The labour and employment in Malaysia are governed by a set of laws and acts. Here are five of them you may want to know, explained in simplified terms:
1. Employment Act 1955
The Employment Act 1955 is the main legislation which applies to employees residing in Peninsular Malaysia and Federal Territory of Labuan earning salary not exceeding RM1,500 per month.
Those whose salary range between RM1,500 and RM5,000 can seek consultation on their terms and conditions of employment with the Labour Court, in case of seeking justice, or submitting inquiries.
2. The Labour Ordinance, Sabah and Sarawak
The Labour Ordinance is considered the Employment Act of Sabah and Sarawak. A lot of similarities, with some differences.
3. Industrial Relations Act 1967
The enactment of the Industrial Relations Act 1967 is in recognition of the importance of good labour relationship between the workers and the employers. The principles of trade unionism and collective bargaining are embodied in the provision of the act. The act also established a framework to settle trade disputes between employee union and the company.
4. Employee Provident Fund Act 1991
The act makes it compulsory for employers who do not offer pension scheme to make compulsory contribution to their worker’s Employee Provident Fund (EPF) account. The common applicable rate of contribution is as follows:
- Employers – Min 12% of the employee’s monthly salary
- Employee – Min 11% of the employee’s monthly salary
5. Employee’s Social Security Act 1969
This is where SOCSO contribution comes into place. The act streamlines two social security schemes for workers, which are the Employment Injury Insurance Scheme and the Invalidity Pension Scheme. The two schemes provide medical coverage and financial protection in terms of disablement or death rising from workplace injury.