The relationship between employer and employee is covered by the Employment Act 1955. The act covers all manual
workers and non-manual workers earning below RM 1500. Recent amendments to the Act also allows for all workers to complain
to the Labour Department if his or her employer violates any conditions within the employee’s contract of service.
The Employment Act general covers the rights of workers and employers in the working relationship.
It provides minimum benefits and rights of employees such as the maximum number of working hours, the minimum number of days
for annual leave and public holidays, minimum over time rates, minimum days for sick leave, hospitalisation, maternity leave
etc. The act also covers issues such as termination, retirement, retrenchment. Every employee should be familiar with the
Employment Act and not hesitate to remind employers and if necessary take action, if employers fail to abide by the law and
This section is a basic guide to the rights of workers in their relationship to their employers.
Most frequently asked questions are covered here. For more information, please use the Inquiry Form to seek further advice
(This section generally applies to workers who do not belong to a union. Workers who belong to
a union normally have better conditions than stated below. )
1. What laws cover employees ?
Employment Act 1955 – The main legislation covering the relationship between employer and
employee. Applicable to all manual workers and other workers earning less than RM 1500. The Act provides the minimum conditions
Amendments to the Act in 1998, provide that all those earning below RM 5000 can seek protection
under the Act if their employers fail to adhere to the terms and conditions in the contract of service between employer and
Industrial Relations Act 1967 - Covers the relationship between unionised workers and employers.
Section 20 of the Act also allows for workers to seek reinstatement if unfairly dismissed.
Employees Provident Fund Act 1951 - Requires the employer (12%) and employee (11%) to contribute
12% an d 11% of the employee’s salary to the Employees Provident Fund.
Social Security Act 1969 – Covers all workers who earn less than RM 2000. Provides for benefits
and pension if a worker is injured or disabled during working hours or while travelling to and from work.
Occupational Health and Safety Act 1994 – Protects the worker against unsafe work sites
and unhealthy work practices.
2. I am starting work, what are my rights as an employee ?
When you begin work, you must sign "Contract of Service". This contract, which can be in the form
of an appointment letter shall form the basis of your relationship with your employer. The contract should state the identity
of the employer and the employee, date of commencement of employment, salary and the terms and conditions of employment and
the period of notice required to terminate the contract of service.
No part of the contract can be less than provision provided for by the Employment Act, if you
fall within the ambit of the Employment Act. The contract cannot restrict the right of employees to join, participate in or
organise trade unions.
Workers not covered by the Employment Act should reject any condition of employment which is less
than offered by the Employment Act.
Any employee whose rights under the Employment Act are violated, can lodge a compliant at the
3. What are my rights while I am on Probation ?
An employee under Probation enjoys all the same rights as a full time employee and cannot be terminated
without just cause. An employer wanting to dismiss a probationar has to advise the probationar of the unsatisfactory nature
of his or her performance and allow sufficient time for the employee to rectify his or her performance. Only after such pro-active
action on the part of the employer and a lack of improvement on the part of the employee, can an employee be terminated at
the end of his of her probation period.
An employer can extend an employee's probation period up to a maximum of six months.
4. How many days and hours should I work in a week ?
Every employee shall be allowed at least one rest day in each week of work.For employees engaged
in shift work, any continuous period not less than 30 hours shall constitute a rest day. For employees working according to
a roster, the employer shall prepare a roster before the commencement of the month, informing employees of the day in each
week appointed to be his of her rest day. Employees required to work on a rest day should be paid 2 days wages (Refer Section
An employee shall not be required to work more than 5 consecutive hours without a period of leisure
of not less than 30 minutes, more than 8 hours a day, in excess of a spread over period of 10 hours a day or more than 48
hours a week. Employees who on any day of the week work less than 8 hours, can work more than 8 hours on other days but not
more than 9 hours a day or 48 hours a week. (Section 60E)
5. Can my employer ask me to work on a public holiday ?
An employer can require you to work on a public holiday. The employee will be entitled to 2 days
wages, even if the number of hours worked is less than the normal hours of work. (Daily wage or "ordinary rate of pay" is
calculated by dividing the monthly salary by 26.) For overtime work on a public holiday, an employee shall be paid not less
than 3 times his hourly rate of pay.
Note that every employee is entitled to a minimum of 10 days public holidays, 4 of which must
be Labour Day, Birthday of the Yang Di-Pertuan Agong, National Day and Birthday of state's Sultan/Federal Territory day.
(Refer Section 60D)
6. How much sick leave am I entitled to ?
Employed less than 2 years: Not less than 14 days per year
Employed between 2-5 years: Not
less than 18 days per year
Employed for more than 5 years: Not less than 22 days per year
If hospitalisation is required,
than sick leave of up to 60 days shall be allowed.
If an employee is sick during is annual leave, he or she is eligible for an additional day of
(Refer Section 60F)
7. Does an employer have to bear my medical costs ?
Employers have to bear costs for an employee to seek medical attention from a medical practitioner
to allow the employee to obtain a medical certificate for sick leave. Beyond that the Employment Act is silent on what an
employee can claim from the employer. This matter should be addressed in the contract of service.
8. How much Annual Leave should I be entitled to ?
Employed less than 2 years: Not less than 8 days per year
Employed between 2-5 years: Not less
than 12 days per year
Employed for more than 5 years: Not less than 16 days per year
If an employee who has worked for less than a year terminates his or her services, than the employee
shall be entitled to annual leave in proportion to the number of months served.
If you are sick, while on annual leave and obtain a medical certificate from a doctor, you are
entitled to be compensated with an additional day of annual leave.
If an employee’s annual leave is not utilised by the end of the year, an employer can, with
the consent of the employee, monetarily compensate the employee for the balance of annual leave. Or else, an employee has
the next 12 months to fully utilise his or her annual leave. (Section 60E)
9. Can my employer not pay my bonus ?
If the payment of a bonus is stipulated in your contract of service, than the employer has to
pay the bonus. If it is not stated, than it is up to the employer whether to pay the bonus or not.
10. What can I do if my employer is discriminating against me because of my race/religion/gender ?
There are no laws which protect workers against discrimination. Promotions, salary increments
etc are management prerogatives. However, if an employee feels he or she is being discriminated against in order to provoke
an employee into volunteraly resigning, than an employee can resign and take action against the employer for "Constructive
dismissal" under the Section 20 of the Industrial Relations Act.
11. Are there any laws against sexual harassment ?
There are no specific employment laws which protect employees against sexual harassment but there
are criminal laws which one can protect workers. However, some forms of sexual harassment have not been criminalised yet and
therefore workers find it very difficult to pursue legal channels to stop the intimidation.
If an employee is forced to resign due to sexual harassment, than the employee can take action
against the employer for "Constructive dismissal" under the Section 20 of the Industrial Relations Act.
12. What is the Employees' Provident Fund (EPF) ?
The EPF is a form of compulsory savings for workers. 30% of this saving can be used for house
purchases, 30% can be used to meet medical expenses and the balance can be fully withdrawn on retirement or when a person
leaves the country for good.
Currently, employees and employers contribute 11% and 12% of the employee’s monthly salary,
respectively. All deductions and employer contributions should be noted in the employee’s salary slip.
13. What is SOCSO ?
Social Security Organisation (SOCSO) is a fund to provides benefits for workers who are meet with
accidents in the course of their employment. All workers who earn less than RM 2,000 become members of SOCSO. Once a person
is a member of SOCSO, than the person should continue to be a member even if his or her salary is above RM 2,000.
14. Under what conditions can my employer terminate me without paying any termination or lay-off benefits ?
If you voluntarily terminate your service, if you reach the age of retirement, as stipulated in
your contract of service, if you are dismissed after a proper domestic inquiry finds that you guilty of misconduct. (you can
appeal against the decision of the domestic inquiry, by filing lodging a complaint of "Wrongful Dismissal" under Section 20
of the Industrial Relations Act)
(Refer to Regulation 4, Employment Regulations 1980)
15. If there is a change of ownership and the new owner refuses to engage the existing employees, who will then
be liable for the payment of termination benefits to such employees ?
Both the old and the new owner are jointly and severally liable for payment of all termination
benefits (Regulation 8, Employment Regulations 1980)
16. Does an employee have to inform his or her employer if he is HIV positive ?
There is no legislation covering HIV positive workers and any
requirement to inform employers. However, an employee which knowingly is HIV positive and does not inform his of her employer
of the condition and continues to carry out employment tasks which could lead to infection of others is opening his or herself
to grounds for dismissal, criminal charges and lawsuits.
17. Can my employer dismiss me if a I have committed an offence unrelated to my employment ?
Generally, employers should not hold a criminal offence, unrelated to his or her employment, against
an employee. If an employer considers that the employee, having committed an offence, will bring disrepute to the firm, the
employer can hold a domestic inquiry to investigate and possibly dismiss the employee. However, as in other cases of dismissal,
the employee can appeal against being dismissed by lodging a complain of "Unfair dismissal" under Section 20 of the Industrial
Employers can also dismiss workers for not turning up for work for two continous days without
notice. Therefore, workers detained by the police should inform the employer of his or her inability to attend work.
18. When can my employer hold back my salary ?
Employers cannot hold back you salary on any grounds expect when an employee fails to give one
month notice when terminating his or her services. An employer can hold back the salary in lieu of such notice.
19. I am going to be retrenched, what can I do ?
If you have received or think you will be receiving a notice of retrenchment, do not lose hope.
Your employer has to follow strict guidelines to safe guard the employee’s interests. Below are some steps which have
to be taken.
The employer has to give a valid reason for retrenchment. Merely citing the economic slowdown
is not reason enough. The employer has to be prepared to show in court that all alternatives have been explored and that the
retrenchment process (cutting labour costs) is absolutely necessary. Hence the employer to be prepared to open its financial
status and operations to inspection.
If retrenchment is absolutely necessary, employers have to follow the guidelines
set out in the Code of Conduct For Industrial Harmony 1975. They have to take the following measures:
giving as early a warning, as practicable to the employees concerned introducing schemes for voluntary
retrenchment and retirement and for payment of redundancy and retirement benefits retiring workers who are beyond their normal
retiring age assisting, in co-operation with the Department of Labour, the workers to find alternative employment spreading
termination of employment over a longer period ensuring that no such annoucement is made before the workers and their representatives
of trade union have been informed Once commencing retrenchment, the employer has to first retrench all foreign employees of
a similar work capacity before retrenching local workers.
From the group of local workers working in a similar capacity,
the employer has to retrench according to "Last in, First Out" that is the most recent staff to join the firm has to be the
first to leave.
When retrenching, the employer has to give the employee a minimum of one month notice. Failing which
the employee is entitled to one months salary in lieu of notice. Retrenched employees are entitled to be paid for all outstanding
leave plus retrenchment benefits. The minimum retrenchment benefit provided for in the Employment Act is :
up to two years: 10 days wages per year of service.
Service between two – five years: 15 days wages per year of service.
Service of more than five years: 20 days per year of service.
However, the norm among established companies is one month’s salary per year of service.
Retrenched employee’s can also seek a guarantee that should the employers decide to re-hire
that they should be notified and given first priority for employment should they choose to re-apply.
If your employer
has violated any of the above requirements in the process of retrenchment you should lodge a complaint at the nearest Industrial
Relations Department (Jabatan Perhubungan Perusahaan). For employees in Selangor, Federal Territory and Pahang Timur, the
appropriate Industrial Relations Department is located at 23rd Floor, Simebank Building (formerly UMBC Building) Jalan Sultan
Sulaiman, Kuala Lumpur. Employees should file their case under Representations on Dismissals, Section 20 of the Industrial
After filing a complaint, employees can expect to be called for a conciliatory meeting within
a month, a bit longer if the department has a heavy case load. At the arbitration session, no lawyers are allowed. Employers
can be represent themselves or be represented by their Human Resource Manager. Employees can represent themselves or seek
assistance from their union. An employee which does not belong to a union can seek assistance from the Malaysian Trades Union
Congress (MTUC) located at 10-5, Jalan USJ 9/5T, 47620 UEP Subang Jaya, Tel: 03-7242953.
Remember, no employer can threaten you to take a cut in your pay or contractual bonus. Nor can
your employer "black-list" you or force you to resign. The employee has rights! Where possible you should join a union. The
union informs you of your rights and assists you in dealing with your employer.
20. My employer is violating my rights, where can I complain ?
Employees who feel that their employer is violating his or her rights can make a complain to any
Labour Department. The Labour Department will then take up your complain.
21. How can an employer dismiss me ?
An employee can only be dismissed after an employer has conducted
a domestic inquiry into alleged misconduct by the employee. Every employee has the right to challenge his or her dismissal
by lodging a complaint of "Unfair dismissal" under Section 20 of the Industrial Relations Act 1967, with the Industrial Relations
department. The IR Department will then call both the employer and employee for a reconciliation session where the IR Officer
will view both sides of the case and advise the employer and employee accordingly. Settlements are either in the form of the
reinstatement of the employee or an agreed monetary compensation for the employee in return for the employee not pursuing
If the employer and employee cannot reach an agreement to resolve the compliant, than the case
will be referred to the Human Resource Minister, who will decide whether or not to refer the case to the Industrial Court.
If the case is referred, the Industrial Court will then decide on the matter. Either party can appeal the decision at the
High Court and subsequently higher courts.
At the reconciliation meeting both parties cannot be represented by lawyers. Employees can
be represented by Industrial Relations Officers, authorised by MTUC and employers usually represent themselves or are represented
by their human resource managers.
(From the MTUC's website -http://www.mtuc.org.my/workers_right.htm#w1 - 29th November 2005. To be used as a guideline and please direct all queries to them)