What Employers, HR Department & Employees Should Take Note on The Employment (Amendment) Act 2022?
Previously and prior to 01.01.2023, the Employment Act 1955 is the main legislation governing the relationship between employers and employees in Peninsular Malaysia only, in which the Act shall only be applicable for employees who receive the monthly wages/salaries of RM2,000.00 and below (as well as other specified categories of workers). Meantime, employees with monthly wages/salaries above RM2,000.00 are governed by the terms and conditions prescribed under the contract of service with their respective employers.
And now, amendments to the First Schedule of the Act means that all employees are covered and governed equally under the Employment (Amendment) Act 2022 effective from 01.01.2023. However, employees with the monthly wages/salaries of RM4,000.00 and above are exempted from certain provisions in the Act as below and the same shall be referred to the terms and conditions prescribed under the contract of service with their respective employers: –
|Provisions Under Employment Act 1955
|Employees work on rest day
|Overtime work carried out in excess of the normal hours of work
|Allowance for shift-based work
|Overtime On Public Holidays
|Overtime For Half Working Days On Holidays
|Termination, Lay-Off And Retirement Benefits
What are the Key Amendments Pursuant to Employment (Amendment) Act 2022?
Basically, the Employment Act 1955 is amended in line with recommendations made by the International Labour Organization (ILO). The key amendments include the following: –
|Provisions Amended Under Employment Act 1955
|Section 18A – Calculation of Wages For Incomplete Month’s Work
|Monthly wages / Number of days of the particular wage period x Number of days eligible in the wage period
|Section 41(A) – Restriction On Termination Of Pregnant Female Employee
|It is an offence for employers to terminate the services of the employees when a female employee is pregnant or is suffering from an illness arising out of her pregnancy, except due to the following reasons: –
(i) Wilful breach of condition of the contract of service
|Section 37 – Maternity Leave
|The paid maternity leave increases from 60 days to 98 days.
|Section 60FA – Paternity Leave
|A married male employee is entitled to a paid paternity leave for a period of seven (7) consecutive days in respect of each confinement provided that the male employee has fulfilled the following conditions: –
(i) He has been employed by the same employer at least twelve (12) months immediately before the commencement of the paternity leave;
(ii) He has notified his employer of the pregnancy of his spouse at least thirty (30) days from the expected confinement or as early as possible after the birth.
|Section 60A – Hours Of Work
|The working hours is reduced from the maximum of 48 hours to 45 hours per week.
|Section 60K – Employment Of Foreign Employee
|Employers shall obtain prior approval from the Director General before employing a foreign employee.
|Section 60KA – Termination Of Employment Of Foreign Employee
|The Employer shall inform the Director General of any termination of the foreign employee within thirty (30) days of the date of termination of service.
|Flexible Working Arrangement
An employee may apply to an employer for a flexible working arrangement to vary the hours of work, days of work or place of work in relation to the employment.Section 60Q
The employee shall apply for flexible working arrangement in writing and the employer shall within sixty (60) days approve or refuse the application; in case of a refusal, the employer shall state the reasons for such refusal.
|Section 69F – Discrimination In Employment
|The Director General has the right to inquire into and decide any dispute between an employee and his employer in respect of any matter relating to discrimination in employment; and the Director General has the power to make an order to such a decision.
Any employer who fails to comply to the order granted by the Director General shall be liable to a fine not exceeding RM50,000.00.
|Section 81H – Notice On Sexual Harassment
|An employer shall exhibit conspicuously a notice to raise awareness on sexual harassment at the place of employment.
|Section 87A – Court Order For Payments Due To Employee
|The court may order an employer who commit an offence relating to the payment of wages to be payable to the employee; failure which the distress proceeding or a fine may be executed against the employer.
|Section 90B – Forced Labour
|Forced labour is an offence and shall be liable to a fine not exceeding RM100,000.00 or imprisonment for a term not exceeding two years or both.
|Section 99A – General Penalty
|Any person who commits any offence under the Employment (Amendment) Act 2022 shall be liable to a fine not exceeding RM50,000.00.
(Increased from RM10,000.00 to RM50,000.00)
|Section 101C – Presumption As To Who Is An Employee And Employer
|This section covers the presumption as to who is an employee an employer in the circumstances where there is no written contract between both parties.
An individual shall be considered as an employee to his employer if:-
(i) His manner of work is subject to the control or direction of another person;
In view of the above, employers should be more vigilant to review the employment contract between the employers and the employees prior to the implementation of the Employment (Amendment) Act 2022. Meantime, employees should also take note of the above if the employees encounter or facing any problem from their employers.