Employment Act (EA)

Definition of EA for “Employee”:

  1. Any person irrespective of his occupation who has entered into a contract of service with an employer under which the person’s wages does not exceed RM 1500 per month
  2. If wages exceed RM 1500 he is engaged in manual labour
  3. Person engaged in operation or maintenance of mechanically propelled vehicle
  4. Supervises or oversees other employees engaged in manual labour employed by the same employer
  5. any person who is engaged as a domestic servant

The word “wages” excludes commission, subsistence, allowance and overtime payment

Terms frequently used

  1. Employer
  2. Foreign Employee
  3. Medical Officer
  4. Part time employee
  5. Permanent resident
  6. Shift Work
  7. Spread of period of ten hours
  8. Wages
  9. Casual Worker
  10. Temporary Employees

Contract of Employment

A contract of service for a specified period of time exceeding one month or the performance of a specified piece of work, where the time reasonably required for the completion of the work exceeds or may exceed one month shall be in writing

Note: A contract of service cannot restrict the rights of employees to join, participate in or organize trade unions

Collective Agreement (CA)

Certain categories of employees are covered by a valid Collective Agreement (CA) signed between the company and its union, the employer and such employees (who are covered within the CA) cannot agree on terms and conditions which differ from the CA. In such case, the terms and conditions as set out in the CA will apply.

Employees who are not within the scope of EA are mainly management personnel. The terms and conditions of their employment are normally set out in a contract of employment. Should a dispute arise relating to the terms and conditions of their employment the agreed terms in the contract of employment would have an important impact on the resolution of the dispute.