Amendments have been made to the Employment Act 1955 and according to the Human Resources Minister, M Saravanan, said amendments are slated to come into effect on 1 January 2023. The Employment (Amendment of First Schedule) Order 2022 will also come into effect on the same date. So, what are the amendments in question?
Amendments to the Employment Act
1) Inclusion of flexible working arrangement
As per section 60A, employees may apply for flexible working arrangements and section 60Q states that the employer has to approve or refuse the application within 60 days.
2) Increased maternity leave
Paid maternity leave has been increased from 60 days to 98 days as per section 37.
3) Introduction of paternity leave
According to section 60FA, married male employees shall be entitled to a paid paternity leave at his ordinary rate of pay for a period of 7 consecutive days.
4) 45-hour work week
Weekly working hours have been reduced from 48 hours to 45 hours as per section 60A.
5) Introduction of protection against termination on the grounds of pregnancy
As per section 41A, where a female employee is pregnant or is suffering from an illness arising out of her pregnancy, it shall be an offence for her employer to terminate her, except on the grounds of:
- wilful breach of contract of service,
- misconduct, or
- closure of the employer’s business.
It should be noted that under this section, the burden of proving that such termination is not on the ground of her pregnancy shall rest on the employer.
6) Presumption of employment
According to section 101, in the absence of a written contract of service, it shall be presumed that a person is 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.
7) Notice for sexual harassment
Employers will have to conspicuously exhibit a notice to raise awareness of sexual harassment in the workplace as per section 81H.
8) Employment of foreign employees
Under section 60K, prior to hiring foreign labour, employers must first obtain the approval of the Director General. Employers must also notify the Director General of any termination of foreign employees within 30 days from the date of termination. Failure to do so will result in a fine of not more than RM 100,000 or imprisonment for a term not more than 5 years, or both.
9) Power of the Director General
According to section 69F, the Director General now has the power to inquire into and decide any dispute between an employee and his employer in respect of any matter relating to discrimination in employment, and the Director General may, pursuant to such decision, make an order. Failure of the employer to comply with said order will result in a fine not exceeding RM50,000. In the case of a continuing offence, the employer shall be liable to a daily fine not exceeding RM1,000 for each day the offence continues after conviction.
10) Punishment for forced labour
As per section 90B, forced labour is an offence punishable with a fine not exceeding RM100,00 or imprisonment for a term not exceeding 2 years or both.
11) Court orders for payments due
Under section 87A, employers who commit an offence by not paying wages may be ordered by the court to make the payment due. Non-compliance with the order may result in distress proceedings or a fine as provided under section 283 of the Criminal Procedure Code.
12) Calculation of wages (incomplete month)
An employee’s wages for an incomplete month may be calculated with the following formula as provided in section 18A:
13) Increase in penalties
Section 99A is amended by substituting for the words “ten thousand ringgit” the words “fifty thousand ringgit”.
Amendments to the First Schedule
The Employment Act 1955 will apply to all employees irrespective of their wages post-amendment. However, sections 60(3), 60A(3), 60C(2A), 60D(3) and 60D(4) and section 60J would only apply to employees earning less than RM4,000 a month. For context, said sections are regarding overtime pay, rates payable for overtime work done on public holidays, rates payable for work done on holidays/half-working days and termination, lay-off and retirement benefits.
Conclusion
The amendments have been lauded as a step in the right direction for employees’ rights. Employers should take note of these amendments and take steps to comply with the amended Employment Act, be it by displaying the relevant notices in the workplace or by revising their terms and conditions of employment.
