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 seekers, organising job fair or carnival and pre-employment discrimination. However, this suggestion was removed from the Amendment Law and as such, matters relating to pre-employment remains unregulated at the time of writing.
The Status of Labour Workers
(a) Exploitation of Labour Workers Supplied by Contractors
This issue concerns labour workers who are being supplied by contractors to other employers. When such labour workers are being supplied by contractors, they are usually considered as the contractors’ employees. However, they do not perform labour work for the contractors but for other employers. As such, Sungai Buloh MP Sivarasa Rasiah suggested that labour workers who are supplied to the employers should be made the employees of the principal employer and not remain as the contractors’ workers. This could prevent exploitation of workers as there had been cases where some principal employers exploited such labour workers by not paying them wages on the mere ground that they were not their employees.
(b) Issue of Forced Labour
The definition of forced labour is narrowly defined in the Amendment Law. It comprises only two features out of the eleven internationally recognised features by the International Labour Organisation. Since the inclusion of the provision of “forced labour” is to adhere to international standards, we wonder why all eleven internationally recognised features such as withholding passports and wages are not being included in the definition.
In Part 1 of this article, we summarised two main key points that have been missed out in the Amendment Law. In Part 2 of this article, we will discuss two other important issues relating to discrimination and leaves.
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About the author:
This article was written by Edwin Lee Yong Cieh, Partner and Wong Shen Ming, Trainee Lawyer – law firm in Kuala Lumpur, Malaysia.
The view expressed in this article is intended to provide a general guide to the subject matter and does not constitute professional legal advice. You are advised to seek proper legal advice for your specific situation.
Edwin is a corporate and technology lawyer. He is also the founder and deputy managing partner of Lee & Poh Partnership (LPP Law). Edwin has advised a range of companies from technology startups to multinational corporations on a range of matters. In 2020, Edwin was named as a Malaysian Rising Star by Asian Legal Business, a finalist for the Young Lawyer of the Year at the ALB Malaysia Law Awards as well as a lawyer in the annual ALB publication of Asia 40 under 40.
View his full profile here.
