Malaysia Labour Law United Kingdom Labour Law Law Employment Essay

Published Date: 02 Nov 2017

Basically in the United Kingdom their labour law is governing by three main sources such as the Common Law, Statute and European Law.

Under Common Law, since all employees in the UK works under a contract of employment with their employer, the common law (particularly the law of contract) forms the legal basis of the employer/employee relationship. A contract of employment need not be but is usually recorded in writing. The parties are free to stipulate which law will be the governing law of the contract. However, certain mandatory statutory employment protection rights will apply regardless of the law of the contract, provided that the employee is UK-based. In addition, the law of tort will govern matters such as an employer’s liability for the acts of its employees and liability for workplace accidents [1] .

As for the positions under Statute, since the early 1970s, there has been a dramatic growth in the amount of Employment protection legislation in the UK which has significantly supplemented the common law rules. Some of the main employment law statutes are: Health & Safety at Work etc Act 1974, Trade Union and Labour Relations (Consolidation) Act 1992, Employment Tribunals Act 1996, Employment Rights Act 1996, Public Interest Disclosure Act 1998, Data Protection Act 1998, National Minimum Wage Act 1998, Human Rights Act 1998, Employment Relations Act 1999, Employment Act 2002, Employment Relations Act 2004 and Equality Act 2010.

Whereas under European Law, If UK domestic law has failed to implement EC Treaty obligations properly, individuals may rely directly on the EC Treaty in the UK courts. EC legislation has been particularly important in the areas of equal pay, discrimination and employees’ rights on business transfers. In addition, since the European Court of Justice is the final arbiter in matters of interpretation of European legislation, its judgments are important when it comes to questions relating to the interpretation of obligations derived from European Directives [2] .

Generally in UK there are traditionally three main categories of worker, namely the self-employed or independent contractors, agency workers or temps and the employees. In recent years a fourth category, called ‘workers’ has also become established, primarily from European law developments. However, confusingly, this fourth category overlaps with the others [3] .

The Self-employed or independent contractor means, someone who is self-employed or an independent contractor is someone who is in business on their own account and who is responsible for making their own decisions as to how the job is performed. There are advantages for both the employer and the individual in having a relationship of this nature such as the employer is freed from most statutory employment protection legislation, and the individual enjoys a favorable tax position. For agency workers or temps some workers are employed or engaged by an employment agency which then supplies their services to the hirer. Although the hirer will owe certain statutory duties (e.g. duties under discrimination and health and safety legislation) it will not owe the agency worker many of the employment protection rights enjoyed by employees Agency workers are generally used for temporary engagements although it is not uncommon for engagements to last for several months or even years [4] .

While it is possible that an agency worker may not be an employee of either the employment business or the hirer, case law has established that in some circumstances, an employment relationship could be found to exist between an agency worker and the hirer where it is necessary to give effect to the reality of the relationship (i.e. if the way the contract is performed is not consistent with agency arrangements).

Lastly is the new category worker, in which the idea of a separate legal category of ‘workers’ is a relatively new one in UK law. The concept derives from European law. In broad terms, a worker is someone who works under an employment contract, or some other contract under which they agree to provide services personally. In addition, to qualify as a worker, the organisation to which the individual is providing their services must not be a client/customer of their profession or business. So, for example, some independent contractors may qualify as workers. Workers enjoy fewer rights than employees, but still benefit from, for example, rights relating to the number of hours they work, the amount of annual leave they can take, and the amount they are paid [5] .

Now we shall examine some basic info for any assignees that are going to be working in the UK, as we know the labor law in United Kingdom is very flexible there is small limitation by

the law for employers. As we know there must be Contract of work all and employees are entitled to a contract of employment that forms the basis of the employment relationship [6] .

The following details must be included in the written statement: employer’s and employee’s name, job title or job description, date the employment began, address of employer, amount of pay and interval between payments , hours of work, holiday pay and sick pay entitlements, pension arrangements, notice period, grievance and appeal arrangements, disciplinary rules or dismissal procedures [7] .

Over the years, employees have become entitled to a wide range of statutory rights, derived from parliamentary acts and regulations that affect the employment relationship. In general they cannot be waived and include the right: Working hours, the employer contract will state the number of hours he is expected to work and how much holiday he is entitled to. There are regulations that set out the maximum number of hours a person should work each week. In general young people between school leaving age, and 18 years old should work a maximum of 40 hours a week, or 8 hours a day. For workers of 18 or over the figure is 48 hours a week. Minimum wages, the minimum wages in the United Kingdom is since 1. 10. 2008 the amount 993.20 pounds sterling (1 186 EUR) per month. Ending employment, the contract can be terminated in various ways: by expiry of the agreed term (temporary contract), notice (dismissal) by employer or employee, termination by mutual agreement, setting aside of the contract by the cantonal court, death of the employee. Lastly is Holiday, all workers have a statutory right to at least four weeks paid annual leave (20 days paid holiday if his work five days a week) [8] .

In Malaysia, there are a number of labour laws to govern the employment relationship. The three major ones such as the Employment Act 1955, (EA 1955) Industrial Relations Act 1967 and Trade Unions Act 1959. The EA 1955 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.

Under the Employment Act 1955 it only applies to the Peninsular of Malaysia, whereas the Labour Ordinance Sabah and the Labour Ordinance Sarawak in which these Labour Ordinance (Sabah Cap. 67) and the Labour Ordinance (Sarawak Cap. 76) regulate the administration of Labour Laws in their respective states. There are two types of employees covered by Employment Act 1955 with salary below RM2000: manual and non-manual. For manual workers such as laborers, machine operators and all those doing manual work, they are covered under this act. For those non-manual employees like executives, clerks and so on, their terms and conditions are usually stated in their employment contract. If the employer fails to fulfill the contract, the employee can still complain to the Labour Office under Section 69B if his salary is not more than RM5000 [9] .

The provisions of the Labour Ordinance, Sabah and the Labour Ordinance, Sarawak are similar to the provisions of the Employment Act 1955. However, there are some provisions which are different and pertinent to note: Special Provisions Relating to the Employment of Children and Young Persons. In Sabah, an employer is prohibited from employing a child less than 14 years to work in construction, manufacturing, transportation, mining sector or other places such as restaurants, coffee shops, bars, hotels or offices. In Sarawak, no young person under the age of 16 years shall be employed on underground work in any time. Whereas in Peninsular Malaysia, under the Children and Young Persons (Employment) Act 1966 (Act 350), children under the age of 14 years are only allow to work between 7 AM until 8 PM, also not allow to work for 3 consecutive hours without a period of rest and period of rest shall be at least 30 minutes and etc. For Employment of Non-Resident Employees, it is mandatory for any employer wishing to employ any "non-resident employee" must first obtain a license to employ "non-resident employee" from the Director of Labour Sabah / Sarawak. A "non-resident employee" is defined as any person who does not belong to Sabah / Sarawak as provided for under Section 71 of the Immigration Act, 1959/1963 [10] .

Now we shall examine the basic labour standards that are applicable in Malaysia, such as under Contracts of employment, contracts of employment are usually in writing and must set out the details of the probation period and the manner in which a contract may be terminated by either party. Working hours, working hours may not exceed eight hours per day or 48 per week, unless both parties agree to different limits in the employment contract.

Furthermore, employees may not work more than five consecutive hours without a break of at least 30 minutes. Paid leave, employees are entitled to annual leave based on the amount of time they have been working for the employer. The entitlements are as follows: Eight days for less than two years of service. Twelve days for between two and five years of service. Sixteen days for five years or more of service [11] .

Maternity leave, female employees are entitled to maternity leave of at least 60 consecutive days. Maternity leave must commence before the employee is admitted to hospital, and must not begin earlier than 30 days before this date. The Employment Act prescribes that the employee will receive maternity allowance for each day of the leave period. Termination of employment, employees can be dismissed for reasons that can be objectively defined as for ‘just cause’. If an employee is continuously absent from work, if the employee can no longer perform his or her duties to the standard expected in the contract of employment, and for disciplinary reasons or operational reasons within the company. Lastly Notice, periods of notice, applicable to all dismissals except those for misconduct, are as follows: Four weeks for less than two years of service. Six weeks for two to five years of service. Eight weeks for more than five years of service. These are minimum provisions outlined in the Employment Act. Employers and employees can agree to greater notice periods, which must be recorded in writing in the employment contract. However, employers or employees may make a payment in lieu of notice [12] .

Based on the above information comparison of Labour Law between United Kingdom and Malaysia, basically there are not much different this is because both country the employment are govern by Employments Act especially in Malaysia which is Employment Act 1955 there are also Common Law sources and Cases based on Industrial Court, whereas in UK there are also such Acts, Common Laws particularly Contract Law and Tort Law and European Laws. Therefore there are currently fairly good balance between employers’ prerogative to dismiss staff and employees’ security of tenure, this is because although both employers in UK and Malaysia can dismissed their employees but they can only do so with just cause [13] .

Anyone dismissed without just cause can file a complaint with the Industrial Relations Department and take it up for dispute resolution. Conversely in UK system places the entire evaluation and mediation system under the courts, hence simplifying the complaint procedure. Moreover the terminations in the UK must be justifiable and follow certain statutory rules, included a required period of notice. Failure to adhere to the due-process requirements may result in unfair dismissal or discrimination claims by the employee [14] . This is also the case in Malaysia, periods of notice, applicable to all dismissals except those for misconduct, are as follows: Four weeks for less than two years of service. Six weeks for two to five years of service. Eight weeks for more than five years of service. These are minimum provisions outlined in the S12 of Employment Act 1955 [15] .

Furthermore for background checks regulations, in which companies today are advised to do a background check of people they want to employ to avoid, being cheated. In UK the law allows these checks, but they are only allowed when relevant to the job to be performed. Even the data collection providers must meet certain minimum requirements and be registered with the government before being permitted to conduct checks. In Malaysia loose regulation would not give employers incentives to train staff. "The problem is, employers want plug-and-play employees, most Malaysian companies did not do background checking because they wanted to save money, but this lack of diligence could prove to be very costly, they want workers who can immediately do the job without having to invest in training, usually a background check, costing between RM1250 and RM4000, would give an employer such information as whether a prospective employee had been convicted of cheating or been sacked from a job. For example we can see problems such as fraudsters, employees who stayed at the office until late at night not to work but to steal valuable information to sell to rival companies [16] .

Both country UK and Malaysia also provided the worker benefits to their employee, for example in Malaysia there are EPF and SOCSO. Under The Malaysian EPF it was formally founded after the enactment of The Employees Provident Fund Act 1991 (Act 452), which grants employees retirement benefits via a body that is intended to manage their savings, for SOCSCO it was established in 1971 to provide protection to workers in the event of injury, invalidity, or death. Enrollment in this program is mandatory for all workers earning less than RM 2000 (about US$525) per month. Whereas in UK, Employee Benefits are categorized by three terms: Flexible Benefits (Flex) and Flexible Benefits Packages, Voluntary Benefits and Core Benefits. The Core Benefits is the term given to benefits which all staff enjoys, such as pension, life insurance, income protection, and holiday. The Flexible benefit, often called a "flex scheme", is where employees are allowed to choose how a proportion of their remuneration is paid or they are given a benefits budget by their employer to spend and lastly The Voluntary Benefits is the name given to a collection of benefits that employees choose to opt-in for and pay for personally, although, as with flex plans, many employers make use of salary sacrifice schemes where the employee reduces their salary in exchange for the employer paying for the perq [17] .

These tend to include benefits such as the government-backed (and therefore tax-efficient) cycle to work, pension contributions and childcare vouchers (providers include Edenred, Busybees, Sodexho, Fideliti, KiddiVouchers, Co-operative Employee Benefits and Early Years Vouchers Ltd) and also specially arranged discounts on retail and leisure vouchers, gym membership and discounts at local shops and restaurants. They can be run in-house or arranged by an external employee benefits consultant.

Lastly the right to Trade union which is a fundamental right in both UK and Malaysia. The view that in Malaysia, the right to form labour unions is not fundamental may be doubted if one adverts his mind to an observation made (obiter) by Raja AzlanShah FJ(as he then was) in the case of Non-Metallic Mineral Products Manufacturing Employees Union &Ors v South East Asia Fire Bricks Sdn Bhd [18] . According to the learned Federal Judge, ‘Workers organizations cannot exist, if workers are not free to join them, to work for them and to remain in them. This is a fundamental right which is enshrined in our constitution and which expresses the aspirations of workmen. But then the learned judge made no specific reference to any relevant constitutional provision probably because he was making the statement just by the way [19] .

This is the same in UK, the principle that the common law enforced a union's own rules, and that unions were free to arrange their affairs is reflected in the ILO Freedom of Association Convention, and article 11 of the European Convention on Human Rights, which stated that ‘Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests’, subject to the requirement that regulations "necessary in a democratic society" may be imposed. Unions must have an executive body and that executive must, under TULRCA 1992 sections 46 to 56, be elected at least every five years, directly in a secret, equal postal vote of union members, and if irregularities are alleged, complaints can be taken up by the Trades Union Certification Officer [20] .