Employment Law in Malaysia

WHAT IS EMPLOYMENT?

Employment means work or service performed by an individual to the task at hand for another person or entity in exchange for wages or other remuneration.

WHAT IS EMPLOYMENT LAW?

Employment Law is the law which regulates the operation of the labour market in general and the employment relationship between employers and employees in particular. Examples include hiring process, suspension from work, maternity rights, layoff and wages.

The obligations and rights of an employment contract are covered by the Employment law.

When an offer for employment is made by an employer to an employee, the law governing the relationship between an employee and an employer begins.

WHAT ARE THE BASIC TERMS USED TO DESCRIBE THE EMPLOYMENT RELATIONSHIP?

An employer in relation to an employee or a workman, means a person by whom the employee or workman is employed. An employer obtains the services of another to perform work and has direct control of the way in which the work is to be done.

An employer shall provide the means through which the services will be performed such as providing a place where the work is to be performed and tools required to get the job done.

Contract of service means any agreement, whether express or implied, and if express, whether oral or in writing where the employer agrees to employ and the employee agrees to be employed and includes an apprenticeship contract.

In general, an employee means a person who has entered into or works under a contract of employment. There are different interpretations for the term, employee, in different Acts governing the labour market in Malaysia. Those interpretations will determine whether you are an employee protected under the scope of an Act.

Where an employee begins employment with an employer and for a period of more than one month, such employee must be given a written contract of employment with particulars of the terms and conditions of employment including the notice period required to terminate the contract of employment.

WHAT ARE THE LAWS GOVERNING EMPLOYMENT IN MALAYSIA?

The principal legislation governing the labour market and employment relationship in Malaysia is the Employment Act 1955. However, the application of these rules to Sarawak and Sabah references made under the Act shall be substituted by references to the Sarawak Labour Ordinance (Cap. 76) and Sabah Labour Ordinance (Cap. 67) or other written laws in force in Sarawak or Sabah, as the case may be.

Some other legal regulations include:

• Pensions Act 1980
  For the administration of pensions, gratuities and other benefits for officers in the public service and their dependants.
• Employees Social Security Act 1969 (ESSA)
  For social security protection to all employees and their dependants as well as the employers. This Acts is administered by the Social Security Organization (SOCSO) or Pertubuhan Keselamatan Social (PERKESO), Malaysia.
• Employees Provident Fund Act 1951
  For the provision of financial security to its members particularly after retirement, through a compulsory savings scheme. This Act is administered by the Employees Provident Fund (EPF) or Kumpulan Wang Simpanan Pekerja (KWSP), Malaysia.
• Occupational Safety and Health Act 1994 (OSHA)
  For the safety, welfare and health of persons of workplaces or in the operation of high risk machinery against risks to safety or health. This Act is administered by the Department of Occupational Safety and Health or Jabatan Keselamatan dan Kesihatan Pekerjaan, Malaysia.
• Private Employment Agencies Act 1981
  This Act is administered by the Manpower Department, Ministry of Human Resources or Jabatan Tenaga Rakyat, Kementerian Sumber Manusia, Malaysia.
• Human Resources Development Act 1992
  This Act is administered by the Human Resources Development Council or Majlis Pembangunan Sumber Manusia, Malaysia.
• Factories and Machinery Act 1967
  This Act is administered by the Department of Occupational Safety and Health or Jabatan Keselamatan Dan Kesihatan Pekerjaan, Malaysia.
• Petroleum (Safety Measure) Act 1984
  This Act is administered by the Department of Occupational Safety and Health or Jabatan Keselamatan Dan Kesihatan Pekerjaan, Malaysia.
• Trade Unions Act 1959
  This Act is administered by the Trade Union Affairs Department or Jabatan Hal Ehwal Kesatuan Sekerja, Malaysia.
• Workmen's Compensation Act 1952
  For compensation to foreign workers injured in the course of their employment and to worker's dependents in the event of fatal accident. This Act is administered by the Department of Labour or Jabatan Buruh - Peninsular Malaysia, Sabah and Sarawak.
• Industrial Relations Act 1967
  An Act which governs the relationship between employers and workmen or employees and their trade unions and generally deal with trade disputes. This Act is administered by the Industrial Relations Department or Jabatan Perhubungan Perusahaan, Malaysia.
• Wages Council Act 1947
  This Act is administered by the Department of Labour or Jabatan Buruh - Peninsular Malaysia, Sabah and Sarawak.
• Employment Information Act 1953
  This Act provides the Department of Labour with power to obtain and collect information and data on employment, terms and conditions relating to an employment, from any industries in the private sector. This Act is administered by the Department of Labour or Jabatan Buruh - Peninsular Malaysia, Sabah and Sarawak.
• Employment (Restriction) Act 1968
  This Act is administered by the Department of Labour or Jabatan Buruh Peninsular Malaysia.
• Worker's Minimum Standards of Housing and Amenities Act 1990
  This Act is administered by the Department of Labour or Jabatan Buruh Peninsular Malaysia.
• Weekly Holidays Act 1950
  This Act is administered by the Department of Labour or Jabatan Buruh Peninsular Malaysia.
• Children and Young Persons (Employment) Act 1966
  This Act is administered by the Department of Labour or Jabatan Buruh Peninsular Malaysia.