9 Aug 2022

The Malaysian Employment Act 1955 will undergo major changes: introducing longer maternity and paternity leave, enhanced protection from discrimination, a statutory right for employees to request a flexible working arrangement and much more. With the implementation of these (many) changes just around the corner, employers need to get up to speed quickly and begin revising policies and processes to ensure compliance.  

What’s new?

  • Amendments to the Malaysian Employment Act 1955 (“EA 1955“) will provide further protection and benefits to employees.
  • Currently, the EA 1955 only applies to employees who: (a) earn less than RM2000 (approx. USD500) per month; or (b) regardless of income, are employed as manual labourers or supervisors of manual labourers; or (c) fall within certain categories such as those working on sea vessels, domestic servants etc.
  • However, the Human Resources Ministry has announced that the application of the amendments is likely to extend beyond criteria (a), (b) and (c) to cover more, if not all, employees.
  • A Minister’s Order is expected to be issued to clarify the scope of employees covered and clear up any confusion. The expected date of publication of this Order is still unknown.

 
When will the changes come into effect?

  • 1 September 2022.

What are the key amendments to the EA 1955?

  1. Paid maternity leave: increased from 60 to 98 days;
  2. Introduction of paternity leave: 7 consecutive days for married male employees, subject to other conditions being met;
  3. Restriction on termination of pregnant employees: pregnant employees and those suffering from a pregnancy-related illness cannot be terminated unless other grounds for dismissal exist such as misconduct or redundancy;
  4. Working hours: maximum weekly working hours reduced from 48 to 45 hours;
  5. Foreign workers: employers must obtain prior approval from the Director General of Labour before hiring a foreign employee. Failure to do so could result in fines and/or imprisonment;
  6. Flexible working: employees may submit a written application to their employer for a flexible working arrangement to vary the hours, days or place of work. Employers must revert with their approval or rejection within 60 days from receipt of the request;
  7. Notice on sexual harassment: employers must display a notice in the workplace raising awareness on sexual harassment;
  8. Discrimination protection: the Director General of Labour is empowered to inquire and make orders on discrimination disputes between employers and employees. Employers that fail to comply with any such orders could be subject to fines; and
  9. Gig workers: presumption of employment in the absence of a written contract of service, unless proven otherwise.

So, what should employers do now?

  • Although the exact scope of employees who will benefit from the amendments is still to be confirmed, the coverage is expected to apply to a greater number of employees following the anticipated publication of a Minister’s Order.
  • At the very least, for employees who already fall within scope of the EA 1955 (meeting criteria (a), (b) or (c) above), employers should begin reviewing the relevant contracts, policies and processes now to prepare for and ensure compliance once the changes come into effect. For all other employees, employers should get ready to carry out a similar exercise.

ONE is here to keep you up to date on developments and support you, including reviewing your employee handbooks, policies and HR processes. Please get in touch and we would be happy to assist.