Labour and Employment Laws in Malaysia

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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.

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68 thoughts on “Labour and Employment Laws in Malaysia

  1. Pingback: Malaysia Employment Laws To Be Amended | SKORCAREER

  2. mr saygon

    sir/ma’am

    im an employee of marriott hotel, subcontracted by mashita jaya, and im a foreign worker, just want to inquire if we foreign worker are not entitled to your malaysian law benefits like Public HOlidays, MC etc. if our contract w signed are againts your law, we work 10 hours a day and our salary net rm 10000. is theres a justice on our behalf, i hope to hear from you, thank you very much

    Reply
  3. Lim

    Hi, i wish to enquiry about my salary matter. I am a contract staff. A represent my basic salary. B represent my monthly bonus due to company achievement.
    Based on the contract, taking unpaid leave deduction is Basic salary / 24 x unpaid leave(days) . I was taken 4 days unpaid leave in contract period. HR use calculation A+B / 24 x unpaid leave(days). This is the deduction from my pay slip.
    In the same pay slip, i was entitled to get 1 day replacement leave refund which is the calculation is Basic salary / 30 x replacement leave which not taken(days). HR use calculation A / 30 x 1 day.
    I wish to ask why in the same pay slip, for the deduction, HR plus my monthly bonus but for the refund part HR din’t plus the monthly bonus. Is it got this kind of Clause to protect this kind of scenario. TQ

    Reply
  4. KT

    Dear Sir,

    I am a Manager in a public listed company. Due to the recent economic turmoil, my employer do have the plan to downsize the organisation. Of late, we heard that they will transfer us to other outlets which requires Managers but the other outlets would be in another state. Knowing well that if we are transfered to other states we will tender our resignation(probably it is their way of not offering VSS as it is a very reputable name in themarket).

    I hope that you would be kind enough to give some advice if we MUST adhere to the instructions. FYI, I actually accepted this offer and that is why i relocated to my current location meaning that if i were to move additional relocation cost will incurred for me.

    Thanks.

    Reply
    1. Zul Post author

      The decision for transfer is mostly likely associated to the company’s business direction – if the move seems justify, then try to understand the situation. However, a company cannot simply instruct an employee to accept a transfer – it must be done via a mutual agreement. In other words, it must be win-win.

      The ‘Knowing well that if we are transferred to other states we will tender our resignation’, can lead to Constructive Dismissal, a situation where an employee is forced to resign due to circumstances created by the employer.

      My opinion is to get advice from a local labour/industrial office and see if you can build a case against them.

      Reply
  5. patricia

    i’m a diploma graduated pharmacy student…& i’ll will be started working soon….i fefused 2 sign contract at the place…& they only regards me as a temporary staff..will i be eligible for the Employee Provident Fund (EPF) ?

    Reply
  6. Joey

    I’m contract staff transfer from Singapore to Malaysia but my contract due on 31 December 2008. It’s mean i didn’t tied with contract from 2009. Last month my company inform me that they need to restructure my basic salary drop to 40%. I can choose either to accept or reject. If i reject, they will compesate me 3 month of my basic salary. And in the end, i decide to reject the offer. But they would terminate my 18 days annual leave. As they said, company got the right do not compesate me any cents because me myself who reject the offer and i’m not their contract staff anymore.

    Are they hold the right to terminate my annual leave? If i entitle for the annual leave paid, what is the formula for the annual leave paid day?

    Thanks

    Reply
  7. ivy

    i was directly hired last nov 2008 and i come malaysia nov 8,2008
    i work as waitress, bartender,cashier, office and in laundry also i do stocks for the nail parlour and in restaurants. the boss deduct my salary monthly but they dont do my working permit. i only receive rm100,rm300 plus due to the said work permit. give me off day just once a month. i have just take off day may and my last off day in june 26,’09 but unluckily i was caught by immigration officer and i was jailed for almost one month over. i just come back in the philippines this august 4. they send my last salary last week but already cut again because they just come once to visit me in the jail. i want come back again in malaysia but in legal process!!!

    Reply
    1. suhaila

      hi alex. i may be able to help u but i need some details. for example, what about public holiday that bothers u?

      Reply
  8. BRUNO

    I am working five days in a week.Saturday and Sunday is off/rest day.
    My question is If Public Holiday falls on Saturday does the company need to replace the day additional with annual leave or other substitude or PH is not consider for replacement for Saturdays – if the labour law say so.
    Please code / under line under which clause the labour law given such provision.
    This year 2010 many PH falls on Saturdays. The company which my friend working for has been granted replacement for PH on Saturdays. Thank you

    Reply
      1. BRUNO

        Is there any difference for off (Sat) and rest (Sun) days?
        As such if the Public Holidays falls on Saturdays you mean the company has the right to replace it or additional Annual Leave granted.
        Or the HR dept / manager has the own way of doing it
        Does the company has to abide with M’sian Employers Federation strictly and the benefit of employee not to be neglected. Thank you

        Reply
        1. Zul Post author

          Perhaps it’s best to discuss the company’s policy with the HR. If it doesn’t sound favorable, you may get advice from the nearest labour/industrial office.

          Reply
    1. suhaila

      According to Employment Act, compulsory one ‘Rest Day’ in a week. and if you only work 5 days in a week (means 2 days u dont work) the rest day falls on the later day (section 59(1) of EA). this means, your saturday is NOT defined as rest day. your sunday IS defined as ‘rest day’.

      subsequently, if public holiday falls on sunday only employer replace the public holiday becasue according to Section 60D (1) of EA, employer must replace public holiday which falls on ‘rest day’. Since saturday is NOT defined as ‘Rest Day’, thus not compulsory for employer to replace Public Holiday falls on Saturday.

      Reply
  9. BRUNO

    Please give me the contact number of the nearest labour office in Johor bahru so that i can have a clear picture in black n white

    Thank u

    Reply
  10. Clair

    I started employment as sales manager in August 2009, according to my Letter of Appointment, I am entitled to commission. However I have not received any commission despite having met the minimum criteria to claim and despite several courteous request. I have even agree to take up extra responsibilites not within my job scope. But I believed I have been patient enough, yet now the management is claiming that unconfirmed staff are not entitled to commission. Now I am overwhelmed with expenses & debts inccured for repairs to my car and for a new aparment, supposedly to be paid for by commissions owed to me. In view of that, I have to accept another job offer which require me to start immediately. So these are my options:
    1. resign giving 24 hr notice, therefore giving the management grounds to forfeit any commission owing to me as well as bonus
    2. resign without notice and take legal action against company for breach of contract
    Please advice on the best possible way. I have no intention to continue my service in this present company as they are dishonest.

    Reply
    1. Zul Post author

      A sensible approach might be something in between, but it’s not easy to determine without seeing the proper documentations etc (e.g. if the commission is not backed by papers, then things might be difficult).

      I’d suggest for you to bring all the relevant agreements, memos, claim forms etc that can substantiate your being victimized by the company to the labor office to see if there’s any legal course you may pursue.

      Reply
    2. suhaila

      I agree with Zul. Plus if your wages (excluding commission) not more than RM5000 per month, the labour department is in power to help you on your issues provided you have documentations on your claims.

      Reply
  11. jerry

    my last day is last feb.25 but untill now they didnt give me my pasport.i want to go back home coz i dont have enough money here.can you help me please,,

    Reply
  12. Joanna

    Hi! My question is this company has offer me a job and and offer letter has been emailed over to me. I have signed & faxed it back to the employer. I have told the employer to faxed it back to me with the proper signatory from their side but they didn’t as they said it’s official since they have emailed over to me.

    Unfortunately, when i’m suppose to start work on the following Monday the employer called on Thursday stating they are facing some problem and i can’t be hired. My question is can i take emails as an evidence to file a report to this?

    Kindly advice and thank you

    Reply
  13. Sri

    Hi, If the employee taking leave without any reason and no any information from them within the 8 hrs(working time), what should the employer can do. It is the employee can decuct the salary with double.

    Reply
  14. sj

    Hi, I would like to know about unpaid leave calculation. My staff wish to take 2 weeks continuous unpaid leave by end of May 2010. The question here is should I deduct it as 10 days unpaid or 14 days unpaid? Weekend should not be counted as pay when he is taking unpaid leave 2 weeks one stretch??

    Looking forward to your kind advise. Thanks.

    Reply
    1. Zul Post author

      If he’s paid monthly, I think the sensible thing is to divide the monthly salary into two. This is a personal opinion; prob not 100% correct.

      Reply
  15. angela constantine

    hai,i used to work for this company as a DJ(disc jockey)and i signed the agreement letter.just 3 days ago i quit my job and give a 24 hour notice.after i got my salary,the management ask for the money back,saying that i have disobey the agreement and they want to hold my salary.the reason is because i didn’t give a 2 weeks notice of resignation.i didn’t give my salary back because i feel really confused when i only wanted to quit and keep my salary.
    i need your advice on any labour law that can protect me.
    thank you.

    Reply
  16. june

    i am currently working for company A . but now i was ask to do work related to another company (company B) which was a ” sister company” of my company . is this against MSIA labour rules ?

    Reply
  17. Mimi Lim

    Dear Sir,

    May i know what is the compensate rate if i already work for my company over 12 years with suddenly wind up this end of May 2010? Morover my boss didn’t inform me that they have a planning to close their business.

    Pls advise.
    Thank you.
    Best Regards,
    Mimi Lim

    Reply
  18. Chong

    Peson in charge,

    Hi, i wish to get your advise on salary calculation as mentioned below:-

    Format of salary calculation:-

    (1) Allowance of salary?
    Salary = Basic X No days/26 days?

    (2) Deduction of salary?
    Salary = Basic X no days / 30 or 31 days(depend
    in which month)?

    Kindly advise accordingly.

    Thank you

    Regards
    Chong

    Reply
    1. benjamin chung

      1. How to calculate overtime for monthly rated staff in Sabah? Say, for instance, a clerk earning $1,200/- per month, what is the rate per hour?

      2. In the same case above, if he works in a public holiday, how much he is entitled to get? Is it the sme amount as on Sunday?

      Reply
  19. Navender Kaur

    Hi, I wish your advice on this below issue.
    I worked as a full timer for one of the giantic telco company in Malaysia as a Customer Care Consultant and in I converted to their part time position begining July 1st.
    However in mid May, I met in an accident and has been on medical leave since then.
    Currently am done with my doctors and am purely on Physiotherapy wherby my therapist does not issue MC’s however has certified that am only able to be back to work by end Aug.
    I have requested for Unpaid Leave till then from my employer however they rejected my request with justification that others may just want to follow the same if granted to one.
    my concerns are, how many would fracture their bones and have ligament surgeries just to apply unpaid leave – its so ridiculous.
    secondly, if am not granted this leave, my only options are to resign because the employer was not considerate enough to grant a time frame leave to an employee who is willing to go on Unpaid.
    I truly feel this is unfair as am not fit to work yet and the employer is demotivating an honest and ill employee.
    How can I protect my rights in this situation?
    Thank you.

    Regards,
    NK

    Reply
  20. Shagi

    Good day!

    I wish to get your advice on as mentioned below:-

    I am working in private sector, working hours 9am -5.30pm (Mon-Fri) 9am -1pm (Sat). is it working hours rule?

    16 Sep (National Public holiday) in my office didn’t declare.. Do we entitle to get triple pay? Because they were saying in labour office said it’s not so important.

    Reply
  21. caydence

    Good day Sir/Mdm,

    My company has planned a company trip and registered my name for it before I tender my resignation. The trip is scheduled after end of my termination notice. Now my employer intend to deduct the price (full amount) they paid for the trip package from my salary since I had resign. This is my first job, with my current salary, the amount is quite much for me. Do they have the right to do so? Or am I in a very disadvantage position and should just accept the deduction?
    Appreciate if you could give me an advice if there is anything I can do.

    Need your kind assistance. Thanks in advance..

    Reply
  22. christine

    Hi, my staff took mc on labour day, does he entitle for addition 1 day of public holiday since i have paid him mc as working day and receipt of mc is claimed?

    Reply
    1. suhaila

      yes. under section 60D(1B) of employment act provided your employee under the scope of the law. for example, if his / her wages not more than RM1500 per month if he / she in peninsular malaysia.

      Reply
  23. jessie

    Hi, my employer added a clause “you’re not to terminate within 365 days” in the appointment letter, confirmed straight away from day 1 of work, the 1 yr clause was not on a separate contract, verbally he’s told me i need to reimburse training fees and i have not been trained yet so if i’m to leave before 365 days, will they be able to sue me if I serve my notice

    Reply
  24. Kinky

    hi, my company organize a company trip to Bei Jing and trying to deduct my annual leave for the trip. Is this reasonable?

    Reply
  25. Pritam

    Dear Sir,
    1.
    I am a Malaysian was transfered from Singapore to Malaysia to work. I did enquire from my management while employed in Singapore for my accomodation and was told that this is my base and have to find my own place.
    About two years ago I was transfered to KL to work and I did aske for my accomodation – now I am told that this is my homw and I have to get my own place.
    Where as ther are malaysians hired in KL being paid housing allowances. Why not me just because I am a junior staff

    2.
    I was on a pay that entitles over time till a pay of Singapore currency pay of 8,000.00
    The management worked out a pay package that is acceptable but when it come’s to over time you are just given hour to hour off.
    If a week end you have to work on a Sat or Sun – you really cannot go anywhere – in material of the hours worked – i feel that if it is a Sat or normal week days from Mom to Fri – it should be at 1 1/2 or on a Sun it should be double the hours. Afterall your weekend is spoilt if I am called to work and my job is an essential service.

    The depart my company provides the service the staff there are given 1 1/2 time from Mon to Sat and Sun they get 2 times – and this is a goverment department also an essential service.

    I would very much appreciate if you could explain as to what my situation is.

    Thakk you,

    Pritam

    Reply
    1. suhaila

      firstly, the law (employment act) only cover those wages RM1500 per month and below except manual labour & driver. IF they are under the scope of the law, u must pay only for diagnose but not for medication.

      Reply
  26. SK Chew

    Good day Sir/Mdm,

    Hi, i have plan to set-up new before and after school centre but could anyone advice me if i set the working time as follows is it an offence:-

    Monday – Friday
    From 8am – 6pm
    Lunch hour 1 hour
    Tea break 1/2 hour

    Saturday will be alternate

    Need your kind assistance. Thanks in advance

    Reply
  27. JOhn

    sir:

    i am a foreign worker here in malaysia as a production operator. i just want to ask if the deduction of our agent from our salary is legal? our basic salary is RM850 and our agent deduct us a total of RM2200 (we already paid processing fee back in our country ). the amount the deduct from us is too much.

    i badly need an answer for this. Thank You

    Reply
  28. Confuse

    Hi,
    i’ve been working for the company for 6 years and a permanent staff.

    the management had order Hr to come out with warning letter (via messaging) to me. There were no counselling given or show cause letter were asked. Is the warning letter valid?

    Reply
  29. Noraida

    I’m working with an oilfiled chemical manufacturer as an executive. Currently, all officers & executive (office staff) work only 5 working days. However, just recently, the production worker complaints that why they have to work 6 days while office staff work for 5 days. And, to my dissapointment, the GM instructed that all has to work 6 days which I found it very irrational. What would be your advise? We do not want to work 5 1/2 days a week. The production worker should have understand that they are doing production and that is their requirement to work on OT etc….. I need some input what would be the best solution or proposal to the management?

    Reply
  30. Suriya

    Hye, my querries regarding on OT is calculated based only on basic or plus added incentive. my salary is 1300.00 and my daily incentive is 65.00. my daily inc is paid on daily basis and it’s fixed for each day i worked. on the day i’m on leave or absent from i’ll not get my incentive. My incentive played a major part in my salary. personnally i feel tat my Ot calculation should be based on basic plus my incentive since it’s a part of my salary. is thr any law for tis kind of cases.. pls advice.

    Reply
  31. Jan

    Dear Sir,

    Can you advice me what should I do if my employer insist to deduct my salary without black & white to say that they have the right to deduct my salary?

    Reply
  32. alwin lim

    I work for my family business.
    I do have an employment letter as a staff, however i do not own any shares in the company.
    Lately my boss which is my dad did not pay my salary periodically as he thinks it is the obligation of a son to continue working for the business and my education was paid from the business prior to starting work.
    I have all the documents on succeeding contracts from clients which in my letter of offer i am entitled to commissions. Like my salary my commissions are also not paid. I have been working for 6 years without taking leave only medical leave.
    What is the legal implications and the complications being a son on family business but treated as an employee on legal employment matters ?

    Thank you

    Reply
    1. Valx

      In my opinion, a family business is also considered your own business. As a son I think you should have the responsible to help your dad as he have gone into great pains to bring you up so why so calculative? Instead of bringing your family problems here, zip it, sit down and discuss with your dad about this problem. enough said.

      Reply
  33. ramesh

    My wife’s company provided a medical coverage for my son and myself as her husband. My son was admitted on 10th sept till 15th sept and the insurance company has approved the insurance based on the company guarantee letter.
    On 21st of sept, the hospital calls up and ask us to pay the amount which is rm 7000 since the company did not submit some particulars to insurance company so they have declined the insurance.
    Do we have a case against the company that approved the insurance based on the company letter?
    Who have to bare the medical cost now, are we suppose to pay up the bill?

    Please advise
    Thank you

    Regards,
    Ramesh

    Reply
  34. Benjammin

    iam a foreigner working at jb for the last 1.5 years.my employer deducted my salary after 10 months stating no reasons . is it possible or they have the right to do so.
    iam confused should i give a complaint against my employer at labour dept.
    kindly reply please.

    with regards
    Benjammin

    Reply
  35. oh

    I abandon my job without giving 2 months notice coz I was unhappy working there. I was still under probation and was in a managerial position. Can actions can the company take against me? What are my rights as an unhappy employee?

    Reply
  36. feeza

    I am a banker. I was dismissed due to a non compliance of policy.I appeal and my appeal accepted. Employer offer me back to work with few condition imposed eg transfer.I accepted. A week after employer revoke the offer. How’s my status?I reported to IR Sec 20.

    Reply
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  38. c.w.cheong

    I am getting a job and will be paid rm 2000.00. If I am asked to work overtime ,can I get paid ?

    Reply
  39. Ammu

    My employer verbally notified the staff that the company will shift (abscond) to a new place the next day. Now, I’ve to travel 55 km everyday. My notice period for resignation is 2 months. As per Malaysian labour law, is short notice permitted since my employer did not notify in advance? What is the minimum notice period allowed in such cases and for how long is this applicable from the date of shifting. I would also like to know if my employer will pay me if short notice is given.Please advice. Thank you.

    Reply
  40. Joan

    I wish to know, If I’m applying for unpaid leave for 2 week. We are working Mon-Sat (Half Day). I just want to know whether Saturday and Sunday will be count and deduct my salary.. Because according to my Human Resources Sunday also count. TQVM

    Reply
  41. syaz

    hi,

    i’m working with a reputable f&b operator in kl. due to some diputes with my boss i have been suspended from work for 3 days via sms. reason given is misconduct. i request for a letter of suspension from HR but i was told to collect it after 3 days of my suspension. Is the suspension valid? can an employer suspend staff without a letter? what can i do?

    thanks

    Reply
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  43. Raymond Connors

    I was engaged by SMR on a 3 year contract as a team supervisor on a teacher mentoring program fro MOE.
    They dropped my salary to that of a mentor, and transferred me and my family to a different location, and after a few months, dismissed me whilst I was on sick leave.
    My family and I suffered because of the loss of income.
    Despite no new contract being offered, the salary was reduced, but I was still on the books at the higher rate.
    I was promised reimbursement of removal expenses, but it never happened.
    I was dismissed in very suspect way, and the contract was never revoked.
    Can I claim what I am owed under this contract, less of course any new income I have made in mitigation, and how do I go about doing that?

    Reply

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