1. ASSIGNMENT - Employment and Industrial Law

8/10/2019 1. ASSIGNMENT - Employment and Industrial Law

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OUM BUSINESS SCHOOL

JANUARY/ 2014

BBMC4103

CHANGE MANAGEMENT

NO. MATRIKULASI :

NO. KAD PENGNEALAN :

NO. TELEFON :

E-MEL :

PUSAT PEMBELAJARAN : MIRI LEARNING CENTRE


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DESCRIPTION PAGE NUMBER

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In order endorse various investments and economic growth, the Malaysian government had

gone through a great development and encourages a pleasant relationship between employersand employees !ommonly, Malaysia has had no mani"estation o" crippling wor#er stri#es,


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loc# outs and demonstrations "or over the past ten to "i"teen years $roblems are usually

resolved in an atmosphere o" willingness and intervention between parties including trade

unions

%he ma&or employment laws in the country that directly impact the employment relationship

are the 'mployment (ct o" 1955 )'(* and the Industrial +elations (ct 196 )I+(* %he '(

administrates the matters relating to employment in Malaysia and it applies to most

employees whose wages do not e-ceed +M1,5.. )/0 1 +M322* or who are engaged in

speci"ied wor# which are manual labour or overseeing manual labour, operation or

maintenance o" a motor vehicle with the irrespective o" salary amount )(ri"" et al, 199*

%he employment terms and conditions o" employees above this wage level or those who are

otherwise outside the ambit o" the '(, are governed by common law and by their

employment contracts %he main areas covered by the '( are terms relating to employment

contracts, including the termination o" contracts, maternity protection, days and hours o"

wor#, annual leave, public holidays, termination and layo"" bene"its and methods o" dealing

with complaints and enuiries

(ccording to uruvilla 0 )1993*,

7abour law is also #nown as employment law mediates the relationship between wor#ers

employees, employers, trade unions and the government !ollective labour law relates to the

tripartite relationship between employee, employer and union Individual labour law concerns

employee8s rights at wor# and through the contract "or wor# 'mployment standards are

social norms which in some cases also technical standards "or the minimum socially

acceptable conditions under which employees or contractors are allowed to wor#

7abour law arose in parallel with the Industrial +evolution as the relationship between

wor#er and employer changed "rom small scale production studios to largescale "actories

or#ers sought better conditions and the right to &oin or avoid &oining a labour union, while

employers sought a more predictable, "le-ible and less costly wor#"orce %he state o" labour

law at any one time is there"ore both the product o", and a component o" struggles between

various social "orces (s 'ngland was the "irst country to industrialise, it was also the "irst to

"ace the o"ten appalling conseuences o" capitalist e-ploitation in a totally unregulated and

laisse:"aire economic "ramewor# ;ver the course o" the late 1th and early to mid


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nineteenth century the "oundation "or modern labour law was slowly laid, as some o" the

more egregious aspects o" wor#ing conditions were steadily ameliorated through legislation

%he basic "eature o" labour law in almost every country is that the rights and obligations o"

the wor#er and the employer are mediated through a contract o" employment between the

two %his has been the case since the collapse o" "eudalism Many contract terms and

conditions are covered by legislation or common law In the /0 "or e-ample, the ma&ority o"

state laws allow "or employment to be at will, meaning the employer can terminate an

employee "rom a position "or any reason, so long as the reason is not e-plicitly prohibited

( contract o" employment is a category o" contract used in labour law to attribute right and

responsibilities between parties to a bargain ;n the one end stands an


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there"ore wor# they do "or others should not carry with it an obligation to loo# a"ter these

rights

;ne e-ample o" employment terms in many countries is the duty to provide written

particulars o" employment with the terms and conditions o" employment to an employee %his

aims to allow the employee to #now concretely what to e-pect and what is e-pected It covers

items including compensation, holiday and illness rights, notice in the event o" dismissal and

&ob description %he contract is sub&ect to various legal provisions (n employer may not

legally o""er a contract that pays the wor#er less than a minimum wage (n employee may

not agree to a contract that allows an employer to dismiss them "or illegal reasons

In Malaysia employment law is outlined in the 'mployment (ct 1955 and the Industrial

+elations (ct 196, which deal with relations between employers, employees and trade

unions %he 'mployment (ct gives minimum terms and conditions "or manual wor#ers and

nonmanual wor#ers who earn less than a de"ined amount It covers "ulltime, parttime,

temporary and contract employment )Ministry o" >uman +esources, 199*

$arttime wor# is classed as being employed "or less than . percent o" the time o" a "ulltime

employee in a similar &ob !asual wor#ers, who are hired only when needed, are not covered

by the 'mployment (ct

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or#ing hours "or employees covered by the 'mployment (ct must con"orm to the

"ollowing?

Ma-imum o" 4 hours per wee#

@o more than eight hours o" wor# per day

Ma-imum o" ten hours o" wor# spread over a day

@o more than "ive hours straight without a minimum rest period o" 3. minutes

;ne day o"" per wee#

2.2 E,#,+! !"&!)

(nybody employed in Malaysia "or longer than one month must have a written employment

contract or


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Minimum wage law applies to some industries and sectors in some territories Many

employees have &obs "or which there is no legal minimum wage

3.0 I,#"!&+ #* T+",) $ C#$'!'#) #* E,#,+!)

%he central "ocus o" most employment contracts is wages "or wor# >owever, other essential

terms might be notice periods in the event o" dismissal, holiday pay rights, and the place o"

wor# and pension schemes Many &urisdictions reuire these "actors to be set out in a written

contract In terms o" pay which the employee may be compensated through wages, a salary, or

by commission In addition to monetary compensation, the employment contract o"ten

speci"ies a "ringe bene"it pac#age, including a retirement plan, employee stoc# options,

holiday entitlement, reuired hours o" wor#, and also the health insurance bene"its

@ormally, such contracts provide "or termination o" employment, by either party, and include

associated matters such as notice period, compensation arrangements and, sometimes, garden

leave

0ome employers also use nondisclosure and noncompeted clauses to protect their trade

secrets "rom being dispersed when employees leave epending on where you live, the laws

regarding en"orceability o" these clauses vary widely

In certain circumstances, an employer=s conduct could be such that an employee is entitled to

resign in response and to regard that as an un"air BconstructiveB dismissal Cailure by an

employer to e-tend a "i-ed term contract can also be an instance where a claim "or un"air

dismissal may be made

'mployment regulations play a #ey role in the development o" any business 0ometimes,

building a team with complementary s#ills involves little more than a uic# chat with

someone who has been introduced to them by a business associate @o psychometric tests,

re"erences or "ormal contracts o" employment here


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;"ten, employees or team members are ta#en on without su""icient protection in terms o"

valuable intellectual property or a means to prevent Dmoonlighting8 or un"air competition

when they leave

'merging businesses and entrepreneurs can have the basis o" a "antastic business, but, once

they start employing people, things can go wrong

'mployees can rip companies o"" by stealing their ideas or passing them on to subseuent

employers, who have not invested heavily in the underlying research and development 'ven

i" employees do not ta#e ideas or indulge in un"air competition, poor per"ormance can itsel"

damage the business @ot only that but any attempt to discipline or improve the errant

employees can lead to employment tribunal claims, where, "or e-ample, unlimited damages

can be awarded where discrimination is proved

riting contracts should be worded clearly to avoid any misunderstanding, also the &ob

description should be easy to "ollow so the employee can show "le-ibility in their &ob role

%erms and conditions o" employments are important because it shows the employer and the

employee clearly the rights and the responsibilities "or each one o" the people who wor# in

the organisation and to ma#e sure that everything in the environment is sa"e and "air

%erms and conditions are related to the hours o" wor#, as "or the e-ample, normal hours, and

overtime, e-pected out o" hours wor# "or e-ample i" the employer as#ed the employee to do

something that is not written in the contract, then the employee will have the right not to do

the &ob because it8s not written on the agreement document

%erms and conditions allow the employer to speci"y an employee8s duties and responsibilities

so an employee #nows e-actly what is e-pected "rom them %erms and conditions are mainly

important about sa"ety "or the employer and the employee

%hey are there to ma#e it clear to both employer and employee where each stand %o let them

each #nows their responsibilities and care "or each other It is best to have such an agreement

so that i" anything does go wrong, both sides has a clear understanding what rights each have

(s "or our "urther discussions, there are 3 items that could happen towards employee and


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employers which I thin# it is a big issue in the employment terms and conditions topic and

they are?

%ermination o" 'mployees

iscrimination o" 'mployees

0e-ual >arassment

%here are many employers that do not provide its employees with an employment contracts

%hey always dream that Bi" it is not in writing, then it does not e-ist,B nor Bi" there is no

written contract, then we can do what we li#e with our employeesB %hese are not dreams

these are nightmares which are sure to land the employer in court

'very employer is reuired by law to provide the employee with a written contract o"

employment not later that the "irst day o" commencement o" employment Cailure to do so

could land the employer in &ail "or a term o" imprisonment or to liability "or a he"ty "ine

%he contract o" employment is a vital document which it regulates the terms and conditions

o" employment between the employer and the employee It stipulates what the employer will

provide in terms o" bene"its, and in terms o" labour legislation, and it speci"ies what the

employee is entitled to receive in terms o" company policy, company bene"its, and labour

legislation

It also regulates the behaviour o" the employee in the wor#place because all company policies

and procedures, as well as your disciplinary code, "orm a part o" the employment contract I"

there is no contract regulating these matters, it is e-tremely di""icult to ta#e action against the

employee, i" there is no contract, or i" the employee has never been in"ormed, then he has the

right to conclude that it does not e-ist


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4.0 S%+)!'#)

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In Malaysia, termination o" employment "alls under the purview o" the '( )'mployment

(ct*, the 'mployment )%ermination and 7ay;"" Eene"its* +egulations 19. )19.

+egulations*, and the I+( (lthough the provisions o" the '( only cover '( employees,

these principles o" law are generally considered as guidelines "or most employeremployee

relationships, particularly in the absence o" a written contract o" service

%he I+( addresses the issue o" unions, trade disputes and dismissals It also mandates that an

employment relationship cannot be terminated without &ust cause or e-cuse hile


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%he Malaysian !ode o" !onduct "or Industrial >armony, which is not legally prescribed by

legislation but is ta#en note o" by the Industrial !ourt, provides guidelines "or the selection o"

a""ected employees %he guidelines speci"y the "ollowing criteria?

%he need "or the e""icient operation o" the organi:ation

%he ability, e-perience, s#ill and occupational uali"ications o" wor#ers

%he consideration "or length o" service and whether employees are casual, temporary

or permanent

%he age o" the employee

%he employee8s "amily situation

%he last in and "irst out principle whereby the last person employed should be the "irst

person retrenched

%he '( also outlines how and when a contract o" service may be terminated /nder the '(, a

contract o" service "or a speci"ied period o" time or the per"ormance o" a speci"ied piece o"

wor# lapses when the period e-pires or when the wor# is completed here the contract o"

service is "or an unspeci"ied period o" time, the contract may be terminated by either party by

giving notice o" termination as speci"ied in the contract In the absence o" a written provision

as to the length o" notice reuired, Malaysian law provides that the period o" notice shall notbe less than?

Cour wee#s "or employment o" less than two years

0i- wee#s "or employment o" two years or more but less than "ive years

'ight wee#s "or employment o" more than "ive years

In lieu o" notice, an employer may pay wages to an employee in the amount euivalent to theperiod o" notice >owever, regardless o" compliance with the notice period or the payment o"

bene"its, the I+( provides that there must be &ust cause or e-cuse In cases o" retrenchment,

employers are also reuired to report to the Malaysian irector Feneral o" Manpower at least

one month be"ore carrying out the layo""

/nder the provisions o" the 19. +egulations, an employee who has been retrenched or

whose service has been terminated as the result o" redundancy is entitled to certain bene"its

%hese bene"its include?


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1. day8s wages "or every year o" employment o" more than 12 months but less than

two years

15 day8s wages "or every year o" employment o" two years or more but less than "ive

years

2. day8s wages "or every year o" employment o" "ive years or more

here an employee has only wor#ed "or a portion o" a year, payment is to be prorated and

calculated to the nearest month o" employment %hese bene"its are in addition to wages paid

in lieu o" notice

4.2 E,#,+! D')&"','!'#

/ntil recently, Malaysia had no legislation governing employment discrimination, although

the Cederal !onstitution does state that there shall be no discrimination against citi:ens on the

ground o" religion, race, descent or place o" birth ;n 0eptember 2, 2..1, (rticle )2* o" the

Cederal !onstitution was amended to prohibit gender discrimination through the !onstitution

(ct 2..1

%his, however, has yet to be encapsulated in any speci"ic legislation In 2..1, the 7abour

epartment o" the Malaysian Ministry o" >uman +esources issued the !ode o" $ractice "or

the 'mployment o" the isabled in the $rivate 0ector


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%hough the isability !ode sets out the certain responsibilities o" both the employer and the

disabled employee, li#e other similar !odes relating to employment, there are no legal

sanctions "or noncompliance

%he Malaysian Fovernment recently passed the $ersons with isabilities (ct 2.. )$(* It

will be the "irst speci"ic antidiscrimination law in Malaysia that applies in the wor#place

/nder the $(, employers are now legally reuired to ensure that employees with

disabilities are accorded &ust and "avourable wor# conditions and eual remuneration to those

without disabilities

>owever, it is not e-pressly clear whether the $( will cover both employees as well as &ob

applicants (t present, the protections under the $( only e-tend to current employees More

detailed guidelines and standards will presumably be promulgated by the @ational !ouncil

"or $ersons with isabilities andGor the Minister o" >uman +esources in accordance with the

$( $ending such guidelines and standards, the e-act impact on the employment landscape

remains to be seen

%he epartment o" ;ccupational 0a"ety and >ealth o" the Malaysian Ministry o" >uman

+esources has also issued a !ode o" $ractice on $revention and Management o" >IH or

(I0 at the or#place on 0eptember 2..1 to reduce the spread o" the disease and guide

employers and employees in managing >IH or (I0 issues at the wor#place %he ob&ectives

o" this >IH or (I0 !ode are to?

$rovide guidelines to employers and employees on appropriate and e""ective ways o"

preventing and managing >IH or (I0 at the wor#place

$romote education and awareness on >IH or (I0

$romote a non&udgmental, nondiscriminatory wor# environment

Fenerally, employers in Malaysia may be liable "or un"air dismissal pursuant to the

employer8s discriminatory acts or omissions where they can be construed as evidencing intent

on the part o" the employer to no longer be bound by the terms o" the employment contract


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(s a "irst step to minimi:e discrimination problems at the wor#place, employers should set

up and implement inhouse mechanisms as outlined in the isability !ode, the $( and the

>IH or (I0 !ode 0uch measures should be implemented despite the codes not having the

"orce o" law, so as to promote positive employee relations More importantly, pursuant to the

$(, employers should now recogni:e and endeavour to "ul"il their new legal obligations

towards employees with disabilities to ensure eual and nondiscriminatory wor#place

practices and attitude

4.3 S+6% H")),+!

Malaysia does not have any legislation governing wor#place harassment >owever, in 1999,

the !ode o" $ractice on the $revention and 'radication o" 0e-ual >arassment in the

or#placeJ was promulgated )0e-ual >arassment !odeJ* %he 0e-ual >arassment !ode is

not legally binding, but companies are e-pected to adopt its recommendations

%he 0e-ual >arassment !ode contains guidelines "or the establishment and implementation

o" internal preventive and redress mechanisms "or dealing with se-ual harassment 0e-ual

harassment is de"ined under the 0e-ual >arassment !ode as any unwanted conduct o" a

se-ual nature having the e""ect o" verbal, nonverbal, visual, psychological, or physical

harassment that might, on reasonable grounds, be perceived by the recipient as?

$lacing a condition o" a se-ual nature on her or his employment

(n o""ence or humiliation, or a threat to her or his wellbeing, but that has no direct

lin# to her or his employment

%his de"inition is wideranging and covers almost every possible "orm o" se-ual harassment,

including verbal statements, gestures and physical conduct It also includes employment

related se-ual harassment that occurs outside the wor#place as a result o" employment

responsibilities or employment relationships "or e-ample, at wor#related social "unctions,

during wor#related travel or over the telephone


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%o success"ully combat se-ual harassment in the wor#place, employers are encouraged to set

up comprehensive inhouse mechanisms %he minimum elements o" such a mechanism, as

outlined by the 0e-ual >arassment !ode, include?

( policy statement "rom management prohibiting se-ual harassment in the

organi:ation

( clear de"inition as to what constitutes se-ual harassment

0ettingup a special complaintGgrievance procedure

!lear stipulation o" the disciplinary rules and penalties that will be imposed against a

harasser as well as against those who ma#e "alse accusations

Cormulation o" a set o" protective and remedial measures "or the victim

$romotional and educational programs to e-plain the company8s policy on se-ual

harassment and to raise awareness o" se-ual harassment among all employees

(lthough it is not legally binding, implementation o" the 0e-ual >arassment !ode and the

settingup o" inhouse inuiry boards will provide employees under harassment with an

avenue "or redress within their organi:ation

7.0 C#&%)'#

'mployment law is in place to guarantee a "air and sa"e wor#ing environment "or employers

and employees 0tatutes and strict rules outline, "or the employer, how their employee8s

should be treated within the wor#place Many employers and employees o"ten don8t realise

how many rules and regulations are covered by employment law, leading to con"usion "or

employers and employees ali#e %here are many aspects o" covered by employment law

which means employees can ta#e legal action "or being treated un"airly

Ee"ore recruiting new employees, employers should re"er to employment law to ensure they

are up to date with all aspects It is mandatory that employees and employees have a sound,

eual understanding o" employment law Cor instance, i" an employee "eels they are being

bullied or mobbed it is important they realise it is not acceptable and can ta#e legal action


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against an employer 'mployers need to understand employment law so they are providing an

optimal wor#ing environment "or employees

'uality within the wor#place ensures that everyone has eual opportunities and can8t be

denied promotion or training "or pre&udicial reasons 'mployers cannot discriminate against

employees because o" age, gender, nationality, pregnancy and maternity leave, se-ual

orientation, disabilities, race, ethnic bac#ground, religion and belie"s 7egal action can be

carried out, should an employee believe they are being treated un"airly due to pre&udice

or#ing time regulations state that employers can legally ma#e their employees wor# no

more than 4 hours a wee#, unless the employee agrees to opt outJ o" the 4hour wee#

%his is an agreement that employer and employee sign to say the wor#er can wor# more than

4 hours a wee# /npaid lunch brea#s, regular travel to and "rom wor#, voluntary unpaid

overtime and paid or unpaid holidays are not counted as wor#ing hours $aid overtime,

wor#ing lunches, wor#ing abroad "or a / based company and &obrelated training however,

are all included in the wor#ing wee#

%he >ealth and 0a"ety at or# (ct 194 is a large piece o" legislation which covers all

aspects o" health and sa"ety in the wor#place 'mployers have a duty o" careJ to ensure the

wor#ing environment is sa"e "or employees $rimarily, health and sa"ety re"ers to eliminating

ha:ards to prevent accidents and ensuring the wor#ing environment is sa"e 0hould an

employee be concerned about their health and sa"ety at wor#, they should spea# to their

employer and trade union I" spea#ing to their employer or trade union has no e""ect, they

should report the employer to the environmental health department o" their local authority

/nderstanding employment law is crucial "or employers and employees or#ers should

#now their rights so that they are not treated un"airly or di""erently to the rest o" the wor#ing

society 'mployers should understand employment law to avoid legal action being ta#en

against them through ignorance or lac# o" #nowledge in regards to employment law


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8.0 R+*+"+&+)

wwwwi#ipediaorgmy

(ri"", Mohammed, !hung, MK>, adir, ((, 'an, ; F, L 7aeImm, ' % )199*

!urrency %urmoil and the Malaysian 'conomy? Fenesis, $rognosis and +esponse, Malaysian

Institute o" 'conomic +esearch, uala 7umpur

uruvilla 0 )1993* arrod )eds* Industriali:ation and 7abour +elations? !ontemporary

+esearch in 0even !ountries, I7+ $ress, Ithaca, 216235

uruvilla, 0 and >all, )1999* Flobalisation and 'mployment +elations in the $hilippines,

+eport to International 7abour ;rganisation, Eang#o#

Ministry o" Cinance )199* 'conomic +eport 199G99, uala 7umpur

Ministry o" >uman +esources )199* Malaysia? 7abour and >uman +esource 0tatistics

19921996, uala 7umpur

@ational 'conomic (ction !ouncil )@'(!* )199* @ational 'conomic +ecovery $lan?

(genda "or (ction, 'conomic $lanning /nit, $rime Minister8s epartment, uala 7umpur

Malaysia, 1996

0eventh Malaysia $lan )1996* uala 7umpur Malaysian Industrial evelopment (uthority

1995 unpublished statistics
http://www.wikipedia.org.my/http://www.wikipedia.org.my/


18/18

@ational /nion o" Ean# 'mployees )@/E'* )1996* +eport "or the $eriod 1st (pril 1993 to

31st March 1996? 1th %riennial elegates !on"erence, uala 7umpur

Documents

1. ASSIGNMENT - Employment and Industrial Law