Articles

In Part 1, we discussed the issues of the coverage of the employment law and the status of labour workers. In Part 2, we will address the issue of leaves and discrimination at work. The objective of this article is to help you understand the important issues that have been missed which may impact you directly or indirectly and why they ought to have been included in this round of the employment law amendments. Leaves (a) Paternity Leave The employment law prescribes different types of paid leaves which include sick leave, paid annual leave, maternity leave etc. However, it did not include paternity leave. Under the Amendment Law, it initially introduced 3 days of paternity leave and it was subsequently increased to 7 days after a few rounds of discussions by the MPs. While this is a celebrated move, the MPs also put forward a few suggestions which can be incorporated to enhance the paternity protection: (i) Introduce an Australian concept of Flexible Parental Leave Pay (90 days leave with 30 days working from home leave); (ii) to make the 7 days paid leaves non-consecutively (because not everyone needs to take one whole week off); (iii) introduce longer paternity leave such as 14 days leave practiced by Norway and Sweden; 5 days leave by Myanmar; 10 days leave by South Korea, etc. (iv) introduce a shareable parental leave of up to 30 days. (i.e. mother and father can share and swap depending on their needs and availability). (b) “Cuti Iddah” One MP proposed to include “Cuti Iddah” as a compulsory leave in the Amendment Law. He suggested to provide 30 days of “Cuti Iddah” to female employees who unfortunately lost their husbands. This leave will enable them to better cope with sadness and to manage their emotions due to the passing of their loved ones. If this is the case, female employees will be entitled to two benefits which are maternity leave and “Cuti Iddah”. Some companies in Malaysia do provide in their employment contract at least 3 days bereavement leave in the event an employee’s spouse or other family members pass away, so that the employee can take some time off to settle and manage the funeral process. However, bereavement leave is not offered by all companies because it is not a compulsory leave mandated by law yet. That said, we also take the view that while such leave is good to have, to offer 30 days leave might seem a little unduly long. Workplace Discrimination (a) The definition of “discrimination” Although Section 69F in the Amendment Law empowers the Director General of Labour to investigate disputes regarding discrimination in the workplace, the word “discrimination” itself is not defined at all in the Amendment Law. A clear definition would prevent any form of arbitrary interpretation and give more certainty to implementation and enforcement. The Deputy Minister of Human Resources subsequently indicated that his Ministry is preparing a specific guideline on the definition and elements of discrimination in workplace, which is a laudable approach in our view. Having said that, we also take the view that any important definition should have been properly dealt with in the Amendment Law itself, rather than leaving it to another piece of guidelines or orders, especially we note that a definition of “Discrimination” was actually included in the draft Amendment Law proposed back in 2018. (b) Discrimination on job seekers The protection against discrimination is only relevant for discrimination at work, available for employees who fall under the employment law. Papar MP Haji Ahmad bin Hassan suggested that the discrimination provision should also extend to job seekers as well, since many job seekers encountered certain forms of unfair discrimination by potential employers, such as discriminatory remarks in the form of gender, religion, disability, marital status, pregnancy and language. In fact, this suggestion is in line with the draft amendment that was proposed back in 2018. Since our employment law only governs employment relationship, it covers only employment discrimination and it may be difficult for it to also extend to job seekers as there is no existing employment relationship in the first place. Nevertheless, the Deputy Minister of Human Resources suggested that job seekers who experienced any form of unfair discrimination can choose to lodge a complaint via an app called “Woking for Workers” developed by the Ministry of Human Resources. (c) Wearing Tudung to Work Pasir Mas MP, Ahmad Fadhli bin Shaari suggested that the right of Muslim female employees wearing tudung to work should be protected and if any employer prevents any Muslim female employee from wearing tudung to work, that should constitute an offence under the employment law. This suggestion would not only protect the right of Muslim female employees in honouring their religious practice, but it would also echo the spirit of preventing discrimination at work. However, Sepang MP Mohamed Hanipa bin Maidin said that this right need not be specifically stated in the employment law as the newly inserted provision relating to employment discrimination would cover this issue. (d) The Enforcement Authority The enforcement authority on the issue of discrimination in the workplace is the Director General of Labour. This raises the question of whether the Director General is the most suitable person to deal with this issue. For instance, in the United States, the Equality Employment Opportunity Commission is tasked to handle any issue of workplace discrimination against job seekers and employees in the workplace. In Hong Kong, the Equal Opportunities Commission was established to implement and enforce the anti-discrimination laws. It is interesting to note that back in 2018, the Department of Labour from the Peninsular Malaysia had conducted a comprehensive study on the implementation of Equal Employment Opportunities (EEO) in Malaysia where the said study referred to the practices in several countries such as the United States, the United Kingdom and Singapore. However, we have yet to see any development on this front yet and it is hoped that the Government would implement an EEO to

The employment law of Malaysia (i.e., the Employment Act 1995) has remained unchanged since 2012. It took the Parliament 10 years to eventually propose and pass amendments to the employment law through the Employment (Amendment) Act 2021 (“Amendment Law”). We discussed this long-awaited amendment in our previous article (you can find the article here). In this article, we wish to share what have been missed out during this round of amendments. The issues also refer to the debate between the Members of Parliament as documented in the Parliament’s Hansard dated 21 March 2022 and 30 March 2022. The objective of this article is to help you understand the important issues that have been missed which may impact you directly or indirectly and why they ought to have been included in this round of the employment law amendments. In this Part 1, we discuss the issues of the coverage of the employment law and the status of labour workers. The Coverage of The Employment Law   (a) Gig Workers The number of gig workers are on the rise especially during the COVID-19 period. Gig workers mean workers who work on a temporary and on-demand basis.  Some examples of gig workers include ride-hailing drivers, food delivery riders, freelancers etc. They are usually independent contractors who do not work on a fixed hours basis nor receive any employment benefits like other permanent basis employees. The increase of gig workers can be attributed to the development of new sharing economy platform model (the gig economy) popularised by the Internet era. Gig economy refers to an on-demand or platform economy consisting of companies that engage contract workers for a temporary period or on a project-basis instead of hiring them for permanent positions. According to Bukit Bendera MP, Wong Hon Wai, he remarked that statistics had shown that Malaysia currently has at least 200,000 registered Grab drivers and at least 13,000 Food Panda riders. Unfortunately, gig workers are not being expressly recognised as “employees” under the original employment law nor the Amendment Law. Without specific legislation governing the hiring of gig workers, gig workers currently are not entitled to the minimum protection under the employment law. Worst still, it may lead to unfair treatment and exploitation from employers. Few MPs have debated strongly that gig workers should also be equally protected under the employment law and treat them like employees where they should receive the same rights and benefits like other employees which include overtime payment, sick leave etc. Although there is a “presumption of employment” under the Amendment Law, it is only relevant when the provisions in the employment law have been breached and there is a need to determine the relationship between the parties. As such, it may not grant any protection to the gig workers in the usual circumstances. The reasons for excluding gig workers from the employment law is because the existing employment law only covers employees hired under a contract of service. Nonetheless, gig workers’ rights and benefits relating to work accidents and diseases are protected under the Self-Employment Social Security Act 2017. It was highlighted in the Parliament that the Ministry of Human Resources is planning to enact a specific law to further safeguard the social welfare and protection of these gig workers.   (b) Whether certain protection will apply to all employees The employment law intends to protect employees who earn below RM 2,000 per month whereas employees who earn more than RM 2,000 would be governed by the employment contracts. However, certain protection such as maternity protection and complaint against sexual harassment will apply to all employees regardless of their wages. The Amendment Law removed the general application provisions which caused much confusion as to whether employees who earn more than RM 2,000 will lose their maternity protection and sexual harassment protection. The Deputy Minister of Human Resources however has indicated that his Ministry will issue a Ministerial Order to clarify that certain existing protection under the employment law will be applicable to all employees regardless of their wages. Frankly speaking, such move leaves much to be desired. If the Parliament’s intention was to maintain the existing protection for all employees, then the general application provisions did not have to be removed. Leaving such an important issue at the hands and powers of the Minister may cause more uncertainty in the future. It also means the Minister may alter, revoke or replace such Ministerial Order at his discretion any time he likes.   (c) Breastfeeding female employees Although the Amendment Law has given women more rights by granting a longer maternity leave and removing the provisions prohibiting women from doing night shift and underground work, however, the need of breastfeeding female employees was not considered in the Amendment Law. In the absence of an express protection, Kulai MP Teo Nie Ching argued that many female employees may opt to stop breastfeeding their newborn babies. The reason being that it is difficult for them to pump or express their milk in the workplace as there is no private room or available space to store their milk. In the United States, the law has mandated employers to provide female employees with places or allocate appropriate rest time so that female employees can pump their breast milk for their children. In the Philippines, the law mandated that employers to provide 40 minutes for employees to pump their milk every day. In Malaysia, there is no such mandatory provision. The Kulai MP’s suggestion is actually aligned with the Maternity Protection Convention, 2000 (No. 183). Article 10 of the Convention states that breastfeeding mother shall be given one or more daily breaks to breastfeed their children. It is unfortunate that the Parliament did not include such protection in the Amendment Law.   (d) Matters Relating to Pre-Employment Referring to the draft amendment issued back in 2018, there was an intention to expand the coverage of the employment law to also include pre-employment matters. This would include job vacancy post, registration of job

Productive and motivated employees are often crucial in ensuring the success of your business or company. Therefore, by offering benefits to your employees on top of salaries and wages, it shows that you care and are invested in not only their work, but their health and well- being. Depending on the type of organization, the job, and the type of employees (Employment Act (EA) Employees/ Non- Employment Act (Non- EA) Employees), employee benefits may be quite different. So, how do you categorize EA and Non- EA Employees? EA Employees are employees with wages not exceeding RM2000 a month or employees with wages over RM2000 a month that are engaged in manual labour; engaged in operation or maintenance of any mechanically propelled vehicle operated; engaged in any capacity in any vessel registered in Malaysia; domestic servants; or supervise or oversee employees engaged in manual labour. EA employees are governed under the Employment Act 1955 and are entitled to all benefits under the Act. On the other hand, Non- EA employees will be governed by the employment contract terms, where employers are mostly free to set their own employment benefits, as long as the employees agree to them in the employment contract. So, what are the employment benefits in Malaysia? Here’s all you need to know. Compulsory employment benefits Annual leave As for EA employees, their number of annual leave depend on the length of service in the company. They are allowed 8 days of annual leave if they have been in the company for a year or more but less than 2 years. For employees who served 2 years or more but less than 5 years, they are allowed 12 days of annual leave, and for 5 years or more, they will be given 16 days of annual leave. However, for Non- EA employees, they will be entitled to the number of leaves stated in the employment contract that they have agreed to. Sick and hospitalisation leave An employee is entitled to sick leave days that are approved by a registered medical practitioner. The number of sick leave provided will also depend on the employees’ length of service in the company. For employees who serve less than 2 years, 14 days are allowed. 18 days and 22 days sick leave will be allowed respectively to those who has been in the company for 2 years or more but less than 5 years, and those who worked for 5 years or more. Where hospitalization is required, EA employees are allowed 60 days of hospitalization leave per year but shall not exceed 60 days in total. On the other hand, for Non- EA employees, they once again have to refer to the agreed employment contract. Maternity leave All female employees are entitled to 98 consecutive days of paid maternity leave according to Section 44A of the Employment Act. An employee is entitled to receive maternity allowance if she has been employed for at least 90 days in aggregate during the 9 months before her confinement AND she was employed at any time in the 4 months immediately before her confinement. A female employee cannot be terminated during maternity leave or for a period of 90 days after her maternity leave. Public holiday In Malaysia, employees should be allowed a minimum of 11 public holidays, 5 of which must include National Day, Official birthday of Yang di- Pertuan Agong, Labour Day, Official birthday of the Yang di- Pertua Negeri of the state where the employee works and Malaysia Day. Where a public holiday falls on a Sunday, the next working day shall be a holiday. If an employee is required to work on a public holiday, he should be paid not less than 3 times his daily pay rate, the same applies to work overtime on the said public holiday. Lay off benefits An EA employee is entitled to receive termination or lay-off benefits employed under a continuous contract of employment for at least 12 months before the retrenchment exercise. Employees are entitled to 10 days’ wages for each year of employment if they have been employed for less than 2 years. If the employees have been employed for 2 years or more but less than 5 years, or 5 years or more, they are allowed 15 days’ wages and 20 days’ wages respectively for each year of employment. On the other hand, for Non- EA employees, they will once again have to rely on their signed employment contract. Optional employment benefits Insurance and medical coverage Many employers in Malaysia offer medical and insurance coverage as benefits. For example, medical insurance for outpatient and inpatient, vision or optical coverage, dental coverage, personal accident insurance coverage etc. Bonuses The way this is expressed varies from company to company. For example, a percentage of annual salary, a number of months of monthly salary etc. Bonuses are normally paid approximately twice to once a year to increase incentives amongst employees and encourage them to achieve their targets. Allowances In some cases, employers provide allowances to employees on top of their regular salary. These allowances can include parking allowance, travel allowance etc. Remote working Recently, providing flexibility to work remotely or from home has been increasingly popular as employers now trust employees to be able to work outside the office, as long as they get their work done efficiently in the specific given time. Professional training and certification Some companies offer professional training or certification for its employees. The professional training or certification mainly focuses on strengthening the employee’s skills so they can be more productive. In conclusion, other than the compulsory benefits set out in the Employment Act 1955, employers are free to provide any additional benefits that they think are most suitable in increasing employee productivity. Employers should always consider providing additional benefits to retain good employees and to attract new employees in joining the company. ***** About the author: This article was written by Edwin Lee Yong Cieh, Partner and Lee Jing, Intern –

*Note: Barring any further amendments to the law, this article should be read in the context of the Bill being passed in the current form as at 21 March 2022.  The Employment (Amendment) Bill 2021 (“Bill”) was tabled before the Malaysian Parliament (House of Representatives) on 25 October 2021 and approved by the House of Representatives on 21 March 2022. The Bill will now proceed to be tabled before the Senate and thereafter, it will be presented for Royal Assent by His Majesty The Yang di-Pertuan Agong. Therefore, it will still take a while before the Bill will legally come into force. That being said, as the Bill will bring significant impacts on the employment scene in Malaysia, employers are urged to pay serious attention to the new changes put forward by the Bill. The Bill seeks to amend the Employment Act 1995 (“EA”) that has been in force since 1 June 1957. It is one of the oldest legislation passed prior to our Independence Day and has remained as the main legislation governing the employment practices in Malaysia. Throughout the years, the EA has been amended several times to take into account changes in modern employment practices as well as to ensure our country’s labour law meets the international labour standards outlined by the International Labor Organisation (“ILO”) and other international conventions and practices. This article aims to share with you the main amendments in the Bill. To get a better understanding and overview of the amendments, this article also makes reference to the Parliament’s Hansard dated 21 March 2022 (“Hansard”). According to the Hansard, the Deputy Minister of Human Resources, Datuk Haji Awang bin Hashim mentioned that the main objectives of the EA is to provide protection and welfare to workers through the setting of minimum terms and conditions of employment whereas the main objective of the Bill is to increase and improve the protection and welfare of the working class in the country by way of strengthening the labour market, employees’ welfare and prohibiting discriminatory practices by employers. In other words, this Bill aims to empower workers’ and employees’ rights and protection in Malaysia. 1. Workplace (a) Flexible working arrangement The Bill allows a flexible working arrangement to be entered into between employees and employers such that they can vary the hours of work, the days of work or the place of work. This arrangement has to be initiated by a written application by the employee, in the manner and form as determined by the Director General of Labour (“DG”). Once the employer receives the application, he must decide whether to accept or reject the application within 60 days from the date of application. The final decision will be made by the employer but if he rejects such application, he must provide the reason in writing. This flexible working arrangement is to incorporate the hybrid work culture that has been put in place at many workplaces since the outbreak of the COVID-19 pandemic and therefore, the Government believes that this should not come as a surprise to many employers. Nevertheless, the arrangement is still subject to other provisions of the EA and any agreed arrangement should not contravene the existing provisions such as the number of working hours, adequate rest time etc. (b) Reduction of work hours The maximum working hours per week for EA employees has been reduced from 48 hours to 45 hours in the Bill. If the employee is required to work beyond 45 hours per week, the employer may be required to give overtime payment to the employee as overtime payment is one of the mandatory benefits under the EA. This amendment is in line with the two main ILO conventions regarding working hours and the Bill also allows the Minister of Human Resources to make regulations relating to night work and shift allowances. (c) No forced labours The Bill prohibits any form of forced labour. Force labour is defined in the Bill as (i) threatening, deceiving, or forcing employees to do any activity, service or work and (ii) preventing the employees from leaving before the activity, service or work is done. Employer who contravenes this section may face a monetary fine up to RM100,000 or imprisonment up to two years or both. (d) Increase awareness of sexual harassment The Bill introduces a new requirement for the employer to display a notice that raises employees’ awareness towards sexual harassment. This notice shall be placed at a conspicuous place in the workplace. The Bill however deleted section 81G in the EA which allow sexual harassment complaints to be made by any employees irrespective of their wages, including employees that falls outside the realm of the EA (i.e., non-EA employees whose monthly salary is more than RM 2000). However, the sexual harassment provisions in the EA are still there and EA employees can still lodge a sexual harassment complaint to their employers. As for non-EA employee, they can still lodge a sexual harassment complaint to the Industrial Court or to institute a tort claim against the harasser if such event arises. Do take note that the Government through the Ministry of Women, Family and Community Development, has also tabled a stand-alone Anti-Sexual Harassment Bill 2021 on 15 December 2021 and it is expected to be debated and hopefully passed by the Parliament later this year. 2. Maternity, paternity leave and pregnant employee’s protection (a) Maternity and paternity leave Under the EA, a female employee is entitled to 60 days of maternity leave while a male employee is not entitled to any paternity leave. The Bill raises the 60 days maternity leave to 98 days to follow the Maternity Protection Convention. However, the Bill removed section 44A of the EA which allow non-EA employees to be entitled to the same benefits. On a plain reading, it might seem that the Government has taken away such maternity benefits from non-EA employees and that any maternity benefits will be left entirely in the employment contract between the