Terms of Employment

Payment of Wages
Hours Of Work
Rest day
Annual Leave
Sick Leave
Maternity Protection

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Contract of service
Any agreement, whether oral
or in writing and whether
express or implied, whereby
one person agrees to employ
another as an employee and
that other agrees to serve his
employee and includes an
apprenticeship contract.
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Employer & Employee
Employer: Any person who has
entered into a contract of service
to employ any other person as an
employee and includes the agent,
manager or factor …
Employee: any person or class of
◦ (a) included in any category in the
First Schedule
◦ In respect of whom the Minister of HR
makes an order under s2(3) or S2A

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allowance and overtime. irrespective of his occupation. excluding commission. mumtaj hassan 4 .First Schedule Two classes of person in First Schedule:- ◦ Any person. who has entered into a contract of service with an employer and whose wages do not exceed RM1500 a month.

◦ Registered vessel ◦ Domestic servant. ◦ Is engaged in operation of any vehicle used for the transportation.First schedule Any person. who: ◦ Manual labour ◦ Engaged in supervising other employees engaged in manual labour. has entered into a contract of service. mumtaj hassan 5 . irrespective of the amount of his monthly wages.

Employment Contract EA declares that the employment contract cannot stipulates terms and conditions which are less favourable to the employee. Section 7 EA any terms or condition which is less favourable to the employee than a term or condition prescribed by this Act or any subsidiary shall be void to that extent … mumtaj hassan 6 .

◦ Piece work ◦ Exceed one month mumtaj hassan 7 . EA requires employment contract to be in writing. Section 7B & 10(1) EA Any terms and conditions of employment not prescribed by the EA. the employment contract may stipulate such terms and conditions.

mumtaj hassan 8 .S 10(2) In every written employment contract shall be included setting out manner in which such contract may be terminated by either party in accordance with Part 11.

To associate with any other persons for the purpose of organizing a trade union in accordance with the Trade Union Act 1949 mumtaj hassan 9 . To join a registered trade union To participate in the activities of a registered trade union. Section 8 EA Prohibits any employment contract from restricting in any way the exercise by an employee of his trade union rights.

mumtaj hassan 10 .Four tests For discerning the contract of employment/contract of service ◦ Traditional or control test ◦ The organization or integration test ◦ Entrepreneur ◦ Composite test.

Express Terms in a Contract of Employment Job title Wages and details of other monetary payments Normal working hours and whether there is requirement to work overtime Holiday and leave entitlements  Other benefits Probationary period mumtaj hassan 11 .

Notice period prior to termination Retirement age Requirement of secrecy Requirement to comply with company rules and penalties for misconduct. mumtaj hassan 12 .

an employee may claim for constructive dismissal. Any Employer who wishes to unilaterally change the contract may be accused of breach of contract by the employee. Where an employer breaches a major term of the employment contract. mumtaj hassan 13 .Changing the terms The terms and conditions of the contract can only be changed by mutual consent.

mumtaj hassan 14 .Wages Basic wages. and all other payments due under the contract of service excluding: Annual bonus Overtime payments Commissions Subsistence allowances. and Traveling allowances.

A contract of service shall specify a wage period not exceeding one month.Payment of wages S18 EA. the wage period would be deemed to be one month. If the contract does not specify. mumtaj hassan 15 .

The employer may apply for extension of the time of payment from the DG.PAYMENT OF WAGES S19 EA Wages after any lawful deduction are payable not later than the seventh day after the day of wages. mumtaj hassan 16 .

S21(1) Where the employer terminates the contract of service of an employee without notice. wages are payable on the day when the contract of service is terminated mumtaj hassan 17 .Termination S20 EA On normal termination. wages are payable on the day the contract of service is terminated.

Where the employee terminates his service without notice. wages are payable not later than the third day when the contract is terminated. mumtaj hassan 18 .S21(2) EA.

build or improve a house Purchase a motorcar. mumtaj hassan 19 . unless the purpose is for the employee to: Purchase land Purchase.motorcycle or bicycle Purchase livestock Purchase shares of the employer’s business offered for sale by the employer.Wage advances Itis unlawful give advances exceeding the amount of one month’s wages.

◦ Traveling to and from prison or any other place of custody and ◦ Attending or returning from court except as a witness of his employer’s behalf.Attending Court The employee is not entitled to any ages for: ◦ time spent in the prison or police custody. mumtaj hassan 20 .

Indemnity due to the employer by the employee under s13(1) mumtaj hassan 21 . Overpayments made by mistake during the immediate preceding three months from in which deductions are to be made.Deduction From wages An employer may deduct the following from his employee’s wages without the employee’s permission.

Syarikat Bina & Kuari Sdn Bhd and Nonmetalic Mineral Products Manufacturing Employees Union Award 92/1985 mumtaj hassan 22 . as authorised by law. social security contributions.Recovery of advances of wages provided no interest is charged on the advances. EPF. income tax etc.

Payments for the shares of the employer’s business offered for sale by the employer and purchased by the employee. mumtaj hassan 23 . Deduction by employer Payments of subscriptions. entrance fees. installments and interest on loans or other dues owed by the employee to the registered trade union or co-operative and loan society.

wages only allowed in certain restricted circumstances. The maximum monthly total deduction must not exceed 50 % of the employee”s wages unless the amount to be deducted includes repayment of a housing loan. mumtaj hassan 24 . the total deductions may be increased to 75% of the monthly wage.Deductions from employees. With the permission of the DG of labour.

The employee. mumtaj hassan 25 . however could give his written agreement that his wages be paid into his account at a bank or by cheque. Such agreement can be revoked by the employee by giving 4 weeks’ written notice to the employer. 25A EA Wages should be actually paid to the employee in legal tender. Truck System S25.

Restriction on the places
S28 EA
Wages should not be paid in
taverns, amusement places,
shops or stores (except for
employees employed

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Priority of Wages
S31 EA:
Where the property of an employer
is sold by a court order upon the
application of a secured creditor,
the court shall not authorise
payment of the proceeds of the
sale to the secured creditor until
the employees’ wages have been
paid first.

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Priority of wages
Wages in this case include
termination and lay-off benefits,
annual leave pay, sick leave pay,
public holiday and maternity

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Section 15(1)EA.Failure to pay wages Any employer who fails to pay wages with the employment contract has committed a breach of contract. mumtaj hassan 29 . File representation for constructive dismissal at Industrial Relations Dept. Lodge a complaint at Labour Dept.

000. Lodge Complaint at Labour Dept.S69B (1) EA Rights of employees earning RM 1.500-5. mumtaj hassan 30 .

It is incentive given to employees. …. order that bonus be paid to the employees at the discretion of the employer.We will therefore.Bonus Malayan Agricultural Producers association and All Malayan Estates Staff Union Award 62/1982 Bonus according to Oxford Dictionary is gratuity to employees beyond their wages. mumtaj hassan 31 .

mumtaj hassan 32 .Contractual and discretionary bonus Art Printing Works Sdn Bhd and Printing Industry Employees union Award 154/1987 IF bonus has not been made contractual before or has not become an implied term of employment. the court will not make it contractual.

In excess of a spread over period of 10 hours in one day or More than 48 hours in one week. mumtaj hassan 33 . More than eight hours in one day. Hours of Work:S60A Employee shall not be required under his contract of service to work: More than five consecutive hours without a break of at least 30 minutes.

inclusive of a 45 minute meal break. mumtaj hassan 34 .S60A An employee who is engaged in work which must be carried on continuously and requires his continual attendance may be required to work for eight consecutive hours.

S 60A: Where there is a agreement to work less than 8 hours on certain day may be increased to exceed 8 hours but no employee should work more than nine hours a day or 48 hours in one week. S60A(1A) If there are special circumstances. mumtaj hassan 35 . DG may grant permission subject to conditions that he may impose.

mumtaj hassan 36 .S 60C: Shift Workers Shiftworkers may be required to work for more than 8 hours a day or more than 48 hours a week but: For every 5 consecutive hours of work. there must be a break of 30 minutes. The average number of hours over any period of three weeks or over any period exceeding three should not exceed 48 hours per week.

defence/security of Malaysia. except in circumstances where there is actual/ threatened accident in the place of work. urgent work to be done to machinery or plant or an interruption of work which is impossible to foresee. work is essential to life of community. S 60C Shift worker should not work for more than 12 hours in any one day. mumtaj hassan 37 .

Overtime S60A(3)(b). S60A (3) (a) Employee shall be paid at a rate not less than one and half times his hourly rate of pay mumtaj hassan 38 .(c ) EA Overtime means the number of hours of work carried out in excess of the normal hours of work.

Employment (Limitation of overtime work Regulation 1980) mumtaj hassan 39 . Restriction on overtime Anemployee shall not work overtime for more than ◦ 12 hours per day inclusive of overtime or ◦ 104 hours in any one month.

S60D(1).(1A): Public Holidays The employee is entitled to paid holidays at his ordinary rate of pay on 10 gazetted public holidays. four of which should be. The National day  The Birthday of Yg Dpertuan Agong The Birthday of the Ruler/ Governor of the State/ Federal Territory Day The Worker day mumtaj hassan 40 .

Remaining days Employers are required to put up a notice at the beginning of the year informing the employees which 6 public holidays have been chosen. S60D(1) Where a holiday falls on a rest day. mumtaj hassan 41 . the following day will be the holiday.

S60D(1)(B) Ifany of the 10 public holidays falls during sick leave. annual leave or the period of temporary disablement under WCA or Employee’s Social Security Act 1969. mumtaj hassan 42 . Another day should be substituted.

He is not entitled to any wages on the day of his absence. mumtaj hassan 43 .S60D(2) EA Ifany employee is absent without excuse or permission on the day preceding or succeeding a public holiday.

Overtime: 3 times employees hourly rate of pay. RM900 divided by 26 (days) divided by 8(hours):RM…X … hours = Employee employed on piece rates - twice rate per piece and if overtime.Work on Public Holiday Normal working two day’s extra wages. 3 times the ordinary rate per piece. mumtaj hassan 44 . regardless of the actual hours worked.

Award 267/1993 mumtaj hassan 45 .Case LionMetal Industries Sdn Bhd and Metal Industry Employees Union.

Less than 2 years’ service 8 days for each year More than 2 less than 5 years’ service 12 days 5 years service or more 16 days mumtaj hassan 46 . as follows.S60E(1): Annual Leave After every 12 months of continuous service with the same employer. an employee is entitled to annual leave.

mumtaj hassan 47 . that period of leave of absence shall be disregarded for purpose of computing his length of service with the employer.S60E(3B) Where an employee is granted leave of absence without pay by his employer during any 12 months period. and the period of absence exceeds in the aggregate 30 days.

If an employee is absent for more than 10% of the working days without permission or excuse.Leave occurred in one year should be taken before the end of the following year. or it would be forfeited. mumtaj hassan 48 . he is not entitled to any annual leave for that year.

the employee is paid in lieu unless he agrees in writing. mumtaj hassan 49 . S60E(3) For leave not taken.S60E(2A) Where an employee’s contract of service has been terminated and the employer should pay the employee his ordinary rate of pay in respect of every day of such leave.

mumtaj hassan 50 . he will not be entitled to any payment for his annual leave which he is entitled but has not taken.S60E(3A) Ifan employee is dismissed for misconduct.

the services of the doctor so appointed are not obtainable within a reasonable time or distance by any other registerd doctor. (b) if no such doctor is appointed or having regard to the nature or circumstances of the illness. S60F (1) Sick Leave An employee’s shall. after examination at the expenses of the employer – (a) doctor appointed by the employer. mumtaj hassan 51 .

S60F (1)(aa) Be entitled to paid sick leave- (NO hospitalisation) Less than 2 years service 14 days 2 years more but less than 5 years’ service 18 days 5 years service or more 22 days mumtaj hassan 52 .

An employee is deemed to be absent if his sick leave is not certified. S60F (1)(bb) & S60F(2)(b) Ifan employee is hospitalised. or it is certified but he did not inform or attempt to inform his employer within 48 hours. 60 days in in each calendar year. mumtaj hassan 53 .

Carlsbery Brewery Sdn Bhd and National Union of Drink Manufacturing Industry Workers The court found that the  employees were not entitled to paid sick leave as they had been certified ill by a doctor who had not been appointed by the company whereas the workers were not faced with any medical emergency. mumtaj hassan 54 .

The co. mumtaj hassan 55 .Kelang Port Management Sdn Bhd and Karuppiah The employee’s service was terminated on the grounds of taking excessive sick leave over a four year period. dismissed him Court upheld the dismissal. Employee had been warned in writing .

S60F(4) An employee would not be entitled to any sick leave pay.- During maternity leave. For any period which he is receiving any compensation for disablement (Employees’ social Security 1969 or Workmen compensation Act 1952 mumtaj hassan 56 .

mumtaj hassan 57 . and the roster should be displayed.Rest DAY At commencement of the month the employer must prepare a roster to inform the employee of the days appointed to be his rest days in that month.

Where an employee is allowed more than one rest day in a week. the last rest day shall be the official rest day for the purpose of the Act. mumtaj hassan 58 .Rest days S59(1) An Employee is entitled to whole day of rest day in each week.

in respect to his place of work. actual or threatened.Work on a rest day Section 60A(2) an employee may be required by his employer to exceed the limit hours and to work on a rest day in the case of: (a) There is accident. mumtaj hassan 59 .

(b) The performance of the work is essential to life of community (c) The work is essential for the defence or security of Malaysia (d) urgent work to be done to machinery or plant mumtaj hassan 60 .

(e) There is an unforeseen interruption of work and (f) Work to be performed by the employee is essential to be economy of Malaysia or is essential service as defined in the IRA 1967 Section 2 IRA ‘any service specified in the Schedule’ mumtaj hassan 61 .

mumtaj hassan 62 .S60(3) EA: Payment For a daily or hourly rated employee: One day’s wages at the ordinary rate of pay for any period of work not more than his working hours Two days’ wage at the ordinary rate of pay. for any period of work more than half but not more than his normal working hours.

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. mumtaj hassan 63 .For a monthly rated employee he shall be paid. One day’s wage at the ordinary rate of pay for any period of work which is more than half but not more than his normal working hour.

S37(1)(b) maternity leave shall not commence earlier than the period of 30 days before the employee’s confinement.Maternity Protection S37(1) (a) EA: every female employee is entitled to maternity leave for a period of not less than 60 consecutive days and maternity allowances. mumtaj hassan 64 .

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.Conditions To qualify for maternity allowance during the eligible period. mumtaj hassan 65 . Have been employed by the employer anytime during the four months immediately preceding the confinement and Not have more than five surviving children.

 practitioner and has her employer’s consent.S37(1)(aa) EA An employee who is not entitled to maternity allowance can commence work before the end of the maternity leave period if she is certified fit by a registered medical. mumtaj hassan 66 .

Failure to do so results in the loss of her m/allowances mumtaj hassan 67 .S40(1).(2) (4) Female employee who want expects to be confined within four months and who is about to leave her employment should notify her employer of her pregnancy.

if: The failure was due to mistake or other reasonable cause. mumtaj hassan 68 . Notice should be in writing. or If the employer has not been let down by such defect or inaccuracy.Failure to do so will not prejudice her.

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. mumtaj hassan 69 .

An employer who during the period of 90 days after the maternity leave period. S40(3). dismisses a female employee who remains absent from her work after the maternity leave period due to illness arising from her pregnancy as certified by a registered medical practitioner. also commits an offence mumtaj hassan 70 . S42 EA An employer who dismisses a female employee from her employment during the period in which she is entitled to maternity leave commits an offence.

Other Benefits  Resignation benefits  Automotive Manufactures Sdn Bhd and Transport Equipment & Allied Industries Employees Union Award 60/1986  Medical benefits  Golden Sands Beach Resort Award 107/1988  Insurance Benefits  Cathay Organisation Sdn Bhd and National Union of Cinema & Places of Amusement workers (Award 69/1985) mumtaj hassan 71 .

Question Whether a bank employee could be required by his employer to work on a rest day under the employment Act 1955? Answer: mumtaj hassan 72 .

Decide whether Ally was entitled to be paid in lieu of the annual leave of 16 days for 2011when he was receiving temporary disablement benefits for the whole of 2011. Ally did not receive any payment in lieu of her paid annual leave 2011that he had not taken. mumtaj hassan 73 . Ally’s case  Allymet with an accident during the course of employment and was certified unfit for work the whole of 2010 for which year Ally received temporary disablement benefits under the Employee’s Social Security Act 1969.