THE MALAYSIAN LEGAL ENVIRONMENT

1. THE MALAYSIAN LEGAL ENVIRONMENT

2. THE LEGAL ENVIRONMENT • The employment act 1955 • The children and young persons (employment) act 1966 • The wages council act 1947 • The employees provident fund act 1991 • The workman’s compensation act 1952 • The employees social security act 1969 • The occupational safety and health act 1994 • The factories and machinery act 1967 • The trade unions act 1959 • The industrial relations act1967 • The employment (restriction) act 1968 • Pembangunan sumber Manusia Bhd Act 2001

3. The Employment Act 1955

4. Enforced by the Labor Department • Sets minimum labor standards for workers and seek to protect them from exploitation • Apply to Peninsular Malaysia and the Federal Territory of Labuan only • The employees in East Malaysia is covered under The Sabah and Sarawak Labor Ordinances • Covers • Employees in the private sector earning not more than RM1500 per month • those who work as manual labors, supervise manual labors, operate or maintain machines

5. Areas covered • Contracts of service, • payment of wages, • employment of women, • working hours and holidays, • registers, returns, complaints and inquiries

6. Contract of Service • An agreement whereby one person agrees to employ another as an employee and that the other agrees to serve his employer as an employee • Such agreement can be oral, in writing, express or implied

7. Payment of wages • Every employer shall pay to each of his employees not later than the seventh day after the last day of any wage period the wages, less lawful deductions

8. Employment of Women • no employer shall require any female employee to work in any industrial or agricultural undertaking between the hours often o'clock in the evening and five o'clock in the morning • nor commence work for the day without having had a period of eleven consecutive hours free from such work • No female employee shall be employed in any underground working

9. Maternity Protection • Every female employee shall be entitled to maternity leave for a period of not less than sixty consecutive days • A female employee shall be entitled to receive maternity allowance for the eligible period from her employer if: • she has been employed by the employer at any time in the four months immediately before her confinement; and • she has been employed by the employer for a period of, or periods amounting in the aggregate to, not less than ninety days during the nine months immediately before her confinement.

10. Working Hours and Holidays • Rest day • Every employee shall be allowed in each week a rest day of one whole day • Hours of work • an employee shall not be required under his contract of service to work: • more than five consecutive hours without a period of leisure of not less than thirty minutes duration; • more than eight hours in one day; • in excess of a spread over period of ten hours in one day; • more than forty-eight hours in one week

11. Working Hours and Holidays

12. Holidays, annual leave and sick leave Working Hours and Holidays * 60 days if hospitalized

13. The children and young persons (employment) act 1966 • To prevent the exploitation of child labor • Under 14 yrs – only light work in family’s business • 14-16 yrs • In light work that does not involve the use of machinery; and • A maximum of 7 hrs per day • May not work between 8pm – 6am

14. The Wages Council Act 1947

15. Enforced by the Labor Department • Employees are not organized into unions • Covers 4 sectors • Shop assistants • Hotel and catering industry workers • Port of Penang stevedores • Cinema workers

16. The Employees Provident Fund Act 1991

17. Administered by the Employees Provident Fund Board • To ensure workers have funds available on their retirement • Covers: • All employees in Malaysia (16 years old and above) • Before 1 August 1998: Expatriats and foreign workers are not required to contribute (but can choose to contribute) • After 1 August 1998: Expatriats and foreign workers earning less than RM2,500 are required to contribute.

18. Those who are exempted from making the compulsory contribution are • employees or workers holding Employment Pass or expatriates holding Visit Pass (Temporary Employment) whose monthly wages is not less than RM2,500 • Thai workers who enter Malaysia with a Territorial Pass • Seamen • Foreign domestic maids • Self-employed persons • Out-workers who do cleaning and alteration repair works • Persons detained in custody, in prison, Henry Gurney School and mental hospital • Pensioners

19. Contributions

20. Members’ Account: 3 separate accounts • Account 1 (60%): for pension • Account 2 (30%): for purchase of house and computer • Account 3 (10%): for medical costs

21. The Employees Social Security Act 1969

22. Enforced by the Social Security Organization • To provide protection to workers who may be involved in an accident at work or who contract some occupational disease • For employees in the private sector who earns less than RM3000 per month • An employee must be registered with the SOCSO irrespective of the age. • The principle “ once in, always in”

23. Nevertheless, SOCSO does not cover the following categories of persons : • A person whose wages exceed RM3,000 a month and has never been covered before. • Government employees. • Domestic servants employed to work in a private dwelling house which includes a cook, gardeners, house servants, watchman, washer woman and driver. • Employees who have attained the age of 55 only for purposes of invalidity but if they continue to work they should be covered under the Employment Injuries Scheme. • Self-employed persons. • Foreign workers.

24. An insured person or dependants will be entitled to the following benefits : • Periodical payments in the case of invalidity • Periodical payments in the case of disablement suffered as a result of an employment injury • Periodical payments to the dependants of an insured person who dies as a result of an employment injury • Payments for funeral benefit or expense on the death of an insured person as a result of an employment injury • Periodical payments to an insured person who is in receipt of invalidity pension or disablement benefit and is so severely incapacitated or disabled as to require the personal attendance of another person • Medical treatments for the attendance on insured persons suffering from disablement • Periodical payments to dependants of an insured person who dies while in receipt of invalidity pension

25. SOCSO provides coverage to eligible employees through 2 schemes namely • Employment Injury Insurance Scheme • Invalidity Pension Scheme. • These schemes are classified into 2 categories : • First Category - Employment Injury Insurance Scheme and Invalidity Pension Scheme. The contribution payment is made by both the employer and employee • Second Category - Employment Injury Insurance Scheme Only. The contribution is paid by the employer only. An employee who is not eligible for coverage under the Invalidity Pension Scheme is protected under this category. • These schemes provide the benefits of invalidity pension, invalidity grant, survivors pension, rehabilitation, funeral benefit, constant attendance allowance and educational loan.

26. The Workman’s Compensation Act

27. Enforced by the Labor Department • To provide compensation to workers who have accidents at work or who contract employment-related diseases. • Covers: • Foreign workers earning less than RM 500 per month • Employers must take out an insurance policy to cover liability under the act.

28. The Occupational Safety and Health Act 1994

29. Gazetted on the 25 February 1994 by the Malaysian Parliament. • Enforced by the Department of Occupational Safety and Health • To ensure safety at the workplace • Carry out inspections at workplaces • Organize promotional activities • Assist government departments with technical expertise • Carry out activities aimed at improving safety and health

30. Applied to the following sectors • Manufacturing • Mining and Quarrying • Construction • Agriculture, Forestry and Fishing • Utilities: • Electricity; • Gas; • Water; and • Sanitary Services • Transport, Storage and Communication • Wholesale and Retail Trades • Hotel and Restaurants • Finance, Insurance, Real Estate and Business Services • Public Services and Statutory Authorities

31. General duties of employers and self-employed persons to their employees • the provision and maintenance of plant and systems of work that are, so far as is practicable, safe and without risks to health; • the making of arrangements for ensuring, so far as is practicable, safety and absence of risks to health in connection with the use or operation, handling, storage and transport of plant and substances; • the provision of such information, instruction, training and supervision as is necessary to ensure, so far as is practicable, the safety and health at work of his employees; • so far as is practicable, as regards and place of work under the control of the employer or self-employed person, the maintenance of it in a condition that is safe and without risks to health and the provision and maintenance of the means of access to and egress from it that are safe and without such risks; • the provision and maintenance of a working environment for his employees that is, so far as is practicable, safe, without risks to health, and adequate as regards facilities for their welfare at work.

32. General duties of employees at work • to take reasonable care for the safety and health of himself and of other persons who may be affected by his acts or omissions at work; • to co-operate with his employer or any other person in the discharge of any duty or requirement imposed on the employer or that other person by this Act or any regulation made thereunder; • to wear or use at all times any protective equipment or clothing provided by the employer for the purpose of preventing risks to his safety and health; and • to comply with any instruction or measure on occupational safety and health instituted by his employer or any other person by or under this Act or any regulation made thereunder.

33. The Factories and Machinery Act 1967

34. Gives protection in terms of health and safety for all workers working in factories regardless of sex • The jurisdiction of the act covers all factories

35. The Trade Unions Act 1959

36. Administered by the Trade Unions Department • Permitting workers to form and join trade unions provided these are registered organizations • Provides: • The procedures for applying for registration, the use of union funds, the rights and liabilities of unions, and other matters relating to the constitution of unions

37. The Industrial Relations Act 1967

38. Enforced by the Industrial Relations Department • To provide systems which will encourage industrial harmony • Is applicable throughout Malaysia and provides for the regulation of relations between employers and workmen or employee and their trade union and the prevention and settlement of trade disputes. • Emphasizes on direct negotiation between employers and workmen or employees and their trade unions to settle their differences and to regulate their collective relationship

39. The Industrial Relations Act 1967 • Protects the legitimate rights of employers and workmen or employees and their trade unions. • provides the procedure relating to submissions of claims for recognition and scope and representation of trade union and collective bargaining • Does not allow matters relating to promotion, recruitment, dismissal, transfer, retrenchment, reinstatement and allocation of duties and prohibition of strikes and lockouts over any of these matters to be included in the proposal for collective bargaining • provides for speedy and just settlement of trade disputes by conciliation or arbitration where direct negotiation fails • provides the power to the Ministry of Human Resources to intervene and to refer at any stage any trade dispute to the Industrial Court for arbitration

40. Non-Malaysian citizens are required to obtain a valid work permit before they can be employed locally. The employment (restriction) act 1968

41. Human Resources Development Bhd Act 2001

42. To ensure employers conduct training for their workers so as to upgrade their skills and abilities • Enforced in January 1993 • Led to the establishment of the Human Resources Development Fund (HRDF) • Administered by the Human Resources Development Council (HRDC).

43. Currently, the categories of employers covered under the Act are as follows • Employers with 50 employees and above in the manufacturing sector • Employers with 10 to 49 employees and a paid-up capital of RM2.5 million and above in the manufacturing sector

44. Employers with 10 employees and above in 20 selected industries in the services sector, namely, the hotel industry, tour operating business (in-bound tour only), shipping, air transport, telecommunication, computer services, advertising, postal & courier services and freight forwarding (w.e.f. 1 January 1995); private higher education, training and the energy sector (w.e.f. 17 February 2000); and direct selling, port services, engineering support & maintenance services, research & development, warehousing services, security services, private hospital services and hypermarkets, supermarkets & departmental stores.For hypermarkets, supermarkets and departmental stores, only employers with 50 employees and above are required to register • Employers in the manufacturing sector with 10 to 49 employees and a paid-up capital of less than RM2.5 million are given the option to register with PSMB

45. Manufacturing companies contribute as follows: