Whether you are employer or employee in Malaysia, the Employment Act 1955 is a very important act related to your employment.
Below is a summary of some of the important points in that act:
- The Malaysia Employment Act 1995 is applied to Peninsular Malaysia and Labuan only. For Sabah and Sarawak, they are governed by their respective Labour Ordinance.
- Either party to a contract of service may at any time give a termination notice in writing, and the notice period shall not less than:
- 4 weeks for employment less than 2 years
- 6 weeks for employment between 2 to 5 years
- 8 weeks for employment more than 5 year
- The notice period above is minimum requirement, which can be longer in the actual employment contract, and is important for short notice compensation serving, especially when Voluntary Separation, Retrenchment, Early Termination, etc. occur.
- Termination without notice nor compensation can happen in the event of any wilful breach by the other party of the employment contract.
- Employer may dismiss, downgrade or suspend up to 2 weeks after due inquiry to the employee, on the grounds of misconduct or inconsistent in fulfilment of service.
- Employee may terminate without notice when threaten by danger, voilence or disease.
- Contract is deemed broken by employer if he fails to pay wages not later than the 7th day after the wage period.
- Contract is deemed broken by employee if he has been continuously absent from work for more than 2 consecutive working days without prior leave from his employer, unless he has a reasonable excuse for such absence and has informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during such absence.
- Wages is not payable during the period when employee is imprisoned or attending to a court otherwise than as a witness on his employer's behalf.
- No deduction of wages can be made by employer other than:
- Deductions to the extent of any overpayment of wages made within 3 months of the mistake.
- Deductions for the indemnity due to the employer by the employee.
- Deductions for the recovery of advances of wages.
- Deductions authorized by written law, such as EPF, SOCSO, PCB, etc.
- Deductions upon employee's written request, in respect of the payments to a registered trade union or co-operative thrift and loan society of any sum of money due to the trade union or society by the employee on account of entrance fees, subscriptions, instalments and interest on loans, or other dues.
- Deductions upon employee's written request, in respect of payments for any ESOS shares.
- Deductions upon employee's written request, in respect of payments to a third party on behalf of the employee.
- Deductions upon employee's written request, in respect of payments for the purchase by the employee of any goods of the employer's business offered for sale by the employer.
- Deductions in respect of the rental for accommodation and the cost of services, food and meals provided by the employer to the employee 'at the employee's request or under the terms of the employee's contract of service.
- The total deduction shall not exceed 50% of the employee's monthly wages, unless for:
- Indemnity payable by an employer to an employee
- Final payment of the wages of an employee for any amount due to the employer and remaining unpaid by the employee on the termination of the employee's contract of service
- Repayment of a housing loan (where an additional limit of 25% applied)
- All wages must be paid in legal tender or direct into bank account.
- Employer shall not require any female employee to work in any industrial or agricultural undertaking between 10pm and 5am nor commence work for the day without having had a period of 11 consecutive hours free from such work.
- No female employee shall be employed in any underground working.
- Every female employee shall be entitled to maternity leave for a period of not less than 60 consecutive days in respect of each confinement.
- Maternity leave shall not commence earlier than a period of 30 days immediately preceding the confinement of a female employee or later than the day immediately following her confinement.
- A female employee shall be entitled to receive maternity allowance if she:
- Has been employed more than 4 months before confinement.
- Is employed more than 90 days during the 9 months immediately before her confinement.
- If a female employee dies from any cause during the maternity leave period, her maternity allowance shall be paid to her nominee.
- The employer cannot terminate a female employee who remains absent from her work after the expiration of the maternity leave as a result of illness related to pregnancy or confinement and certified by a registered medical practitioner, until her absence exceeds a period of 90 days after the maternity leave.
- Every employee shall be allowed in each week a rest day of 1 whole day.
- Employee who required to work during his rest day should be double paid.
- An employee shall not be required under his contract of service to work:
- more than 5 consecutive hours without a period of leisure of not less than 30 minutes
- more than 8 hours in one day
- in excess of a spread over period of 10 hours in one day
- more than 48 hours in one week
- For any overtime work carried out in excess of the normal hours of work, the employee shall be paid at a rate not less than 1.5 times his hourly rate of pay.
- Every employee shall be entitled to a paid holiday at his ordinary rate of pay on 10 gazetted public holidays in any one calendar year, including:
- the National Day
- the Birthday of the Yang di-Pertuan Agong
- the Birthday of the Ruler or the Yang di-Pertua Negeri
- the Workers' Day
- Employee who required to work on paid holiday shall be double paid.
- Employee who required to work overtime on paid holiday shall be triple paid.
- An employee shall be entitled to paid annual leave of:
- 8 days for every 12 months of continuous service with the same employer if he has been employed by that employer for a period of less than 2 years
- 12 days for every 12 months of continuous service with the same employer if he has been employed by that employer for a period of 2 to 5 years
- 16 days for every 12 months of continuous service with the same employer if he has been employed by that employer for a period of 5 years or more
- An employee shall, after examination by registered medical practitioner at the expense of the employer, be entitled to paid sick leave:
- where no hospitalisation is necessary:
- 14 days in the aggregate in each calendar year if the employee has been employed for less than 2 years
- 18 days in the aggregate in each calendar year if the employee has been employed between 2 to 5 years
- 22 days in the aggregate in each calendar year if the employee has been employed for 5 years and above
- 60 days in the aggregate in each calendar year if hospitalisation is necessary, as may be certified by such registered medical practitioner or medical officer
- An employee shall also be entitled to paid sick leave after examination by a dental surgeon as defined in the Dental Act 1971
- An employee who absents himself on sick leave shall be deemed to absent himself from work without permission if he is:
- not certified by a registered medical practitioner or a medical officer or a dental surgeon
- certified by such registered medical practitioner or medical officer or dental surgeon but without informing or attempting to inform his employer of such sick leave within 48 hours of the commencement thereof
Click here to read the full Malaysia Employment Act 1955.
