A Comprehensive Guide to Malaysia’s Employment Act

Understanding the Modern Workplace

Frequently Asked Questions

Most frequent questions and answers

What is the current scope of the Employment law in Malaysia Act 1955?

Following the 2022 amendments, the Act extends to all employees under a contract of service regardless of monthly wages. Certain provisions — including overtime pay and termination benefits — remain applicable only to employees earning RM4,000 or below per month, or those engaged in specified categories of manual labour.

Are male employees entitled to statutory paternity leave?

Yes. Section 60FA provides that married male employees are entitled to 7 consecutive days of paid paternity leave. To claim this, you must have been with the same employer for at least 12 months and notify the employer 30 days before the expected birth.

What are the statutory limits on working hours?

The maximum permissible working hours have been reduced to 45 hours per week. No employee shall be required to work more than 8 hours per day or 45 hours per week, exclusive of meal intervals.

Can a pregnant employee be dismissed?

Section 41A strictly prohibits the termination of a female employee who is pregnant or suffering from a pregnancy-related illness, except in cases of wilful breach of contract, misconduct or the closure of the employer’s business. The burden lies upon the employer to establish that the dismissal was not occasioned by the employee’s pregnancy.

What is the employee maternity leave entitlement?

Female employees are entitled to 98 consecutive days of paid maternity leave, subject to having served the same employer for a minimum of 90 days within the 9 months immediately preceding confinement.

What are the statutory minimum notice periods for termination?

Where a contract of service does not specify a notice period, Section 12 stipulates the following minimums: –

4 weeks for service under 2 years;
6 weeks for service between 2 and 5 years; and
8 weeks for service of 5 years or more.

How is annual leave entitlement calculated?

Statutory annual leave is graded based on years of service: –

8 days for service under 2 years;
12 days for service between 2 and 5 years; and
16 days for service exceeding 5 years

What if notice is not given upon termination?

Either party may terminate without notice upon payment of an indemnity equivalent to the wages that would have been earned during the applicable notice period or the unexpired portion thereof.

What constitutes “Constructive Dismissal”?

Constructive dismissal arises where an employee is compelled to resign by reason of the employer’s repudiatory breach of the contract of service — such as an unlawful reduction in remuneration, an unjustified demotion or a persistent failure to maintain a safe working environment — rendering continued employment untenable.

What constitutes Unfair Dismissal?

A dismissal is generally regarded as unfair if effected without just cause or excuse, including failure to conduct a proper domestic inquiry for alleged misconduct or non-compliance with statutory or contractual notice requirements. The Industrial Relations Act 1967 governs the formal mechanism for such claims.

Can an employee be terminated for filing a complaint?

No. The Act protects employees’ right to appear before the Director General for inquiries. Furthermore, Section 69F empowers the Director General to inquire into and make orders regarding disputes relating to discrimination in employment.

Can an employee contract out of statutory rights?

No. Section 7 renders void any contractual term that is less favourable to the employee than the Act’s provisions. Statutory rights pertaining to fair treatment and due process upon termination are non-derogable.

What is the statutory retirement age in Malaysia?

The Employment Act itself does not set a retirement age, but refers to the Minimum Retirement Age Act 2012, which mandates that the minimum retirement age for private-sector employees is 60 years. Compulsory retirement prior to that age is prohibited.

Must a contract of service be in writing?

Yes, where the duration exceeds one month. Such a contract must contain a termination clause. In the absence of a written contract for shorter engagements, the law presumes the existence of a contract of service where an employer-employee relationship is established.

When must wages be paid?

Wages must be paid no later than the 7th day following the last day of the wage period. Non-compliance constitutes a criminal offence under the Act.