As we venture into the working world and get absorbed into the commitments that our jobs require, some of us could still be clueless about the legal rights we're entitled to as employees
Thankfully, reputable companies follow labour laws and ensure that their employees are well taken care of, but it's always good to know what your rights are to protect yourself from any unscrupulous organisations or practices
Employment Act 1955 defines 'employees' as individuals whose monthly wages are less than RM2,000 and those who are employed in manual work such as artisans, transport operators, supervisors, and domestic workers too are classified as employees even if their wages are above RM2,000.
However, Employment Act 1955 only applies to Peninsular Malaysia and Labuan. The employment practices in the East Malaysian states of Sabah and Sarawak are governed by their respective Labour Ordinance. Note that this article only focuses on the employment laws for Peninsular Malaysia and Labuan.
The information below on labour rights in Malaysia was obtained from the official website of the Malaysian Ministry of Human Resources. You can read the complete PDF version of the Employment Act 1955 here.
Here are all the important rights you are entitled to as an employee in Peninsular Malaysia and Labuan:
1. Payment of wages
Employers must pay all their employees their monthly salary no later than the seventh day after the last day of any wage.
The minimum wage in Malaysia is currently set at RM1,000 a month for Peninsular Malaysia and RM920 per month for Sabah, Sarawak, and Labuan. This does not apply for domestic helpers. Employers must pay a minimum of RM900 for their Indonesian domestic helpers.
As for advances, it shall not exceed the amount of wages which the employee earned in the preceding month, unless it is to enable the individual to:
- Purchase, build, or improve a house
- Purchase a land
- Purchase livestock
- Purchase a motorcar, motorcycle, or a bicycle
- Purchase shares of the employer's business offered for sale by the employer
However, employers are not allowed to charge interest on advances.
Employers do not need to pay the wages of an employee who is absent from work due to imprisonment or attendance in court unless it is as a witness on his employer's behalf.
The salary must be paid in legal tender or with the employee's written consent, it may be paid through the bank or by cheque.
Employers can offer to provide the employee with accommodation, food, fuel, water, medical attendance, or any other approved service in addition to the monthly wages. Note that employers are forbidden from providing employees with intoxicating liquor as part of terms of a contract of service.
2. Working hours
An employee is not required to work under his contract of service:
- For more than five consecutive hours without a period of leisure of not less than 30 minutes.
- For more than eight hours in one day.
- For more than 48 hours in one week.
- In excess of a spread over a period of 10 hours in one day.
However, an employer may be required by his employer and/or nature of work to exceed the limit of hours above and to work on a rest day if:
- The work is essential to the life of the community
- The work is essential for the defence or security of Malaysia
- There's urgent work to be done to a machinery or plant
- There are unforeseen circumstances which requires the employee to work
- Accident, actual or threatened, in or with respect to his place of work
- There's work that is essential to the economy of Malaysia or any important service.
Should the contract of service mention the practice of overtime rates, employees are entitled to be paid a rate of no less than 1.5 of their hourly salary if they work on normal working days.
If an employee is required to work on his rest day, he must be paid two times the hourly rate of pay. As for working on public holidays, an employee is entitled to be paid three times the hourly rate of his pay.
Also, in place of overtime rates, certain companies practice the system of leave replacement credits, whereby an individual can claim a leave day if they work for more than the specified period of hours on a leave day.
Note: Companies that offer overtime rates will usually mention it in the contract of service that is agreed upon by both the employer and employee at the start of the term of employment. However, if there is no mention of overtime rates in the contract, employers can seek clarifications from their human resource department should the need for it arise.
4. Rest day
Each employee is entitled to at least one whole rest day in a week.
Wages for employees who work on rest days:
a) A daily-rated worker
- One day's wages if the work does not exceed half of his normal hours of work.
- Two days' wages if the work is more than half but does not exceed his normal hours of work.
b) A monthly-rated worker
- 1/2 day's wages if the work does not exceed half his normal hours of work.
- One day's wages if the work is more than half but does not exceed his normal hours of work.
For overtime on a rest day, an employee must be paid a rate which is not less than two times his hourly rate of pay.
Note that these specifications on wages for working on a rest day would usually be mentioned in the contract of service.
5. Annual leave
Annual leave is an addition to rest days and paid holidays.
An employee is entitled to paid annual leave of:
- Eight days for every 12 months of continuous service with the same employer if he has been employed for a period of less than two years.
- 12 days for every 12 months of continuous service with the same employer if he has been employed for a period of more than two years, but less than five years.
- 16 days for every 12 months of continuous service with the same employer if he has been employed for a period of five years or more.
If the individual has not completed 12 months of continuous service with the same employer during the year his contract of service terminates, his paid annual leave must be directly proportionate to the number of completed months of service. Any fraction of the annual leave that is less than one-half of a day will be disregarded, and if it is one-half or more, it shall be counted as one day.
Sick leave and/or maternity leave is not considered as annual leave. When an employee takes sick leave or maternity leave, the annual leave shall be deemed to have not been taken in respect of the days for which sick leave or maternity leave is so granted.
If both the employer and employee sign a contract which says that the employee will not take any annual leave, he is then entitled to payment in replacement for the annual leave.
6. Sick leave
An employee, after examination at the expense of the employer;
- by a registered medical practitioner appointed by the employer (panel clinics); or
- If there are no designated panel clinics or the services of the appointed medical practitioner is not obtainable, taking into consideration the nature and circumstances of the illness, the employee can be examined by any other registered medical practitioners or medical officers.
Following which, if the illness does not require hospitalisation, the employee is entitled to sick leave days as follows:
- 14 days every year if the employee has been employed for less than two years.
- 18 days every year if the employee has been employed for two years or more but less than five years.
- 22 days every year if the employee has been employed for five years or more.
However, if the illness requires hospitalisation, a total number of 60 days will be provided for each employee. This is inclusive of the paid sick leave entitled as stated above.
Employees are entitled to their ordinary pay rate for every day of their sick leave, including hospitalisation.
7. Public holidays
Employees are entitled to paid holiday on the following days:
1. Eleven of the gazetted public holidays, five of which are:
- National Day
- The birthday of the Yang di-Pertuan Agong
- The Birthday of the Ruler or the Yang di-Pertua Negeri (based on the state the employee works in)
- Workers' Day
- Malaysia Day
2. On any day appointed as a public holiday under Section 8 of the Holidays Act 1951 which refers to any other day that can be observed as a public holiday as the leader of the state sees fit after consultation with the State Authority. An example would be public holidays for victories in major sports events (badminton, hockey, football, etc.).
Note that for employers who have already mentioned in their handbook that they do not observe all gazetted public holidays, they are under no statutory obligation to observe certain days that are declared as public holidays.
For example, earlier this year, 24 April 2017 was declared as a public holiday in celebration of the installation of Sultan Muhammad V as the 15th Yang di-Pertuan Agong.
However, quite a number of employers did not observe this as a public holiday due to operational requirements or urgencies. As such, employers can require their employees to work on that day but they will have to grant their employees any other day as a paid public holiday in substitution, in line with the Holiday Act 1951.
If a public holiday falls on a rest day and the following day is a working day, then that day shall be a paid holiday substitution. For example, if a public holiday falls on a Sunday, Monday shall automatically be a public holiday too.
8. Employment of women
Employers are not allowed to make their female employees do any form of industrial or agricultural work between 10pm and 5am in the morning, or commence work for the day without having a period of 11 consecutive hours free from such work.
Also, female employees shall not be employed to do any underground work.
9. Maternity protection
All female employees are entitled to maternity leave for a period of not less than sixty consecutive days if:
- She has been employed for a period of not less than or amounting to 90 days during the nine months immediately before her confinement; and
- She has been employed at any time in the four months immediately before her confinement.
They are also entitled to maternity allowance which is basically the employee's ordinary monthly salary which must be paid no later than the seventh day of the month.
It is considered an offence if an employer terminates the service of a female employee during her maternity leave.
10. Termination of employment
Provision for termination of employees must be provided in the contract of service that is agreed upon and signed by the employee when they join an organisation.
Contract of service is any agreement - either in oral or writing - where one person agrees to employ another as an employee and the other agrees to serve his/her employer as an employee based on specifications provided in the contract by the employer. This includes a apprenticeship contract.
If the contract of service has no specification on termination of employee, period of notice should be as follows:
- Four weeks notice if the employee was employed for less than two years.
- Six weeks notice if the employee was employed for more than two years but less than five years.
- Eight weeks notice if the employee was employed for more than five years.
However, the contract of service can be terminated should the employee commit any misconduct. After due inquiry, the employers may do any three of these things:
- Dismiss the employee without notice.
- Downgrade the employee.
- Suspend the employee without wages for a period of no more than two weeks, or;
- Impose any other lesser punishment as the employer deems just and fit.
The contract of service will be deemed obsolete should this happen:
- An employer is considered to have broken the contract of service, should he fails to pay the salary of his employee on or before the 7th day of the month.
- An employee shall be deemed to have broken his contract of service if the individual is continuously absent from work for more than two consecutive working days without prior leave, unless he has any other reasonable excuse for the absence and has informed the employer of such excuse at the earliest opportunity.
11. Lay-off benefits
Employees are usually laid-off when a company experiences some form of downturn in its revenues or are making changes to their business operations. Typically, companies would offer severance packages in the event that they are laying off employees.
Lay-off benefits must not be less than:
- 10 days' wages for every year of employment under the same employer if the employee has been employed for a period of less than two years.
- 15 days' wages for every year of employment under the same employer if the employee has been employed for a period of two years or more but less than five years.
- 20 days' wages for every year of employment under the same employer if the employee has been employed for a period of five years or more.
Employers are required to pay the lay-off benefits to their employees no later than seven days after the relevant date.
In the event that you face any issues with the terms of your employment and fail to resolve the issue with your employer, you can get in touch with the Malaysian Ministry of Human Resources
You can direct your enquiries or lodge complaints by either calling the customer service of the departments relevant to your problem or via text message by typing 'KSM space Department Code space ADUAN [complaints]' and sending it to 15888.
Details on the telephone numbers of the customer service departments and the list of department codes can be found here.