We are experts in Employment Law and we provide legal services for employees as well as employers. We pride ourselves on our ability to simplify the law and provide focused and strategic guidance. We act in all types of employee matters, from minimum wage dispute through to senior executives terminations with surrounding share and benefit implication.
Employment issues are governed primarily by statute and contract. In respect of companies with large scale workforces, collective agreements between employers and registered trade unions are important in regulating the employment relationship between the parties.
The main statute which provides for minimum terms and conditions of employment for individual employees is the Employment Act 1955 (EA 1955)(revised 2012). This Act is applicable to employees who come within the scope of the Act, employees who earn a minimum wage amount of RM2,000 or below. These minimum terms and conditions of employment include:
- Wages and rate of wages,
- Permissible deduction,
- Maximum hours of work and provide for all forms of leave that maybe taken by such employee including,
- Annual leave,
- Maternity leave.
On the other hand, the most common form by which terms and conditions of employment are governed is the contract between the relevant parties. In practice, such terms and conditions of employment are usually preset by the employer when making the offer of employment.
Beside from the EA 1955, the Industrial Relation Act 1967 (IRA 1967) governs the employment disputes between employer and either trade unions or individual employees. The Industrial Court is the adjudicatory body empowered under IRA 1967 to deal with all disputes regarding to employment disputes. The industrial court also deals with all disputes arising under the Act including:
- Settlement of terms and conditions of a collective agreement where parties are in dispute over such terms,
- Whether a dismissal of an employee is without ‘just cause or valid reason’.
It is important to note that there had been changes to the IRA 1967 as it was amended in January 2021 with the aim of streamlining and expediting the resolution of disputes which arise under the Act.The general principle which guides the Industrial Court in such disputes is that the employer has the burden of proof to show that it had acted ‘fairly and reasonably’, when exercising management prerogatives and invoking contractual terms.
Asides from that, the main amendment to the IRA 1967 would include the following:
- Compulsory early resolution through conciliation within specified time frame. If no settlement can be achieve between both parties to the dispute, only then a referral to Industrial court for adjudication would be granted.
- The Industrial Court has the power to allow the provision of full and adequate compensation where appropriate, and for determination of issues relating to such compensation.
- Provision for a special appeal process to challenge an award of Industrial Court by way of direct appeal to the High Court. Previously, a party can only apply for judicial review in the High Court to quash the award sought to be challenged.
Given the fast- evolving landscape arising from these recent developments, it is anticipated that new measures and possibly further amendments to relevant employment statutes would be enacted to meet what has, effectively, been an unprecedented challenge to all parties in the employment sector.