USEFUL  REFERENCES
ODE  MANAGEMENT  SERVICES  SDN.  BHD.
 
EMPLOYMENT  ACT  1955
 
This is the principal legislation stipulating the  terms and conditions of employing an employee.  The following are the common provisions:
CONTENTS
1 Interpretation
2 Contracts  Of  Services ("CS")
3 Payment  Of  Wages
4 Deductions  Of  Wages
5 Mode  Of  Payment  Of  Wages
6 Priority  Of  Wages 
7 Contractors  And  Principals
8 Employment  Of  Women
9 Maternity  Protection
10 Rest  Days,  Hours  Of  Work,  Holidays  And  Other  Conditions of  Services
11 Termination,  Lay-off  And  Retirement  Benefits
12 Employment  Of  Foreign  Employees
13 Register,  Returns  &  Inspection
14 Complaints  &  Inquires
1. INTERPRETATION
"Act" means the Employment Act 1955
contract of service (cs) means any agreement, whether oral in writing and whether express or implied, whereby one person 
          agrees  to employ another as an employee and that other agrees to serve his employers as an employee and includes an  
          apprenticeship contract
"contractor" means any person who contracts with a principal to carry out the whole or any part of any work undertaken by the 
          principal 
"domestic servant" means a person employed in connection with the work of a private dwelling-house 
"day" means a continuous period of 24 hours beginning at midnight or in respect of shift work a continuous period of 24 hours
          beginning at any point of time
"employee" means
(a)   any person, irrespective of his occupation, whose  wages do not exceed RM1,500.00 per month
                    (b)   any person, irrespective of his wages, who is engaged in manual labour or who supervises other  employees engaged in  
        manual labour or engaged as a domestic servant
           For the purpose of this paragraph  "wages" means wages as defined below but shall not include any payment by way of commission, subsistence allowance and overtime payment.
"employer" means any person who has entered into a contract of service to employ any other person as an employee and 
           included the agent and manager
"foreign employee" means an employee who is not a  citizen or permanent resident of Malaysia
"medical officer" means a registered medical practitioner who is employed  in a medical capacity by the Government
"part-time employee" means an employee whose average hours of work do not exceed 70% of the normal hours of work of a 
          full-time employee employed in a similar capacity       
"principal" means any person who contracts with a contractor for the execution by the contractor of the whole or any part of any 
          work undertaken by the principal
"registered medical practitioner" means a medical practitioner registered under the Medical Act 1971
"spred over period of ten hours" means a period of ten consecutive hours to be reckoned from the time the employee commences 
          work for the day, inclusive of any period or periods of leisure, rest or break within such period of ten consecutive hours
"wage period" means the period in respect of which wages earned by an employee are payable
"wages" means basic wages and all other payment in cash payable to an employee for work done in respect of his contract of service 
          but does not include:
(a)   accommodation, food, fuel, light, water, medical attendance
(b)   EPF contributon, retrenchment, termination, lay-off or retirement scheme
(c)   travelling allowance    
(d)   sum payable to defray expenses entailed by the nature of employment
(e)   gratuity
(f)   bonus
"week" means a continuous period of seven days
2. CONTRACTS OF SERVICE ("CS")
2.1 Nothing in any CS shall in any manner restrict the right of any employee to join or to participate in the activities of  a registered trade union
2.2 A CS exceeding one month shall be in writing
2.3 A clause shall be included in the written CS setting out the manner in which such contract may by terminated
2.4 The length of notice to terminate the CS shall be determined in accordance with the notice stated in the CS or in the absence of such provision, the following shall apply:
(a)   4 weeks' notice if the employee has been employed for less than 2 years 
(b)   6 weeks' notice if he has been employed for 2 years or more  but less than 5 years
(c)   8 weeks' notice if he has been employed for 5 years or more
2.5 The length of notice shall be the same for both employer and employee
2.6 Either the employer or the employee may terminate the CS without notice in the event of any wilful breach by the other party of a condition of the CS.  
2.7 If notice has already been given, either the employer or the employee may  terminate the CS  without waiting  for the expiry of that notice, by paying the other party an indemnity of a sum equal to the amount of wages which would have accrued to the employee  during the unexpired days of notice
2.8 An employer may, on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of his services, after due enquiry -
(a)   dismiss without notice the employee;
(b)   downgrade the employee; or
(c)   impose any other lesser punishment as he deems just and fit, and where a punishment of suspension without wages is
       imposed, it shall not exceed a period of two weeks
2.9 For the purpose of an inquiry, the employer may suspend the employee from work for a period not exceeding two weeks but shall pay him not less than half his wages for such period:
Provided that if the inquiry does not disclose any misconduct the employer shall restore the full amount of wages so withheld
2.10 An employee shall be deemed to have broken his CS if he has been continuously absent from work for more than two consecutive working days without prior leave from his employer, unless he has a reasonable excuse for such absence and has informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during such absence
3. PAYMENT OF WAGES
3.1 Every employer shall pay the wages to his employee not later than the 7th day after the last day of wage period 
3.2  The wage period shall not exceed one month
3.3 No employer shall make an advance of wages which exceeds the amount earned in the preceding month unless such advance is made to enable him:
(a)   to buy or improve a house
(b)   to buy land
(c)   to buy livestock
(d)   to buy motorcar, motorcycle or bicycle
(e)   to buy shares in the company
4. DEDUCTIONS OF WAGES
4.1 The following deductions is permissible:
(a)   overpayment of wages made during the immediately three months 
(b)   indemnity due to the employer by the employee arising from the unexpired days of notice terminating the CS
(c)   recovery of advance of wages 
(d)   authorised by law
(e)   requested in writing by the employee for union or co-operative society entrance fee, subscription, instalments and interest 
       on loan or other dues and payment of shares in the company
4.2 The total deduction in respect of any month shall not exceed 50% of the wages earned by the employee in that month.  This shall not apply to deduction on the termination of CS
5. MODE OF PAYMENT OF WAGES
5.1 The wages payable to any employee shall be paid to him in legal tender
5.2 With the employee's written payment may be made through a bank or by cheque
5.3 Interest on advances is forbidden
6. PRIORITY OF WAGES
6.1 The court shall not authorize payment to secured creditor until the court have ascertained and caused to be paid, out of the proceeds of sales, the wages of any employee
6.2 In this paragraph "wages" includes termination and lay-off benefits, annual leave pay, sick leave pay, public holiday pay and maternity allowance
7. CONTRACTORS AND PRINCIPALS
7.1 Where a principal contracts with a contractor for the execution of the whole or any part of any work and any wages are due to any employee by the contractor, the principal and the contractor shall be jointly and severally liable with the employer to pay such wages provided that - 
(a)   in the case of a contract for constructional work the principal shall not be liable for the payment of wages unless he is 
       also a constructional contractor or a housing developer;
(b)   the principal and the contractor shall not be liable to any employee for wages due for more than three months and
(c)   the employee shall have made a complaint to the labour office within 90 days from the date such wages became due
7.2 Any person who has paid wages under the above circumstance may institute civil proceedings against such employer for the recovery of the wages so paid
8. EMPLOYMENT OF WOMEN
8.1 No employer shall require any female employee to work in  any industrial undertaking between  10.00 p.m. and  5 a.m.  
unless approved by the Labour Office
8.2 No female employee shall commence work for the day without having had a period of 11 consecutive hours from from such 
work
9. MATERNITY  PROTECTION
9.1 Every female employee shall be entitled to maternity leave  for a period of not less than 60 consecutive days ("eligible period")
9.2 Where she is entitled to maternity leave but is not entitled to receive maternity allowance she may, with the consent of the employer, commence work at any time during the eligible period if she has been certified fit by a registered medical practitioner
9.3 She shall be entitled to receive maternity allowance for the eligible period if  she has been employed at any time in the four month immediately before her confinement and not less than 90 days during the 9 months immediately before her confinement
9.4 Maternity allowance for each day shall be equivalent to one day ordinary rate of pay
10. REST DAYS, HOURS OR WORK, HOLIDAYS AND OTHER CONDITIONS OF SERVICE
10.1 Rest Day
(a)   Every employee shall be allowed a rest day in each week; where there is more than one rest day in a week the last of 
       such rest day shall be the rest day provided that this shall not apply where an employee is on maternity leave or sick 
       leave or during temporary disablement under Workmen's Compensation Act or Employees Social Security Act
(b)   For an employee engaged in shift work,  any continuous period of not less than 30 hours shall constitute a rest
(c)   The employer shall prepare a roster informing the employees of the rest days 
10.2 Work on Rest Day
(a)   For daily or  hourly rated employee, he shall be paid :
       Work which does not exceed half day :  one day's wages at the ordinary rate of pay 
       Work which exceeds half day but does not exceed one day :  two days' wages at the ordinary rate of pay
(b)   For monthly rated employee, he shall be paid :
       Work which does not exceed half day : half day's wages at the ordinary rate of pay
       Work which exceeds half day but does not exceed one day : one day's wages at the ordinary rate of pay
(c)   For any work carried out in excess of the normal hours of work by a daily rated, hourly rated or monthly rated 
        employee, he shall be paid not less than two times his hourly rate of pay
  (d)  For piece rated employee he shall be paid two times his rate per piece
10.3 Hours of Work
  (a)   Except hereinafter provided, an employee shall not be required to work :
       (i)      more than 5 consecutive hours without a rest of not less than 30 minutes
       (ii )    more than 8 hours a day
       (iii)    more than a spread over period of 10 hours a day 
       (iv)    more than 48 hours a week
       Provided that :
       (i)      where work requires continual attendance, an employee may be required to work for eight consecutive hours 
                 inclusive of not less than 45 minutes of rest
       (ii)     where the numbers of working hours in a day is less than 8, the limit of 8 hours may be exceeded on the remaining
                days of the week but so that no employee shall required to work for more than 9 hours a day or 48 hours a week
(b)   An employee may be required to work on a rest day in access of the above limit, in case of :
       (i)      accident in work place
       (ii)     work essential to life of community
       (iii)    work essential to security of Malaysia
       (iv)    urgent work to machinery
       (v)     interruption to work
       (vi)    essential to Malaysia economy or essential service
(c)   "Overtime" means work carried out in excess of the normal hours of work  per day
       "normal hours of work" means the usual hour of work per day
       "hour of work" means the time during which an employee is at the disposal of the employer
(d)   For any overtime work, an employee shall be paid at a rate not less than one and half times his hourly rate of pay
(e)   The limit of overtime work shall be 104 hours in any one month provided that work carried out on a rest day or public 
       holiday shall not be construed as overtime work       
10..4 Shift Work
(a)   Notwithstanding the above, an employee who is engaged in shift work may be required to work more than 8 hours 
        a day  or more than 48 hours a week but the average number of hours worked over any period of 3 weeks shall 
        not exceed  48 hours per week
(b)   Except in the circumstance described in 10.3 (b) above, no employee shall  work for more than 12 hours a day
10.5 Holidays
(a)   Every employee shall be entitled to a paid holiday at his ordinary rate of pay on 10 gazetted public holidays in any one 
       year, 4 of which shall be - 
       (i)      the National Day
       (ii)     Birthday of the Yang di-Pertuan Agong
       (iii)    Birthday of  the Ruler/Yang di-Pertua Negeri/Federal Territory Day
       (iv)    the Workers' Day
       Provided that if any of the said public holidays falls on a rest day, the working  day following immediately thereafter shall 
       be a paid holiday in substitution therefor
(b)   The employer shall exhibit before the commencement of each year a notice specifying the public holidays 
(c)   Where any of the public holidays falls within the period during which an employee is on sick leave or annual leave the 
       employer shall grant another day as a paid holiday in substitution therefor
(d)   An employee who absents himself from work on the working day immediately preceding or immediately succeeding a  
       public holiday(s)  without the prior consent of his employer shall not be entitled to any holiday pay for such holiday(s)
       unless he has a reasonable excuse for such absence
(e)   An employee who works on a holiday shall, in addition to the holiday pay he is entitled to for that day, be paid two days 
       wages at the ordinary rate of pay                 
(f)   For overtime work carried out in excess of the normal hours of work, he shall be paid at a rate not less than 3 times his 
       hourly rate of pay
10.6 Annual Leave
(a)   An employee shall be entitled to annual leave on each anniversary of service as per schedule below

Anniversary of Service

Number of Days 
1st           8
2nd           8
3rd          12
4th          12
5th           12
              6th and after          16
(b)  At the time of terminating the service, the entitlement to paid annual leave shall be in direct proportion to the number of 
       completed months of services provided that any fraction  of a day so calculated which is less than half day shall be 
       disregarded and where the fraction of a day is half or more it shall be deemed to be one day
(c)   Where an employee who is on paid annual leave becomes entitled to sick leave or maternity leave, the employee shall be 
       granted the sick leave or maternity, as the case may be, and the annual leave shall be deemed not been taken 
(d)   The employer shall grant and the employee shall take such leave not later than 12 months after the end of every 12   
       months services and   any employee who fails to take such leave at the end of such period shall thereupon cease to be
       entitled thereto
10.6 Sick Leave
(a)   An employee shall, after examination at the expenses of the employer -
       (i)    by a Company's doctor; or
       (ii)    if no such doctor is appointed or, if having regard to the nature or circumstances of the illness, the services of the 
               doctor are not obtainable within a reasonable time or distance, by any other registered medical practitioner or by a 
               medical officer
       be entitled to paid sick leave -
       (i)    where no hospitalisation is necessary as follow:

              Number of years of service

Number of days in each calendar year
              less than 2 years                          14
              2 years or more but less than 5 years                          18
              5 years or more                          22
       (ii)   60 days in each calendar year where hospitalisation is necessary 
(b)   An employee shall also be entitled to paid sick leave  after examination by a dental surgeon 
(c)   The total number of days of paid sick leave in a calendar year shall not exceed 60 days in the aggregate
(d)   An employee who absents himself on sick leave -
       (i)    which is not certified by a registered medical practitioner or a medical officer or a dental surgeon; or
       (ii)   which is certified but without informing or attempting to inform his employer of such sick leave within 48 hours of the 
              commencement thereof  shall be deemed to absent himself from work without the permission   of his employer and
              without reasonable excuse 
(e)   No employee shall be entitled to paid sick leave while receiving  maternity allowance or while receiving compensation
         for disablement under the Workman Compensation Act or under the Employees Social Security Act
10.7 Interpretation
(a)   "ordinary rate of pay" means wages as defined above which an employee is entitled to receive for one day but does 
        not  include any payment made under an approved incentive scheme or any payment for work done on rest day or
        public holiday
(b)   "hourly rate of pay" means ordinary rate of pay divided by the normal hours of work
(c)   For monthly rated employee, the ordinary rate of pay shall be calculated according to the following formula:
                                       monthly rate of pay
                                                   26 
(d)   For weekly rated employee, the ordinary rate of pay shall be calculated according to the following formula:
                                        weekly rate of pay
                                                    6
(e)   For daily rated or piece rated employee, the ordinary rate of pay shall be calculated by dividing the total wages earned   
       during the preceding wage period (excluding any payment made under an approved incentive scheme or any payment
       for work done on rest day or public holiday) by the actual number of days he had worked during that wage period
       (excluding any rest day or public holiday);
       Provided that for the purpose of payment of sick leave, the ordinary rate of pay shall take account only the basic pay    
       he  received or the rate per piece for work done in a day
11 TERMINATION, LAY-OFF AND RETIREMENT BENEFITS
Termination
11.1 An employer shall be liable to pay termination or lay-off benefits to an employee who has been employed for a period of not 
less than 12 months
11.2 An employee shall  be entitled to termination benefits where his service is terminated for whatever reason otherwise than -
(a)   upon retirement
(b)   on ground of misconduct
(c)   upon resignation
11.3 An employee shall not be entitled to termination benefits 
(a)    if his contract of service is renewed or re-engaged on terms not less favourable  
(b)    if 7 days before the service is terminated, the employer has offered  to renew his contract of services or to re-engage 
        him under a new contract on terms not less favourable  and the employee has unreasonably refused that offer
(c)    if he leaves the service before the expiration of the notice -
        (i)   without the prior consent of the employer, which consent shall not be unreasonably withheld; or
        (ii)   without having made payment to the employer (indemnity accrued for unexpired days of notice)
Lay-off
11.4 An employee shall be deemed to be laid-off if the employer does not provide work for him and he receive no pay for 12 or 
more working days within 4 consecutive weeks provided that which period shall not include a rest day, public holiday, sick leave, maternity leave and annual leave
Amount of termination or lay-off benefits payment
11.5 The amount of termination or lay-off benefits payment shall not be less than:
Length of service Number of days for each year of service
 Less than 2 years  10 days wages
2 years or more but less than 5 years 15 days wages
5 years or more 20 days wages
and pro-rata in respect of an incomplete year, calculated to the nearest month
11.6 "wages" shall have the meaning assigned in paragraph 1 above
"a day's wages" shall be computed in such manner so as to give the employee his average day's wages calculated over the period of 12 completed months service immediately preceding the relevant date
11.7  The termination or lay-off benefits payment shall be in addition to any payment for indemnity accrued for any expired days of notice
11.8 Any such payment shall be paid not later than 7 days after the relevant date
12 EMPLOYMENT OF FOREIGN EMPLOYEES
12.1 An employer who employs a foreign employee shall, within 14 days furnish his  particular to the nearest labour office
12.2 The labour office may inquire into any complaint  from either a local employee or a foreign employee in respect of any discrimination in the terms and conditions of employment
12.3 An employer shall not terminate the service of a local employee unless he has first terminate the services of all foreign employees employed in a capacity similar to that of the local employee
13 REGISTERS, RETURNS & INSPECTION 
13.1 Every employer shall keep a register containing the particulars of each employee and to preserve such register for a period of  not less than 6 years
13.2 An employer  shall, within 90 days of commencing of business, furnish  the nearest labour office with particulars of the business undertaking
13.3 The Labour Officer shall have power to enter any place of employment to make inquiry in relation to any matter within
the provisions of the  Act
13.4 The Labour Officer may examine any person whom he believes to be acquainted with the facts of any matter within
the provisions of the Act
13.5 The Labour Officer may require the employer to produce any contracts of services, books of accounts of wages, registers,
and any other documents relating to employment
13.6 A Labour Officer exercising the  powers shall in possession of an official identification card and shall produce such card
on demand to the employer
14 COMPLAINTS & INQUIRES
14.1 The Labour Officer may inquire into and decide any dispute between an employee and his employer in respect of wages
14.2 In addition he may inquire into and confirm or set aside any decision made by an employer under section 14(1)  of the Act (paragraph 2.8 above) provided the employee has made such complaint within 60 days from the relevant date
14.3. Notwithstanding the provisions of the Act, the Labour Officer may inquire into any dispute involving employee whose wages exceedRM 1,500.00 but does not exceed RM 5,000.00 provided that such wages does not include any payment of commission, subsistence allowance or overtime 

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