MALAYSIAN

EMPLOYMENT LAWS

Ministry of Human Resources

Minister

Dept. Of Labor
(Pen. Msia)

Dept. Of Skills
Development

Dept. Of Labor
(Sabah)

Dept. Of Labor
(Sarawak)

Dept. Of Occup.
Safety & Health

Dept. Of
Ind. Relations

Dept. Of
Trade Unions

Dept. Of
Manpower

Employment Laws (1)

DEPARTMENT OF LABOR
1. Employment Act, 1955
2. Workmens Compensation Act, 1952
3. Wage Councils Act, 1947
4. Children & Young Persons Employment Act,
1966
5. Employment Restriction Act, 1968
6. Workers Minimum Standards of Housing &
Amenities Act, 1990
7. Sabah Labor Ordinance
8. Sarawak Labor Ordinance

Employment Laws (2)

DEPARTMENT OF INDUSTRIAL RELATIONS

- Industrial Relations Act, 1967
DEPARTMENT OF OCCUPATIONAL SAFETY &
HEALTH
1. Factories & Machinery Act, 1967
2. Occupational Safety & Health Act, 1994
DEPARTMENT OF MANPOWER
- Private Employment Agencies Act, 1981

Employment Laws (3)

DEPARTMENT OF TRADE UNIONS

- Trade Unions Act, 1959
DEPARTMENT OF SKILLS DEVELOPMENT
- The Skills Development Fund Act 2004
- The National Skills Development Act 2006

Employment Act (EA) 1955

1. Most important piece of employment legislation
2. Coverage (for Peninsular Msia & private sector only):

Wages not more than RM1,500 per month

Engaged in manual labor/supervises manual workers
Operates/maintains mechanically propelled vehicles

3. Issues addressed:

Frequency of wages
Deductions from wages
Protection of female workers
Maternity protection
Working hours
Leave (annual leave, sick leave, public holidays)
Retrenchment benefits
Employment of foreigners (FOF policy), etc.

Other bodies that deal

with employee rights
1. Employees Provident Fund
The Employees Provident Fund (EPF) Act, 1991
2. Social Security Organization (SOCSO)
The Employees Social Security (SOCSO) Act,
1969
3. Human Resource Development Berhad
Human Resource Development Fund Act, 1993
4. The Industrial Court

The Courts
Federal Court
Court of Appeal
High Courts

Syariah
Court

Sessions Courts
Magistrate Courts

Industrial
Court

The Employment Contract

1.
2.
3.
4.
5.
6.
7.

Contract OF service
Contract FOR service
Permanent basis (indefinite contract)
Fixed term contract
Fixed task contract
Full time basis
Part-time basis

Termination of Employment Contract

1.
2.
3.
4.
5.
6.
7.

Resignation
Retirement
Frustration of contract
Non-renewal of fixed-term contract
Dismissal for misconduct or poor performance
Forced resignation or constructive dismissal
Retrenchment

Disciplinary Procedures
Misconduct

Procedures
1.
2.

3.
4.

Record any complaint or alleged wrongdoing

Investigate the complaint thoroughly

Show cause letter

Suspension
Charge the employee
Hold a domestic inquiry (DI)

Potential Outcomes
1.
2.
3.
4.
5.

Oral warning
Written warning
Suspension
Demotion/downgrading
Dismissal

Disciplinary Procedures
Poor Performance

Procedures
1. Issue written warning on poor performance
2. Assist employee to improve performance
3. Inform employee that if he/she does not improve,
may be dismissed

Important: Have to have proof of non-performance

Constructive Dismissal
1. WHAT: Employee claims being forced out of
employment by actions of employer.
2. Main test: Did employer breach any key element in the
terms of the employment contract?
3. Most common issues:

Wage cut (without employee consent)

Demotion
Transfer
Change of duties
Humiliation

Retrenchment
1. WHAT: Termination of employee services due to
redundancy
2. Actions to avoid retrenchment

Recruitment freeze
Re-train and re-deploy
Voluntary Separation Scheme (VSS)
Reduce costs
Reduce pay and working hours

3. Based on Code of Conduct for Industrial Harmony

Specifies proper retrenchment procedures

4. Retrenchment benefits (specified in the EA or Union

Agreement)

THE END