SCOPE OF THE EMPLOYMENT ACT
1. What is the Employment Act, 1955?
It is the Labor Law in Malaysia - that's what!!! Actually it is just one of the many sets of "labor laws" found in this country. Do you know that an average Human Resource Practitioner in this country may need to know about more than 10 sets of laws which affect workers one way or other?
Well then - the Employment Act 1955 is that one set of labor laws which govern many aspects of the contract of service between an employer and an employee. This piece of legislation, among other things:-
defines a contract of service, and manner of termination,
sets the minimum terms and conditions of employment,
prescribes when an employer may take action against an employee or when the employee may take action against the employer,
regulates payment of wages and deductions
sets out the mechanisms for enforcement of the provisions
2. Which Employees are covered by the Employment Act, 1955 and how are they covered?
There are different categories and extent of protection, such as :-
2.1. Full Protection is given to:
Any employee (whatever his job title or position, whether a citizen, permanent resident or foreign worker, with the exception of domestic servant) whose wages does not exceed RM1500 per month is fully covered by the Employment Act, or
Any employee who is engaged in manual Labor continues to be fully covered by the Act even if his wages exceed RM1500;
Any employee who is engaged in operating (driver or attendant of ) any mechanically propelled vehicle operated for transport of passengers or goods (lorries, buses, taxi) for reward or for commercial purpose is also fully covered irrespective of the amount of wages earned;
the direct supervisor of any manual Labor also enjoys full protect regardless f the amount of wages earned;
any employee who is employed in any vessel (ship and boat ) registered in Malaysia as long as he is not a duly certified officer is also given full protection regardless of amount of wages earned
(See First Schedule of the Employment Act)
2.2. Partial Protection
Domestic Servant, regardless of amount of wages earned are NOT covered by -
Section 12 - entitlement to minimum notice for termination of service
Section 14 - domestic inquiry and disciplinary action
Section 16 - entitlement to minimum days of work if employed in an industrial undertaking
Section 64 - of being counted within the prescribed minimum of 5 person persons
Part IX - entitlement to maternity benefits
Part XII - entitlement to minimum benefits and payments such as annual leave, working hours, rest day, overtime, public holiday, sick leave, medical treatment, etc., etc.
Part XIIA - entitlement to Termination and Lay-off Benefits
(See First Schedule of the Employment Act)
Any employee who earns more than RM1500 but who is not included for continuing protection is not entitled to any benefits provided by the Employment Act, 1955 ((See First Schedule of the Employment Act) but by virtue of Section 69B, he is entitled to seek the intervention of the Labor Office to enforce the terms and conditions of employment in accordance to the Contract of Service he negotiated with his employer.
3. Who is Not Covered Under This Act??
As said above a general rule, most employees who earn more than RM1500 and above are not covered by the provisions for minimum benefits, payments and so on. For those who are paid not more than RM5000, the law has been amended to provide them with assistance by the Labor Office to enforce their contract of service.
Those who are not protected at all would be those earning more than RM5000.
4. What Does Protection Offer To an Employee?
The Employment Act provides many forms of protection. Among the most significant would be :
Automatic entitlement to minimum benefits provided by the Act or existing benefits, whichever is more favorable
Minimum notice period for termination or wages in lieu of notice
Minimum days of work for certain industry
Maternity benefits
Leave, holiday, rest day and payments
Termination and lay-off benefits
Right to seek intervention of the Labor Office for failure of employer to uphold the agreed terms of employment .
5. What About Those Employees Who Are Not Covered By The Act?
An innnnteresting question that is not so difficult to answer.
a. When it comes to determining the terms and conditions of employment, there are no statutory minimum for any benefit to speak of. It is for the employee to negotiate for his own terms and conditions of employment subject to his bargaining position and the existing practices of the prospective employer.
b. Once the terms and conditions are agreed upon, they become a part of the Contract of Service, which is enforceable like any other contract.
c. If there is a breach of contract of service by the employer, then an employee who is not protected will have to seek remedy through civil court proceedings, whereas those who are protect can easily obtain the assistance of Labor officer which is free of charge and much speedier
6. Is there any other recourse if an unprotected employee does not want to seek recourse through civil court proceedings?
It depends on the issue. Certain things there may be other recourse, for others there may be none. Let's look at some examples -
Example 1
Say an employer agrees to pay (or has been paying) a person a fixed allowance of RM500. Then cost cutting reasons, he decides to remove this allowance against the objection of the employee who is not covered by the Act. In this case, the employee can take up a case of "constructive dismissal" against the employer if the employer remains stubborn and insist on unilaterally changing the terms of employment.
Example 2
An unprotected employee resigns from his job by proper means and giving his employer proper notice. Despite that, the employer unreasonably refuses to pay the employee the final balance of his salary when the termination takes place. In this case, the employee has no other recourse but to sue for his money.
7. Are Part-Time Workers Protected By This Act?
Yes, they are and always have been. Even before the present amendments were made, the definition of "employee" was such that part-timers were never specifically excluded and so were protected like every other employee. The amendment now merely makes it very clear that they come within the ambit of the Employment Act, 1955 and subject to the conditions set in the First Schedule of the Act.
The amendment also provides for the Minister of HR to make regulations to govern the terms and conditions of employment of service of a part-time employee (something which he has yet to do).
The general assumption however, seems to be that since they have been defined as employees whose average work hours do not exceed 70% of that performed by regular employees, therefore the benefits should be apportioned to that ratio of work hours against that of regular employees - something which I may not totally agree with at this point. It is too simplistic an assumption. Anyone proposing to adopt this approach is advised to think it thrice over, especially in view that the Minister has not made any regulations yet. By the time the Minister makes his regulations, you may find what you have given does not measure up to the levels set by the Minister - which of course is a minor matter which you can rectify from then on. On the other hand you may find yourself having given more than what is set, and of course you cannot then reduce what you have already given, can you? Then again, it does not that it matter if you can afford that little bit extra, does it?
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