Guide To Employment Act 1955

The Employment Act provides minimum terms and conditions (mostly of monetary value) to certain category of workers.

The Definition of "Employees"

The following types of employees are included:

(a) Any employee as long as his month wages is less than RM2000.00 and

(b) Any employee employed in manual work including artisan, apprentice, transport operator, supervisors or overseers of manual workers, persons employed on vessels and even domestic servants are classified as employees even if their wages is more than RM2000.00 per month.

“contract of service” means any agreement, whether oral or in writing and whether express or implied, whereby one person agrees to employ another as an employee and that the other agrees to serve his employer as his employee and includes an apprenticeship contract

Contract of service shall not contain any condition that restricts rights of employees to join, participate in or organize trade unions.

A contract of service must contain a provision for its termination. In the absence of any agreement to the contrary, period of notice for termination of contracts shall be as follows:

(a) 4 weeks’ notice if the employee employed for less than 2 years;

(b) 6 weeks’ notice if so employed for over 2 years but less than 5 years;

(c) 8 weeks’ notice if so employed for 5 years or more.

A contract of service may be terminated for special reasons as such misconduct on the part of the employee. The employer after due inquiry may take the following types of action:

(a) dismiss without notice the employee; or

(b) downgrade the employee; or

(c) impose any other lesser punishment as he deems just and fit, or suspend the employee without wages for a period not more than two weeks.

When contract is deemed to be broken by employer if he fails to pay wages on or before the 7th day.

An employee shall be deemed to have broken his contract of service with the employer if he has been continuously absent from work for more than two 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.

Payment of wages

Every employer shall pay to each of his employees not later than the seventh day. Payment on normal termination of contract shall be paid to such employee on the same day on which such contract of service terminates.

Advances to employees shall not exceed the aggregate the amount of wages which the employee earned in the preceding month, unless such advance is made to the employee to enable him:

(a) to purchase a house or to build or improve a house;

(b) to enable him to purchase land;

(c ) to enable him to purchase livestock;

(d) to enable him to purchase a motorcar, a motorcycle or a bicycle;

(e) to enable him to purchase shares of the employer’s business offered for sale by the employer;

Wages is not due for absence from work through imprisonment or attendance in court otherwise than as a witness on his employer’s behalf.
Wages to be paid in legal tender.

With the employee’s written consent, payment of wages through bank or by cheque is allowed. Charging interest on advances is forbidden.

However, It shall not be illegal a contract of service with an employee under which the employer agrees to provide the employee with house accommodation, food, fuel, light, water, medical attendance, or any approved amenity, or approved service in addition to wages but no employer shall provide any employee with any intoxicating liquor as part of the terms of a contract of service.

Annual leave

An employee shall be entitled to paid annual leave of :

(a) 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;

(b) 12 days for every twelve months of continuous service with the same employer if he has been employed by that employer for a period of 2 years or more but less than 5 years; and

(c) 16 days for every twelve months of continuous service with the same employer if he has been employed by that employer for a period of 5 years or more; and if he has not completed 12 months of continuous service with the same employer during the year in which his contract of service terminates, his entitlement to paid annual leave shall be in direct proportion to the number of completed months of service:

Any fraction of a day of annual leave so calculated which is less than one-half of a day shall be disregarded, and where the fraction of a day is one-half or more it shall be deemed to be one day.

An employee who is on paid annual leave becomes entitled to sick leave or maternity leave while on such annual leave, the employee shall be granted the sick leave or the maternity leave and the annual leave shall be deemed to have not been taken.

If at the request of his employer, the employee agrees in writing not to taken annual leave, he is then entitled to payment in lieu of annual leave.

Complaints

The Director-General may inquire into and decide any dispute between an employee and his employer in respect of wages or any other payments in cash due to such employee under any term of the contract of service or provision under the Employment Act.

However, the Director-General shall not inquire into, hear, decide or make any order in respect of any claim, dispute that is:

(a) pending in any inquiry or proceedings under that the Industrial Relations Act;

(b) has been decided upon by the Minister under section 20(3) of that Act; or

(c ) has been referred to, or is pending in any proceedings before, the Industrial Court.

The power of the Director-General under section 69(1)(a) also extends to employees whose wages per month exceed 2000.00 ringgit but does not exceed 5000.00 ringgit.