CHAPTER 3

LAWS RELATING TO BASIC BENEFITS AND

TERMS OF EMPLOYMENT (part A)
SCOPE OF THE LAWS
EMPLOYMENT ACT 1955
Methods of Enforcement
Inspection
2.Investigation into complaints
3.Make decision on employees claims
4.Answer queries on labor legislations
5.Prosecution
 Labor Court
Under the EA 1955 , an employee has the right to bring certain complaints to
the attention of the Department of Labor.
The types of claims heard include:
Termination benefits
Maternity benefits
Overtime payments
Sick pay
Annual leave pay
Public holiday pay
SCOPE OF THE EMPLOYMENT ACT(Source of reference: First
Schedule)
SCOPE OF SABAH LABOUR ORDINANCE(Schedule
Subsection (2) of Section 2)
SCOPE OF SARAWAK LABOUR ORDINANCE(Schedule
Subsection (2) of Section 2)
SCOPE OF SARAWAK LABOUR ORDINANCE(Schedule Subsection (2) of Section 2)
DEFINITION OF WAGES
wages is basic wage sand all other payment in cash except for __________________________________.
[Source: Section 2 of Employment Act, 1955]
In addition, wages also does not include:
1.Commissions
2.Subsistence allowance (COLA)
3.Overtime payment
[Source: First Schedule of Employment Act]
DEFINITION OF MANUAL LABOUR
Any person who, irrespective of the amount of wages he earns in a month, has entered into a contract of service
with an employer in pursuance of which-
(1)he is engaged in manual labor including such labor as an artisan or apprentice:
Provided that where a person is employed by one employer partly in manual labor and partly in some other
capacity such person shall not be deemed to be performing manual labor unless the time during which he is
required to perform manual labor in anyone wage period exceeds one-half of the total time during which he
is required to work in such wage period

[Source: First Schedule of Employment Act]

Remark 1
Ahmad is working as a clerk in Zest Sdn. Bhd. in Shah Alam. His wages is RM1,500 per
month. Is he under the scope of Employment Act?
Raju is working as a bus driver in Perak. His wages is RM2,100 per month. Is he under the
scope of Employment Act?
Employees right to unionize[s.8]
Nothing in any contract of service shall in any manner restrict the right of an employee
who is a party to such contract-
(a)to join a registered trade union;
(b)to participate in the activities of a registered trade union, whether as an officer of
such union or otherwise; or
(c)to associate with another persons for the purpose of organizing a trade union in
accordance with the Trade Unions Act 1959 [Act262].
TERMINATION OF CONTRACT
Notice of Termination [S.12]
Remark 2
Is it possible for either an employer or an employee to terminate the
contract of service without giving notice?
It is possible to terminate the contract of service without notice:
a. by paying to the other party an indemnity in lieu of notice.
b. if there is a willful breach by the other party of a condition of the
contract of service.
Indemnity in Lieu of Notice [S.13]
Without proper notice, employee owe employer an indemnity and vise
versa.
The indemnity is equal to the wages that would have been paid during
notice period.
Remark 3
Dalbir is working for TVB Bhd. She is under the scope of Employment Act.
After 5 years working for a company, she wants to resign. How much notice
she shall provide to her employer?
Termination of Contract for Special Reasons [S.14]
An employer may, on the grounds of misconduct inconsistent with the fulfilment of the express or
implied conditions of his service, after due inquiry-
(a)dismiss without notice the employee;.
Breach of Contract [S.15]
Employer fails to pay wages in accordance with Employment Act.
Employee has continuously absent from work for more than two consecutive working days
without prior leave from employer, unless she has reasonable excuse and has informed or attempted
to inform his absent
Payment of Wages
[S.18] Wage period.
Maximum wage period is one month.
[S.19] Timing.
Payment must be not later than seven days after last day of wage period.
[S.25] Mode.
Payment must be in legal tender or with written permission of employee (which must not be
unreasonably with held),by way of direct credit into a bank account or cheque.
Advances of wages [S.22]
Deduction from wages [S.24]
No permission is required to deduct
wages if
Written permission of employee is required if
Written permission of employee and DGL is required if

Written permission of employee and DGL is

required if
Limitation to deduct wages
Wages not payable [S.23]
Payment of wages on termination [S.20 &
S.21]
Formula to calculate wages
EMPLOYMENT OF WOMEN
Female & night work [S. 34]
No employer shall require any female employee to work in any industrial or
agricultural undertaking between 10:00pm to 5:00am.
Exemption on [S. 34]
Currently the Department of Labor exempts all employer from Section 34 but
under certain condition:
1.Provide transportation
2.Pay shift allowance
3.Rotating shift
4.Appropriate action to ensure safety of female employees.
Female & Underground Work [S. 35]
No female employee shall be employed in any underground working.
Female & Maternity protection [S. 37]
What is Maternity Leave?
What is Maternity Allowance?
Maternity Leave (ML)
Female employees are entitle to 60days (calendar month) leave for EVERY confinement.
May start maternity leave up to 14 days before her expected confinement provided certified by
appointed doctor.
The latest to start ML is on the day she gave birth.
Maternity Allowance
Conditions for entitlement:
1. Must not have 5 or more than 5 surviving children at the time of her confinement;
2. Must be employed at any time in the four months immediately before her confinement; and
3. Must have worked at least 90 days for the employer during her pregnancy.
EXAMPLE FOR CONDITION 2
EXAMPLE FOR CONDITION 3
Remark 4
What are the maternity benefits provided for female employees under the Act?
Every female employee is entitled to maternity leave for a period of not less that 60
consecutive days (the eligible period) and maternity allowance in respect of the eligible
period. QUESTIONS .
How is maternity allowance calculated?
Maternity allowance is based on her monthly wages if she is employed on a monthly
rated of pay. Otherwise the maternity allowance is the ordinary rate of pay for one day or
RM6.00 per day whichever is higher for 60 consecutive days.
When should maternity allowance be paid?
Maternity allowance shall be paid in the same manner as if such allowance were wages
and are payable not later than the seventh day after the last day of any wage period.
Hours of work [S.60A]
Spread over period of ten hours
 Hours of work [S.60A]
Minimum 30 minutes break after 5 hours work.
Exception: DG may exempt the provision of hours of work due to nature of
business operation.
Is lunch break working hour?
[S.60A(9)] hours of work means the time during which an employee is at
the disposal of the employer and is not free to dispose of his own time and
movements.
For the normal work limit of 8hours / day, where the number of hours of
work on one or more days of the week is less than 8, the limit of 8 hours
maybe exceeded on the remaining days of the week.
However, it should not exceed 9hours / day o r48hours / week.
Hours of work [S.60A]
In case of overtime work(OT), maximum working hour is
12 hours per day(inclusive of overtime).
Maximum OT per month is 104 hours.
OT Definition
[60A(3)(b)] overtime means the number of hours of work
carried in excess of the normal hours of work per day.
Remark 4
Is there any restriction on the overtime hours that an
employee could work in one month?
An employee should not be required to work overtime
exceeding a total of 104 hours in a month
 Rest Day & Public Holiday
One day per week.
Minimum 30 hours per week for shift workers.
Employer must put up roster or notice if irregular rest day
DG is empowered to permit rest day to be granted on any day of the month.
Remark 5
Is an employee entitled to rest day benefit during maternity leave or
temporary disablement (under SOCSO)?
An employee shall not be entitled to rest day benefit during maternity leave or
temporary disablement under the Workmen's Compensation Act, 1952 or under
the Employees Social Security Act, 1969.
How should an employee who is required to work on a rest day be paid?
An employee who is required to work on a rest day shall be paid one additional
day wages at his ordinary rate of pay.
Employers right to order work on rest day [S.60A(2)]
Public Holiday [S.60D]
11 gazette public holidays per year
However, 4 days are compulsory:
1.Independence Day
2.LabourDay
3.AgongsBirthday
4.State Ruler's Birthday or Federal Territory Day
5.________________
Sabah Labor Ordinance
Minimum Public Holiday is any ___ days per year
Sarawak Labor Ordinance
Minimum Public Holiday is any ___ days per year
Employers rights to order work on public holiday
[S.60D(3)]
Employee maybe required by employer to work on public holiday.
Question:
Can an employer order an employee to work on all public holidays
for the whole year?
Remark 6
How should an employees who are required to work on holidays
be paid?
An employee who is required to work on holiday shall be paid two
additional days wages at his ordinary rate of pay.
ANNUAL LEAVE AND SICK LEAVE
Annual Leave [S.60E]
The entitlement depends on employee's length of service
i. 8 days for ___________________
ii. 12 days for __________________
iii.16 days for __________________
The rights for AL is only after complete 12 months of service.
The timing of which Annual Leave can be enjoyed by employee is subject
to employer's timing.
If employee did not apply for Annual Leave(for the whole year),the rights
for Annual Leave will be forfeited.
Question: Can employee carry forward annual leave
EXAMPLE
Annual leave is earned through continuous service and must be taken not
later than 12 months after the end of every 12 months continuous service
which earned the leave.
An employee working from 1 January 2010 to 31 December 2010 earns 8 days
of annual leave.
Thus, the annual leave must be taken before 31 December 2011.
Annual leave not taken during this 12 months period maybe forfeited.
Remark 7
 Sick Leave [S.60F]
The entitlement of Sick Leave are:
i.14 days for __________________
ii.18 days for __________________
iii.22 days for __________________
In case of hospitalization, sick leave entitlement is 60 days per year. The
rights for Sick Leave is only if employee certified sick by registered doctor.
Which registered doctor shall certify that employee is sick?
If employer has appointed panel doctor, the certification must be from
panel doctor, except when the service of the panel doctor not available or
in medical emergency.
If employer has not appointed any panel doctor, the certification can be
from any doctor, including from the government.
Who will pay for the doctor?
An employee shall, after examination at the expense of the
employer.[S.60F(1)]
Remark 8
What are the circumstances under which an employee is not entitled to
sick leave pay?
An employee is not entitled to paid sick leave during maternity leave or for any
period during which he/she is receiving periodical payments under Workmen's
Compensation or SOCSO.
RATES OF PAY
Rates of Pay (only for monthly rated employees)
Rates of pay for overtime done on normal working hour is 1.5 times hour rate of
pay.
EXAMPLE 1 : OT
EXAMPLE 2 : OT

EXAMPLE 3 : OT
Rates of Pay (only for monthly rated employees)
Rates of pay for work done on Rest Day.
For less than half normal working hour, rate of pay is half day pay.
For half normal working hour and up to normal working hour, rate of pay is
one day pay.
What is the rate of pay for work done for more than normal working hour?
EXAMPLE 1: REST DAY
EXAMPLE 2 : REST DAY

Rates of Pay (only for monthly rated employees)

Rates of pay for work done on Public Holiday.
Up to normal working hour, rate of pay is two days extra wages.
What is the rate of pay for work done for more than normal working hour?
EXAMPLE 1: PUBLIC HOLIDAY

EXAMPLE 2 : PUBLIC HOLIDAY

EXAMPLE 3 : PUBLIC HOLIDAY