remedies could they seek
through this process?
• Very few employees (in the private sector) apply to the High Court for a
declaration that their dismissal is wrongful.
• What to expect? – delay and high cost as it will involve waiting for hearing
dates, postponements and litigation costs.
• It is common that the High Court will not order an employer in the private
sector to reinstate an employee.
• Neither will there be an order on employer to pay compensation to an
employee who has been unfairly dismissed.
• All that can be obtained is payment of wages in lieu of notice.

• Since most employment contracts provide for 1 to 3 months notice the

compensation gained will be wages in lieu of notice for 1 – 3 months.
• In most instances the legal costs may amount more than the
compensation claimed.
• Public servants are not covered by the Employment Act 1955 and the
Industrial Relations Act 1967.
• Hence if a public servant is unfairly dismissed, their only option would be
to bring an action in the High Court.
• For the private sector employee, they would only consider bringing an
action in the High Court, if for some reason or the other they have missed
the 60 day period within which they should have brought the action under
the Employment Act 1955 or Industrial Relations Act 1967.
Provide examples of court cases where judgments
were rendered on cases related to dismissal
• Mohd Saufi Ahmad Rozali v PUSPAKOM
• The claimants were dismissed for unlawful conduct when they were charged with a
criminal offence. Industrial Court held that dismissals were fair.

• Jebsen & Jessen Engineering v David a/l Sandanasamy

• In this case, the claimants who were retrenched argued that the retrenchment amounted
to unfair dismissal. The Court of Appeal held that the case was not one of unfair dismissal.

• Wong Choon Moey v Practimax Sdn Bhd

• The claimant, a probationer was dismissed for poor performance. The court held that the
circumstances of the dismissal where insufficient warning and avenue to improve leading
to dismissal was unfair dismissal.