Proposed Amendments to Employment Act - The Future Landscape of Workplace in Malaysia
Updated: Dec 11, 2021
The Employment (Amendment) Bill 2021 (“the Bill”) to amend the current Employment Act 1955 (“the Act”) was tabled for its first reading on 25.10.2021.
According to the Explanatory Statement in the Bill, the amendment to the Act was seeks to comply with the international standards and practices as required by the Trans-Pacific Partnership Agreement, the Malaysia-United States Labour Consistency Plan and the International Labour Organization.
The “Malaysia – United States Labour Consistency Plan” was entered in 2015 and promised to take steps to reform labour laws to conform with International Labour Standards. However, the reform did not take place quickly. Until currently the Human Resources Minister came out with the Bill to amend the Act.
The Bill contains material amendments to the current Act and among others, is to provide for the protection against discrimination and forced labour, and to provide for maternity benefits. The key changes are as follows:-
Part XIIc - Flexible working arrangement (new)
Due to the pandemic and many businesses shifting from conventional working in the office to work from home and hybrid working model, the Bill introduce a new part XIIc. Where the employee may apply to the employer for a flexible working arrangement to vary hours of work, days of work or place of work.
The employee may apply in writing and the employer shall reply in writing within 60 days whether the application is approved or refused. There is no obligation on the employer to approve every application. However, if the application is refuse, the employer must state the ground for refusal.
MATERNITY AND PATERNITY
S37 – Pregnancy and Maternity
The Bill seeks to increase the maternity leave from the original 60 days to 90 days (in line with government servant). However, the female employee can apply to resume work at any time during the maternity leave if she has been certified fit to resume work by a registered medical practitioner.
S41A - Restriction on termination of pregnant female employee (new)
The Bill also seeks to prohibit termination of the pregnant female employee except for breach, misconduct and close of business. Employer bears the burden to prove termination is not on the ground of her pregnancy or on the ground of illness arising out of her pregnancy.
S60FA – Paternity leave (new)
Under the Bill, the married male employee will be entitled to paid paternity leave for 3 days (up to 5 confinement).
S44A - Application of this Part irrespective of wages of female employee
However, under the Bill, the current section that the maternity protection applies to all female employees regardless of their wages will be deleted. This will have the effect of abolishing maternity protection for female employees who fall outside the definition of employee under the Act.
AWARENESS OF SEXUAL HARASSMENT
S81H – Notice on sexual harassment (new)
The Bill introduce the new section that an employer shall exhibit a notice to raise awareness on sexual harassment at the place of employment.
S81G - Application of this Part irrespective of wages of employee
Under the Bill, the current section that provides for the DG to inquire about sexual harassment to all employees regardless of their wages will be deleted. This will have the effect of abolishing the power of the DG to inquire about sexual harassment for employees who fall outside the definition of employee under the Act.
WORKING HOURS AND SICK LEAVE
S60A - Hours of work & 60C - Shift work
The Bill limit the maximum working hour for employees from 48 hours a week reduce to 45 hours a week.
S60F – Sick Leave
Under the Bill, the total number of days of paid sick leave of aggregate 60 days in a calendar year entitled by the employee will be deleted. As such there will be no limit of paid sick leave entitled by the employee.
Part VIII – Employment of woman
Delete the restrictions on the working hours for women working in industrial, agricultural and underground.
SUPPLY & HIRING OF EMPLOYEES
S33A – Information relating to supply of employees
Currently, under the Act, no written contract is required for supply of employees, the contractor for labour only need to register with DG in prescribed form before supplying the employees.
Under the Bill, a contractor for labour shall enter into a contract in writing and shall make such contract or any other document relating to such contract available for inspection.
S60K - Employment of foreign employee
Currently, the Act only requires employers who employ a foreign employee to furnish the DG with particulars of the foreign employee.
The Bill proposes that for the employer to employ a foreign employee, prior approval from the DG must be obtained.
JURISDICTION OF DIRECTOR GENERAL
S60L – Director General may inquire into complaint
The DG jurisdiction relating to discrimination against foreign employees will be deleted under the bill. The Bill will introduce a new general section for the jurisdiction of DG to inquire into complaints about discrimination under S69F.
S69B to 96E - DG power to inquire
The Bill proposes to delete sections 69B to 69E of the Act.
This amendment appears to remove the jurisdiction of the DG to inquire into complaints between employees and employers where the employees fall outside the definition of employee under the Act. (currently, under the Act, the DG may inquire into complaints between employees and employers provided that the employees’ wages do not exceed RM5,000).
S69F – Discrimination in employment (new)
The Bill introduce the power of DG to inquire into discrimination in employment. However, there is no clear definition for discrimination (whether the discrimination is related to hiring, during employment or dismissal).
S90B – Forced labour (new)
The Bill introduces a section that it will be an offence for any employer who threatens, deceives or forces an employee to do any work and prevents employees to leave their place of work.
NO WRITTEN CONTRACT
S101C – presumption of employee even though no contract (new)
The Bill provides a new section for the presumption as to who is an employee and employer in the absence of a written contract of service, relating to any category of employee under the First Schedule as follows:-
A person is presumed to be an employee—
- where his manner of work or working hours is subject to the control or direction of another person;
- where he is provided with tools, materials or equipment by another person to execute work;
- where his work constitutes an integral part of another person’s business;
- where his work is performed solely for the benefit of another person; or
- where payment is made to him in return for work done by him at regular intervals and such payment constitutes the majority of his income.
A person shall be presumed to be an employer—