Lecture 4 Individual Statutory Rights Affecting the Course of Employment Lecture Version

INDIVIDUAL STATUTORY RIGHTS AFFECTING THE COURSE OF EMPLOYMENT

Payment of WagesWorking hours and leaveEmployment of WomenEmployment of Young Children and Young Persons

PAYMENT OF WAGES

Wages is one area of great concern Wages Council Act 1947 has established a

council which is known as wages council to set such minimum wages in certain industry

This Act deals with Wages period Advances on wages Deductions from wages Priority of wages The truck system

WAGE PERIOD

General rule is wage to be paid once a month Contract of service shall specify a wage

period not exceeding one month If not specified, than it is assumed to be one

month Section 18 of Employment Act, wages must

be paid regularly and within the stipulated period, so that workers are able to plan their financial requirements and be certain as to when they will be receiving their wages

WAGE PERIOD

Section 19: wages are payable not later than the seventh day after the day of wage period

Employer may apply for the extension of the time of payment from Director General

Section 20: Normal termination, wages are to be paid on day of termination

Section 21: Termination of contract by employee without notice, wages shall be paid by employer not later than the third day of which the contract of service was terminated.

Asia Motor Co. (KL) Sdn. Bhd. v Ram Raj & Anor [1985] 2 MLJ 202

ADVANCES ON WAGES

Section 22: wage advance is unlawful unless the purpose is Purchase of land Purchase, build or improve house Purchase a motorcar, motorcycle or bicycle Purchase of livestock Purchase shares of the employers business

offered for sale by the employer

DEDUCTION OF WAGES

Deductions are only allowed in certain restricted circumstances

Section 22: employer may deduct the following from his employees wages without their permission if; Overpayment made by mistake Indemnity due to the employer by the employee under

section 13(1) Recovery of advances of wages provided no interest is

charged on the advances EPF, social security contributions, income tax and etc.

as authorized by law

DEDUCTION OF WAGES

Any other deductions require the written permission of both the employee and the Director General of Labour. Such deductions may include Payment into a welfare scheme, which is for the benefit of

the worker Repayment of any advance given to the worker where an

interest payment is imposed Payment to a third party Payment for the purchase of the company goods made by

the employee Payment of rental for accommodation provided by the

employer or he cost of any service provided by the employer to the employee

DEDUCTION OF WAGES

Section 23 provides that an employee is not entitled to any wages spent in Prison or police custody Travelling to and from prison or any other

place of custody Attending or returning from court, except

as a witness of his employers behalf

TRUCK SYSTEM

Wages must be paid in legal tender Section 25 provides that the employee

could give his written agreement that his wages be paid into his account at a bank or by cheque.

Agreement can be revoked by the employee by giving four weeks written notice to the employer

TRUCK SYSTEM

Basically in any event, the employee should not unreasonably withhold or withdraw his consent in respect of the payment through bank or cheque.

It is clearly stated in the employment Act 1955 that an employee could only insist on being paid in cash if he had a strong reason

Chin Swee Hin Sdn Bhd v. Mohamed Arif bin Khalid [1977] 2 MLJ 31Viking Askim Sdn. Bhd. V National Union of Employees in Companies Manufacturing Rubber Products & Anor [1991] 2 MLJ 115.

An employer is bankrupt and the court has ordered that the

employers properties be sold by a secured creditor. Does this mean that the employees will not get their wages owed to

them?

PRIORITY OF WAGES

Section 31: The general rule is when the property of an employer is sold by court order upon the application of a secured creditor, the court shall not authorise payment proceeds of sale to the secured creditor until the employees’ wages have been paid first.

WORKING HOURS AND LEAVE

Section 59(1): an employee is entitled to one whole day of rest day in each week (7 days)

Section 60(1): It is lawful if an employer requires his employee to work on a rest day provided that

The employee is engaged in shift work which by reason of its nature requires continous attention;

There is an accident; actual or threatened, in respect to his place of work The performance of the work is essential to life of community. The work is essential to the defence or security of nation Urgent work to be done to machinery or plant Unforseen interuption of work Essential to the economy of Malaysia or is essential service as defined

by the Industrial Relations Act 1967Malayan Commercial Bank Association & Anor v Association of Bank

officers, Peninsular Malaysia & Anor [1996] 2 CLJ 31

How should an employee who is required to work on a

rest day be paid?

Section 60(2): For a daily or hourly rated employee, he/she should be paid; One day wages at the ordinary rate of pay

for any period of work not more than half his working hours

Two days wages at the ordinary pay for any period of work more than half but not more than his normal working hours

CALCULATION

8 hours

5-8 hours

RM40

RM40

RM80

1-4 hours

Therefore:

For a monthly rated employees, he should be paid Half the ordinary rate of pay for work done

on that day, for any period of work which does not exceed half his normal hours of work

One day’s wages at ordinary pay for any period of work more than half but not more than his normal working hours.

Sundaram v Veemah & Ors [1972] 1 MLJ 83

CALCULATION

8 hours

5-8 hours

RM40

RM20

RM40

1-4 hours

Therefore:

HOURS OF WORK

Generally, the employee shall not be required to work More than five consecutive hours without a

break of at least 30 minutes More than 8 hours a day In excess of a spread over period of 10

hours in one day More than 48 hours in one week

HOURS OF WORK

Where there is an agreement to work less than eight hours on a certain day, the work on another day may be increased to exceed eight hours, but no employee should work more than nine hours a day or 48 hours a week

OVERTIME

Number of hours of work carried out in excess of the normal hours of work

Agreed in the contract of service should be the usual hours of work per day. Should not exceed the limit prescribed by the Act.

Employees are entitled to overtime wage even if the employment contract is silent or contrary to the payment of overtime wagesEng Giap Public Motor Bus Co. ltd v Gan Eng Keng

& 36 Ors [1975] 1 MLJ 106

ANNUAL LEAVE

After continuous service of 12 months with the same employer, the employee is entitled to annual leave as follows; Less than two years service – eight days

for each year More than 2 years but less than 5 – 12

days for each year More than 5 years – 16 days each year

SICK LEAVE

Section 60F When hospitalization in necessary – 60

days aggregate When hospitalization is not necessary

Less than 2 years : 14 days 2 years but less than 5 years : 18 days 5 years or more : 22 days

How should an employee who is required to work on

holidays be paid?

HOLIDAY PAY

An employee is entitled to be paid holidays at his ordinary rate pay on 10 gazzetted public holiday, four of which should be National day YDPA’s day Rulers birthday Workers dayWhere a holiday falls on a rest day, the following

day would be the holidays [section 60D(1), (1A)]

HOLIDAY PAY

In addition to the holiday pay, such employee is entitled to payment for that day as follows; Monthly, weekly, daily or hourly rated employee,

he shall be paid two days wages at the ordinary rate pay (if he carries overtime, he would be paid 3 times of ordinary rate)

For an employee who is employed on piece rates, he shall be paid not less than three times the ordinary rate.

Union Carbide Singapore Pte. Ltd v Govindan Nair [1973] 1 MLJ 144

EMPLOYMENT OF WOMEN

Special protection of women Female employees are not to be

employed in agricultural undertaking between 10pm – 5 am, nor commence work without having had a rest day after working for 11 consecutive hours

EMPLOYMENT OF WOMEN

However, the DG for Labour may ‘on application made to him in any particular case, exempt in writing any female employee or class of female employees from this restriction, subject to any conditions he may impose.

These conditions are provided under Section 34 of Employment Act

EMPLOYMENT OF WOMEN

Section 35 gives female employees maternity leave and allowances and prohibits women from any underground working

Section 36: The Minister of Human Resource may prohibit or permit the employment of female employees in such circumstances or under such conditions as he thinks appropriate, notwithstanding anything to the contrary as stated above

EMPLOYMENT OF WOMEN

Generally, every female employee is entitled to maternity for a period of not less than 60 consecutive days and maternity allowance in respect of the eligible period

This is provided under Section 37 (1) (a)

When should maternity leave commenced?

EMPLOYMENT OF WOMEN

Maternity leave shall not commence earlier than the period of 30 days before the employees confinement

Certification of government medical officer or company doctor that the female employee is unable to perform her duties satisfactorily due to advance state of pregnancy, she may be required to commence her leave 14 days before her confinement as provided under Section 37(1)(b)

What are the conditions to be fulfilled before an employee qualifies for maternity allowance?

EMPLOYMENT OF WOMEN

Section 37 (2) (b) also entitles the female employee to receive, for each day, of her maternity leave, a maternity allowance at her ordinary rate of pay, or at the rate prescribed by the Minister of Human Resources, whichever is greater.

Section 37 (2) (c): A monthly rated female employee is deemed to have received her maternity allowance if she continues to receive her monthly wages without abatement during her abstinence from work within the eligible period.

EMPLOYMENT OF WOMEN

To qualify for a maternity allowance during the eligible period, the employee must; Have been employed by the same

employer for an aggregate of not less than 90 days during the nine months preceding confinement

Have been employed by the employee anytime during the four months immediately preceeding the confinement; and

Not have more than five surviving children

EMPLOYMENT OF WOMEN

Section 40: provides for the circumstances where a female employee may lose her entitlement to maternity allowance.

Female employee who expects to be confined within four months and who is about to leave her employment, should notify her employer of her pregnancy. Failure to do so results in the loss of her entitlement to maternity allowance.

EMPLOYMENT OF WOMEN

However, failure to do so will not prejudice her if: The failure was due to mistake or other reasonable

cause If the employer has not been let down by such

defect of inaccuract Notice should be preferably given in writing The employee is also liable to forfeit her

maternity allowance to the extent of seven days if she refuses or fails to submit to the free medical treatment offered by her employer

EMPLOYMENT OF WOMEN

In addition, the employee must within a period of 60 days preceding her expected confinement notify her employer of it and the date she intends to commence maternity leave, or the payment of maternity allowance will be suspended

EMPLOYMENT OF CHILDREN AND YOUNG PERSONS

Law does not prohibit children from being employed in Malaysia

Children and Young Persons (Employment) Act 1966 sets out the rules and conditions for employing children and young persons.

Like Employment Act 1955, it is enforced by the Department of Labour and it is applicable to West Malaysia only.


For the purpose of employment, a child is defined as person under the age of 14; a young person is between 14 and 16 years of age.

Thus, once a worker attains the age of 16, he is considered adult for employment purposes

(Section 1A)


A child may engaged in the following employments as laid down by Section 2 Employment involving light work compatible with his

capacity carried out by his family; Employment as an apprentice under a written

apprenticeship contract approved by the DG, with whom a copy of such contract has been filed;

Employment requiring him to perform work approved/sponsored by the government in any school, training institution or training vessel

In public entertainment (subject to the terms and conditions of licensing


A young person may be engaged in any of the employment Suitable to his capacity (whether or not the

undertaking is carried by his family) In any office, shop (including hotels, bars,

restaurants and stalls) godown, factory, workshop, store, boarding house, theatre, cinema, club or association

In an industrial undertaking suitable to his capacity On any vessel under the personal charge of his

parent or guardian


Female young persons should not be employed in any hotels, bars, restaurants, boarding houses or clubs unless such establishments are under the control and management of her parent or guardian

The prior approval of the DG of Labour need to be obtained if otherwise.


Under section 2 & 3, the minister may order prohibit any child or young person from engaging in any of the employments mentioned above, if he is of the opinion that such employment is detrimental to the interest of the child or young person

What are the working hours of children and young persons under

this Act?


Children may not work Between 8.00 pm and 7.00 am They must be given a rest of 30 minutes

after 3 hours of work More than 6 hours per day No school going children shall work more

than 7 hours inclusive of the hours at school


A young person; May be employed in the same circumstances as children as

described above and also in any light work in any office, shop, cinema, club, factory and so on.

Not permitted to work between 8pm and 6 am and they are entitled to a rest of 30 minutes every 4 hours.

They may not work more than 7 hours a day If the young person is attending school, he could not work

more than eight hours, inclusive of the time he spends at school

He is to have at least 12 consecutive hours of rest before commencing work in any one day

Section 5 & 6


Section 7: the employer must first procure a license (With the prescribed restrictions and conditions) from the Director General of Labour. The Director General may also impose additional conditions from time to time as he deems fit.

No such license will be issued if in the opinion of the DG, the employment is dangerous to life, limb, health or moral.

Parents can appeal to the Minister if aggrieved by the decision withing 14 days of making that decision

Is a child or a young person competent to enter into a contract of service under the

Act?


Despite the Contract Act 1950, a child or a young person is competent to enter into a contract of service (but not as an employer). He may also sue as plaintiff.

However, an employer could not recover damages or indemnity under Section 13 of the Employment Act from a child or a young person for a breach of any contract of service


Section 16 states the Sections to be applied for the employment of young persons Section 8,10,11-29,31,32,37-44, 57,61-

92,94,97-99, 101, & 102.

Lecture 4 Individual Statutory Rights Affecting the Course of Employment Lecture Version

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