Malaysian Employment Act and Malaysian Labour Law

An Overview
By Tan Thai Soon

Introduction
Malaysian Employment Act and Malaysian Labour Law provide a minimum standards guides to Malaysian employers and foreign investors in Malaysia. The Employment Act is applicable to lower income group, however its provisions and regulations could be regarded as the minimum standard applicable to everyone under employment. Both employer and employee can however exercute an employment contract with terms and conditions higher than that provided in the Act.

Disclaimer
All content on this website, including articles, journal and weblinks is for information purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of professional advise.

Section 1 - Short Title and Application
(1) This Act may be cited as the Employment Act 1955
(2) This Act shall apply to West Malaysia only

Objectives of The Employment Act
1. To provide minimum standards in respect of hours of work and overtime, rest days, public holidays, annual and sick leave, maternity benefits, termination and lay-off benefits etc.

2. To protect employees in respect of payment of wages in legal tender, deductions, priority of wages, protection of female employees.

3. To provide an avenue to employees or employers to claim or settle the amount due under the contract or the Act.

4. To provide for the administration or enforcement of the Act and punishment of offenders.


Applications of the Act
There are three general circumstances underwhich this Act may be applicable.

a) Where an organization commence business and hire the first employee. The provisions relate to contract of service, payment of wages, and the minimum benefit due to the employee.

b) Where an organization under restructuring, merger and acquisition, and relocation. The provisions relate to termination, lay-off and retirement benefits.

c) Where an organization is put under receivership by the financial institution or has been wound up by the court. The laws relate to the retrenchment benefit and priority of payment.