The Employment Act 1955 is one of the most important labor laws in Malaysia. It outlines the rights and responsibilities of employers and employees and sets minimum standards for working conditions, wages, and benefits. In this article, we will discuss in detail the Employment Act 1955, its provisions, and its implications for employers and employees in Malaysia.
Provisions of the Employment Act 1955
The Employment Act 1955 covers all employees in the private sector in Malaysia, except for domestic workers, employees of the government, and those in managerial or executive positions. The act covers a wide range of employment matters, including:
- Contract of Service
The Employment Act 1955 sets out the requirements for a valid contract of service. According to the act, a contract of service must be in writing, and it must contain the terms and conditions of employment, including the job description, salary, and benefits. Employers are required to provide employees with a copy of their contract of service within 14 days of the start of employment.
- Hours of Work
The act specifies that employees should not work more than 48 hours per week, and they must be given at least one rest day per week. Overtime work is permitted, but it should not exceed 104 hours per month. The overtime rate should be at least one and a half times the normal hourly rate.
- Wages and Benefits
The Employment Act 1955 sets out the minimum wage rates for different types of work and industries. The minimum wage rates are revised from time to time by the government. Employers are required to pay their employees on time, and they must provide employees with certain benefits, such as annual leave, sick leave, and public holidays.
- Termination of Employment
The act sets out the requirements for terminating an employee’s contract of service. Employers are required to provide employees with notice of termination, and the notice period should be based on the length of service. If an employee has been with the company for less than two years, the notice period is one week. For employees who have been with the company for two years or more, the notice period is two weeks. Employers may terminate an employee’s contract without notice if the employee has committed serious misconduct.
- Industrial Relations
The Employment Act 1955 also covers industrial relations matters, such as trade unions, collective bargaining, and dispute resolution. The act recognizes the right of employees to form and join trade unions, and it sets out the procedures for collective bargaining and dispute resolution.
Implications for Employers
Employers in Malaysia must comply with the provisions of the Employment Act 1955. Failure to comply with the act can result in penalties and legal action. Employers must ensure that their employment practices are in line with the act, including:
- Providing Employees with Written Contracts
Employers must provide their employees with written contracts of service, which should contain all the terms and conditions of employment. Employers should ensure that the contracts are clear and concise and that they comply with the requirements of the act.
- Ensuring Compliance with Hours of Work and Overtime
Employers must ensure that their employees do not work more than 48 hours per week and that they are given at least one rest day per week. Employers should also ensure that they pay their employees the correct overtime rates and that they do not exceed the maximum number of overtime hours per month.
- Providing Employees with the Appropriate Wages and Benefits
Employers must pay their employees at least the minimum wage rates set out in the act and provide them with the appropriate benefits, such as annual leave, sick leave, and public holidays. Employers should also ensure that they pay their employees on time.
- Complying with the Requirements for Termination of Employment
Employers must comply with the requirements for terminating an employee’s contract of service. They must provide employees with notice of termination and adhere to the notice period based on the length of service. Employers must also have a valid reason for terminating an employee’s contract of service and follow the proper procedures.
- Complying with Industrial Relations Matters
Employers must recognize their employees’ right to form and join trade unions and follow the procedures for collective bargaining and dispute resolution. Employers must not interfere with their employees’ rights to join a union or engage in collective bargaining.
Implications for Employees
The Employment Act 1955 protects the rights of employees in Malaysia and sets out the minimum standards for working conditions, wages, and benefits. Employees should be aware of their rights under the act, including:
- Having a Valid Contract of Service
Employees should ensure that they have a valid contract of service with their employer that contains all the terms and conditions of employment. Employees should also ensure that the contract complies with the requirements of the act.
- Ensuring Compliance with Hours of Work and Overtime
Employees should ensure that they do not work more than 48 hours per week and that they are given at least one rest day per week. Employees should also ensure that they are paid the correct overtime rates and that they do not exceed the maximum number of overtime hours per month.
- Receiving the Appropriate Wages and Benefits
Employees should ensure that they are paid at least the minimum wage rates set out in the act and that they receive the appropriate benefits, such as annual leave, sick leave, and public holidays. Employees should also ensure that they are paid on time.
- Understanding the Requirements for Termination of Employment
Employees should understand the requirements for termination of their contract of service and ensure that their employer follows the proper procedures. If an employee feels that their employer has terminated their contract unfairly, they can seek legal advice and challenge the termination.
- Exercising Their Rights to Join a Union and Engage in Collective Bargaining
Employees have the right to join a union and engage in collective bargaining. If an employee feels that their employer is not complying with the requirements for industrial relations matters, they can seek the assistance of their union or file a complaint with the relevant authorities.
Conclusion
The Employment Act 1955 is an important labor law in Malaysia that outlines the rights and responsibilities of employers and employees. Employers must comply with the provisions of the act to avoid penalties and legal action. Employees should be aware of their rights under the act and ensure that their employer complies with the requirements. By understanding the Employment Act 1955, employers and employees can work together to create a safe and fair working environment.
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