There are a number of labor laws in Malaysia. This module pays particular attention to major ones like the Employment Act 1955, Industrial Relations Act 1967 and Trade Unions Act 1959. The Employment Act provides minimum terms and conditions (mostly of monetary value) to certain category of workers.
The Industrial Relations Act provides ways for settlement of trade disputes between employers and employees, whereas The Trade Unions Act regulates trade union registration and the uses of trade union funds. As these Acts are quite complex, and managers and executives should take the time to go through them - they can be interesting, if you are interested.
This module has been put together to expose the participants to the essentials of the Employment Act 1955 and the Industrial Relations Act 1967 and how the understanding of the contents of these two Acts can help them become more effective in their relationship with the employees.
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Case Study 1: Employer-Employee Contract Is Crucial
Azman is a small grocery shop owner. His cashier is suddenly sick and need to be hospitalized for a few month and he had to find a temporary replacement. Thus, he hired Abu, a fresh graduate who waiting for a job. Seeing this as a chance to gain job experience, Abu is interested. Azman thought that because Abu is a temporary, he did not create a employment contract.
This is because Azman did not know exactly how much long the cashier needs to be hospitalized and he did not want to create new contract every month. Abu knows this is against the law, however, under the impression that he will be at least working for 6 month. Abu keep his mouth shut and accept it.
After 2 month, the cashier is healthy to work. Without a warning, Azman fired Abu straight away. Abu was shocked and told Azman that he will bring this matter to Labour office if he did not reassign him for at least 4 month, in which Azman laugh it as he thought Abu could not do much and Labour will not accept report from a kid.
Azman was wrong. After few month, Azman was called to Labour office to show reason why there no contract written and why Abu was fired after two month while Azman promised he will need Abu to work at least 6 month. Azman was shocked. As Azman did not wanted to escalate this further, he asked Abu to settle it outside court.
Abu has asked that he be paid the remaining 4 month of his salary. He also asked 2000 ringgit as a consolation to damage that Azman has caused. Azman agreed. Abu salary per month is 1500. In total, Azman has to pay Abu 8000 ringgit just to stay out of court in which he predicted, the loss would be much greater.
Case Study 2: Discounted Maternity Leave Is A No-No
Bibi is a small boutique owner. Her story in opening the boutique is legendary. Her husband divorced her when she is pregnant with their only child. She collected all her capital and successfully opened up a boutique when she is 7 month pregnant. She did not take a leave at all when the baby is near due and she actually give birth at the boutique, assisted by her worker.
After a few days in the hospital, she refused to take a leave and continue with business as usual. Now, although still relatively small, she considered her business to be successful, enjoying a steady profit. She always aspire her workers to be like her, especially to Ana, her worker who had been divorced by her husband and currently pregnant, just like she did in the past.
Ana, on the other hand, is not strong will as her boss Bibi. After giving birth, she planned to use her 60 days maternity leave to get a good rest and to calm her feelings. When her due date is near, she tell Bibi that she will be using her maternity leave to the fullest. Bibi disagree. Bibi is willing to only give 30 days maternity leave and she has to be back to work after 30 days is over.
Ana, enraged but try to be calm, tell Bibi that 60 days maternity leave is her right as employee. Hearing this, Bibi felt threatened and give Ana an untimatum, take the 30 days leave or quit. Ana choose to quit, however she did not go down quitely. She reported this matter to the labour office before giving birth.
After a few month, Bibi is called to labour office to show cause. Bibi still took a stand for her actions even though she knew that 60 days maternity leave is Ana's right in Employment Act. For her stubbornness, she was ordered by court to pay Ana double of her salary. She also have to pay fine to the court for her negligence in exercising employees right as stipulated in Employment Act.
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Case Study 3: Benefits Of Literate In Employment Act
Amat is a HR Exec at a small construction site. One day, one of his worker asked if he could took 2 weeks holiday. In previous management, workers can apply for paid leave as long as he/she wanted, so long it is approved by human resource. Of course, this practice led to increase organization expenses, reduce productivity and motivation. Hence,this is why the previous HR Exec is replaced.
As a new HR Exec, Amat knows this practice had to stop. However, he did not wanted to act rashly. He check for the employees record and he noticed that this worker had only been working for 3 month. Thus, in accordance to Employment Act, the worker did not entitled to 14 days paid leave. He only entitled for 8 days paid leave.
When Amat told this to the worker, he is furious. He said that Amat denied him of his rights. In addition, he also said that this practice is unlike the previous HR practice where they can took paid leave as many days as they wanted. The worker threaten to go to labour, in which Amat agreed because Amat knows his actions is justified.
In the end. the labour office decided that Amat actions was right. Amat actions was in accordance with Employment Act, which stipulated paid annual leave for employees who has less than two years of service is only 8 days. Upon hearing this, the worker apologize and took 8 days paid leave and the rest without being paid.
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