This article aims to list out the key changes made to the Employment Act 1955 (“the Act”) through the Employment (Amendment) Act 2021 (“the Bill”) that was tabled for its first reading on 25 October 2021.
Amendments and Additions to the Employment Act 1955
(1) Calculation of wages for incomplete month’s work
The Bill includes an addition for a new section with the formula for the calculation of wages where an employee has not completed a whole month of service:
The Bill proposed the removal of Part VIII — Employment of Women that provides for the prohibition of an employer to require any female employee do night work (work in any industrial or agricultural undertaking between 10pm and 5am or commence work for the day without 11 hours of rest), and that no female employees shall be employed in any underground work.
The Bill proposed:
- to increase the maternity leave period from 60 days to 90 days; and
- To make it an offence for an employer to terminate female employees who are pregnant or ill arising out of her pregnancy unless on grounds of breach of contract of service, misconduct or closure of business. The burden of proving that the termination is not due to the employee’s pregnancy or illness will rest on the employer.
The Bill proposes that paid paternity leave at the ordinary rate of pay for married male employees for a period of 3 consecutive days, limited to 5 confinements regardless of the number of spouses.
Married male employees will be eligible if they have been employed by the same employer for at least 12 months before the commencement of such paternity leave and if 30 days notice is given to the employer from the date of expected confinement or as early as possible after birth.
The Bill proposes to adopt a less draconic terminology, by changing “domestic servants” to “domestic employees”.
The Bill seeks to reduce the maximum number of working hours per week from 48 to 45 hours.
The Bill will allow flexible working arrangements between an employer and their employee. Employees may apply to their employers in writing to vary their hours of work, days of work or place of work.
The employer has 60 days to approve or refuse the application, and should the application be refused, the employer shall inform the employee in writing, the decision and grounds for refusal.
The Bill includes a new addition whereby the employer shall within 30 days of the termination of service of a foreign employee by his employer, expiry of employment pass or by repatriation or deportation, inform the Director General of the termination.
Should the foreign employee’s service be terminated due to them absconding from their place of employment, the employer shall inform the Director General of the termination of service 14 days after the foreign employee’s absence.
The previous Section 60L of the Employment Act which sets out that the Director General may inquire into complaints with regards to discrimination is deleted.
Although the Amendment Bill does not set out strict rules or punishments for discrimination in employment, it does provide that the Director General may inquire into and decide any dispute between an employer and an employee regarding discrimiation in employment.
The Bill now makes it an offence if an employer fails to comply with any order made by the Director General. On conviction, the employer shall be liable to a fine of RM50,000 (maximum) and in the case of a continuing offence after conviction, be liable to a daily fine of RM1,000 per day.
The Bill will remove the existing provision that PART XVA on sexual harassment applies to all employees irrespective of the wages of the employee.
However, the Bill has increased the fine for failure of employers to inquire into complaints of sexual harassment from RM10,000 to RM50,000.
The Bill now makes it a requirement for employers to, at all times, conspicuously exhibit a notice to raise awareness on sexual harassment at the place of employment.
The Bill allows the Court to order employers make any payment due to the employee in relation to the conviction by the Court. If the employer fails to comply with the order made by the Court, the employee may apply to the Court to issue a warrant to levy the employer’s property for payments due and owing to them by way of distress and sale of property or by way of a fine provided under the Criminal Procedure Code.
The Bill provides that it is an offence for any employer to threaten, deceive or force an employee into doing any work and prevents them from leaving the place of work. Employers guilty of this will be liable to a maximum fine of RM100,000 or a maximum 2 years imprisonment or both.
The Bill seeks to increase the general penalty from RM10,000 to RM50,000.
The Bill provides that in any proceeding for an offence under the Act, where there is no written contract of service relating to any category of employee under the First Schedule, one is presumed to be an employee:
(a) where his manner of work is subject to the control or direction of another person;
(b) where his hours of work are subject to the control or direction of another person;
(c) where he is provided with tools, materials or equipments by another person to execute work;
(d) where his work constitutes an integral part of another person’s business;
(e) where his work is performed solely for the benefit of another person; or
(f) where payment is made to him in return for work done by him at regular intervals and such payment constitutes the majority of his income.
On the contrary, one is presumed to be the employer where the roles are reversed.
As mentioned, this article lists down the key amendments of the Act. RWC will proffer further comments on certain aspects of the amendments in future articles.
In conclusion, the newly proposed amendments have taken into consideration the recent Covid-19 Pandemic. The proposed amendments include a clause to introduce a flexible working arrangement, all of which was previously a very foreign concept. They also propose to provide better rights and privileges to employees. This in all would result in a more humane working environment to protect more vulnerable employees.
For further information, please contact:
Richard Wee, Partner, Richard Wee