A. Brief Introduction of Labour Laws and Regulations
The main legislation governing labour matters in West Malaysia and the Federal Territories is the Employment ct 1955(Employment Act), which protects employees who fall within the categories defined under the FirstSchedule of the Employment Act (EA Employees
The Employment Act provides the minimum terms and conditions of employment in respect of EA Employees As for non-EA Employees, it is advisable, but not mandatory for employers to accord the minimum benefits asprovided for under the Employment Act. Apart from the Employment Act, the following are a number of non-exhaustive employment related legislation
nent to most employment scenarios
Children and Young (Employment)Act (only applies to the States of Peninsular Malaysia) 's Pn Factories and Machinery Act 1967 Employee's Social Security Act 1969(SOCso)Industrial Relations Act 1967 Income Tax Act 1967
Minimum Retirement Age Act 2012
Occupational Safety and Health Act 1994 National Wages Consultative Council Act 2001
Private Employment Agencies Act 1981Workmen Compensation Act 1952 Weekly Holidays Ad 1970
B Requirements of Employing Foreign Employees
a Work Permit
a) Foreign Employees
The following are general requirements for a permit to be issued to foreign workers: () Foreign workers are only permitted to work in certain sectors, such as manufacturing, construction, plantation, agriculture and services
() Quota of foreign workers must be obtained by employers/companies from the Ministry of Home Affairs One Stop Centre (OSC)
(iv)Certified PASS for Immigration Security Clearance(ISC)at the source countr
() Certified as fit and healthy by the approved medical centre in the source countries
(vi)Foreign workers must come from approved source countries
b) Expatriates
The requirements in paragraphs(u)to (vi) above are appicable for a permit to be issued to an expatriateb Application Procedure
a)Application for Foreign Workers
The process differs between the Peninsular and East Malaysia where each State is governed by its ownrespective state legislature/procedures The process in Peninsular Malaysia is divided into two phases, being firstly the pre-arrival stage where the prospective employer need get hold of the PASS Immigration Security Clearance(IsC) at the ISC centre in the nust also apply to the Immigration Department for a Visa
R) approval before employing foreign workers. Foreign workers must remain in their respective countries while pending VDR approval from the Immigration Department. The second or post-arrival phase is when the for workers are permitted entry at authorised entry pointsusing the VDR issued by the Immigration Department and entry visa issued by the Malaysian Attaches Office in ountry of origin. A medical examination by the Foreign Workers Med FOMEMA) will have to be taken before the worker can be issued a visit Pass (Temporary Employment)
b)Application for Expatriates
To obtain an employment pass it entails a process for the issuanc relevant documents to expatriates who have been approved by the Expatriate Committee or the relevantAn expatriate must submit a completed application form(DP10)attached to the original employment contract which must be stamped with a revenue stamp. The sponsoring company must submit an undertaking letter which that the company will pay salaries and tax revenues based on the expatriate employment contract. The
would also conditions set by the regulatory For follow-up
r is required to submit the application form(DP10), together wit
expatriate,s income tax receipts.
c Social Insurance
Social insurance (locally terms as "sOCso") is covered by the Employment Injury Insurance So the Invalidity Insurance Scheme which covers industrial accidents, occupational diseases, accidents, death. The body i
Matayirangn workers aro provided protecton under the workers compensaton Act 195-2 while socso cserThe Employees Provident Fund Act 1991 establishes the Employment Provident Fund CEPF) that provides a system for pension funds and financial security of the elderly. EPF savings involves mandatory contribution fromto retirement is stll permitted under certain circumstances and subject to conditions set by the EPF For a foreign worker employed and staying in Malaysia, a notice of election can be submitted to the EPF(and copied to the employer) for the said worker to contribute to and benefit from the EPF.
C. Exit and Entry
a Visa Types
The Malaysian Govemment issues(subject to the fulfilment of conditions) three types of visas to foreign nationals: ()the Single Entry Visa. valid for a period of 3 months from the date of issue: (n) the Multiple Entry Visa. valid for a perod within 3 months to 12 months from the date of issue; and (il)the Transit Visa(not applicable to or required by foreign nationals on transit who do not leave the airport premises and are on a continuous journey to the next destination with the same flight)
b. Restriction on Entry and Exit
c Chargeability of Income Tax for Foreigners
ysia must give notice of tax chargeability to the Non- Resident Branch or the nearest tax office within 2 months of his/her arrival in Malaysia Income tax is imposed at progressive rates of up to 28% for resident individuals. Non-resident individuals are taxed at a flat rate of 28%
D. Trade Union and Labour Organisations
There are two statutes that govem the conduct and affairs of trade unions, namely the Industrial Relations Act 1967 and the Trade Unions Act 1959. These statutes and its related regulations contain the mechanism to regulate the conduct and affairs of trade unions. its members, officers and affiliates, and include provisions dealing with strikes, picketing and lockouts
are generally two different types of unions recognised in Malaysia In-house unions that represent employees in a particular company and national unions which comprise of workmen from many companies wi share the common trade, industry or profession that the national union is competent to represent No one workman may become a member of two trade unions. A workman can only have membership in one trade union which he is qualified to join.
E Labour Disputes
A contract of employment can come to an end under a myriad of circumstances including but not limited to resignation, retirement, breach by employer, breach by employee, dismissal by employer; redundancy. retrenchment and change of ownership of business
conducting a domestic inquiry in instances of misconduct or following the Code of Conduct for Industrial harmony. Last In First Out principle where a retrenchment exercise is undertaken Complaints for wrongful dismissal are to be made in writing to the Director General of Industrial Relations (,)within 60 days of dismissal. Reconciliation meetings can be called by the DGIR for the employer and employee to attempt settlement, but where that fails, the complaint is then referred to the Industrial Court for hearing of the claim for unfair dismissal, and the Court can order reinstatement of the employee, or where that is