System Of Payment Of Wages Law Employment Essay

Published Date: 02 Nov 2017

Name

Student ID

Signature

Email Address

ALOYSIUS NG INN EE

1081104423

[email protected]

NAZRAN ARVIND

1081102252

[email protected]

TAN AUN CHEE

1081101983

[email protected]

YAEL-KHAILAN

1081101050

[email protected]

CHU SIU WYEI

1081105211

[email protected]

CHAN CHEE YUAN

1081102921

[email protected]

DECLARATION

We, hereby declare that the coursework produced herein is based on our original effort except for quotations and citations that have been duly acknowledged. This work or any part of it has not been previously or is not concurrently submitted for any other degree at Multimedia University or other institutions. We also fully understand that in the event of any academic dishonesty on our part, we may be subjected to the strict disciplinary action at the discretion of Multimedia University.

Signature:

Name: ALOYSIUS NG INN EE

Student ID: 1081104423

NRIC NO: 900911-04-5191

Date: 29th April 2013

Signature:

Name: YAEL KHAILAN BINTI HJ MD HUSSAIN

Student ID: 1081101050

NRIC NO: 900128-07-5268

Date: 29th April 2013

Signature:

Name: NAZRAN ARVIND BIN NAHDAN RENGGANTHAN

Student ID: 1081102252

NRIC NO: 900812-04-5057

Date: 29th April 2013

Signature:

Name: CHU SIU WYEI

Student ID: 1081105211

NRIC NO: 900328-04-5194

Date: 29th April 2013

Signature:

Name: CHAN CHEE YUAN

Student ID: 1081102921

NRIC NO: 900206-04-5479

Date: 29th April 2013

Signature:

Name: TAN AUN CHEE

Student ID: 1081101983

NRIC NO: 900702-04-5056

Date: 29th April 2013

TABLE OF CONTENTS

CONTENTS

PAGE

Declaration

2-3

Table of contents

4

Assignment Question

5

Introduction

Comment on Employment Act 1955 as well as the Amending Act 1419

6

Contents:

Recent Amendments Employment Act 1955 [Act 1419]

Comparative Study between the Malaysian Employment Act 1950 and UK’s Employment Rights Act 1996

Comparative Study between the Malaysian EA and the Australian FWA

7-17

18-21

22-28

Conclusion

29

Bibliography

30-32

Appendix

33

(No of Pages of Text: 24 pages)

Assignment Question

Provide a breakdown of the latest Employment Act. Discuss whether the current act has improved the previous Employment Act? You are also required to discuss the persisting grey areas and potential pitfalls that may be faced when referring to this act.

In your analysis, a comparative study is required with the Employment Act of England and/or Australia and further identify the efficacy of these acts with their potential pitfalls.

You are further required to suggest any proposal and recommendations in the improvisation of this latest act

Your answer should include amongst others references to appropriate legislation, articles, comments and recent cases, if any

Introduction

The recent amendment of the Employment Act 1955 (Act 265) (hereinafter referred to as ‘the act’), by virtue of Employment (Amendment) Act 2012 (A1419) has provided substantial amendments made to the act with the aim of improving the rights and benefits of employees to be more in line with the guidelines laid down by the International Labour Organisation (ILO). It is rather debatable to what extent those provisions are beneficial, effective, applicable and enforceable in protecting and safeguarding the workmen.

In this context, we will compare and evaluate on the practicability and workability between the prior Act together with the newly inserted and amended provisions in addressing the issues present in the pre-amendment of the act. Further, we shall conduct a comparative study with the UK’s Employment Rights Act 1996 as well as the Australian Fair Work Act to seek further for a better solution in addressing difficulties and technicalities which the act had failed to address.

Recent Amendments Employment Act 1955 [Act 1419]

The Employment Act 1955 (Act 265) had been substantially amended and came into force on 1st April 2012 through the Employment (Amendment) Act 2012 (A1419). Many vital provisions regulating the rights and benefits of employees have been amended and more new provisions are inserted dealing on issues of employment of foreign domestic servants [1] and law handling mainstream issue on sexual harassment [2] . It is rather debatable to what extent those provisions are beneficial, effective, applicable and enforceable in protecting and safeguarding the workmen. Thus, this part of discussion seeks to compare and evaluate on the practicability between the prior Act together with the newly inserted and amended provisions.

Definition of ‘employee’ under S.2(1) First Schedule Employment (Amendment of First Schedule) Order 2012

Any person, irrespective of his occupation, who has entered into a contract of service with an employer under which such person's wages do not exceed two thousand ringgit a month.

[Prior text read - "1. Any person, irrespective of his occupation, who has entered into a contract of service with an employer under which such person's wages do not exceed one thousand five hundred ringgit a month."]

The Employment Act applies solely in Peninsular Malaysia and Federal Territory of Labuan. Employees in Sabah and Sarawak are covered under the Sabah and Sarawak Labour Ordinances. [3] Only selective workmen are covered under this Act. Though job titles are not the fundamental determining factor, wages and occupations is primarily looked on. It is only employees whose wages does not exceed RM2000 per month [4] are covered under the Act.

Question arises as to the intention of the legislators in increasing the ceiling from RM1500 to RM2000. To qualify as an ‘employee’ it is pertinent to determine primarily the drawing salary must not be in excess to the statutory limit which has now been increased to RM2000. Though, if a workmen could prove he is doing ‘manual work’ as per S.2(1) para 2 of the First Schedule Employment Act, then irrespective of his drawing salary, he is still considered as an ‘employee’ within the Act. In Colgate Palmolive (M) Sdn Bhd v Cheong Foo Weng and 12 Others [5] , the issue arose whether the technicians were within the scope of the Employment Act as their wages were above the ceiling set in the First Schedule of the Act. The court opined that if the workers successfully establish and prove that they are indeed manual labourers, then the wages ceiling could be disregarded. Unfortunately, the workers failed to satisfy the test formulated in that case in determining whether they are indeed manual workers. The court went on to say, "It is essential to determine whether the work in question is purely physical in nature, as opposed to work which has a physical/manual content but which is really dependent upon acquired skill, knowledge or experience".

A Federal Court decision in Hoh Kiang Ngan v Mahkamah Perusahaan Malaysia [6] made a comparison between a contract of service to that of an independent contractor working under a contract for services in which the latter is not categorized as a workman/ employee under the Employment Act 1955. Quoting Gopal Sri Ram JCA at page 391;

" In our judgment, the correct test to be applied in determining whether a claimant is a workman under the Act is that enunciated by Chang Min Tat FJ in Dr A Dutt v Assunta Hospital [1981] 1 MLJ 304 at p 311. We accordingly hold that a workman under the Act is one who is engaged under a contract of service. An independent contractor who is engaged under a contract for services is not a workman under the Act. We take this view because it provides, as earlier observed, for a flexible approach to the determination of the question. It is fairly plain to see why flexibility is achieved by having resort to this test.

In all cases where it becomes necessary to determine whether a contract is one of service or for services, the degree of control which an employer exercises over a claimant is an important factor, although it may not be the sole criterion. The terms of the contract between the parties must, therefore, first be ascertained. Where this is in writing, the task is to interpret its terms in order to determine the nature of the latter's duties and functions. Where it is not then its terms must be established and construed. But in the vast majority of cases there are facts which go to show the nature, degree and extent of control. These include, but are not confined, to the conduct of the parties at all relevant times. Their determination is a question of fact. When all the features of the engagement have been identified, it becomes necessary to determine whether the contract falls into one category or the other, that is to say, whether it is a contract of service or a contract for services." [7] 

Take note also that an amendment has been made to the Act to include employee earning between RM2000 and RM5000 per month covering specifically on issues of wages, allowances or other cash benefits under S.69B of the Act. Director General may inquire into and decided any dispute between an employee and his employer in respect of those abovementioned issues [8] though their wages are above the ceiling under First Schedule.

The rationality of increasing the ceiling of wages is to allow more workers to be covered, protected and afforded benefits under the Employment Act 1955. The purpose of the Act is for safeguarding workmen rights in the field of labour. If the ceiling of wages to be regarded as an ‘employee’ remains at RM1500, it limits to only a few selected group of employees who could seek redress or protection under this Act. The higher the wages ceiling being increased, more workers could be regarded as an ‘employee’ and be protected under the Act. After all, the purpose of the Act is to protect and afford benefits to better enhance the rights of workers. The new amendment to this provision could somewhat improve the Employment Act as it allows bigger and wider group of workers to seek protection under the umbrella of the Act.

Sexual Harassment

Sexual harassment has become a sensitive and big issue in every workplace all over Malaysia over the years. Prior to 2012, there is no single piece of legislation in Malaysia that addresses the issue of sexual harassment. Sexual harassment stereotypically applies to women; nevertheless, in actual fact it does not recognize any categories of employees. In Sitt Tatt Berhad v Flora Gnanapragasam, a human resources executive was subject to sexual harassment. The first respondent was the employee of the applicant. She claimed she was forced to resign due to the sexual harassment by her immediate supervisor, one Sivananda Manickam. The first respondent testified that she brought the incidents of harassment to knowledge of the Senior Manager of Operation of the applicant, and to the Executive Director but no action was taken. At the hearing before the Industrial Court, the applicant did not call Sivananda to rebut the complaints made by the first respondent. The executive employers were also not called. The Industrial Court found that the first respondent was constructively dismissed and ordered back wages in lieu of reinstatement. [9] 

A male storehand was a victim of sexual harassment when he was being harassed by his security assistant as occurred in Varitronix (M) Sdn Bhd v Thandavanaiker P. Raman [10] . Even women sport athletes may be subject to sexual harassment as illustrated in the case of C Ramanathan v. Dato Hj Khalid Yunus [11] .

With the insertion of Part XVA in the Employment Act 1955 from S.81A till S.82 the government has taken a giant leap by amending the existing Act to afford protection and remedial avenues for sexually harassed employees. While it seeks to provide many positive benefits and protections, one could not help to notice several grey areas that exist within the sections. S.81B of the Act entrust on the employer or class of employers to inquire into the complaint in a manner prescribed by the Minister.

The inquiry is to be done by the employer; thus, what will happen if the employer himself is the one committing the act of harassment? surely he will refuse to inquire into the complaint as occurred in Sitt Tatt Berhad? Even when the alleged perpetrator is a member of the management, a partner, shareholder and/or director of the employer’s business. Shouldn’t he be disqualified from the ad hoc board to convene the inquiry process? In cases of family business where other employers chooses to cover up the complaint, the fine of RM10,000 for breaching S.81F of the Act is very minimal compared to the injury done to the complainant. The provision seems rather vague but perhaps Practice Directions could supplement on the fine prints of implementing and executing those legal provisions.

The extent of effectiveness of the newly inserted provision is rather questionable. S.81G of the Act states that regardless of para 1 of the First Schedule, Part XVA applies to every employee employed under a contract of service irrespective of the wages of employees. Being under the chapters in the Employment Act1955, it only covers employment under contract of services thereby leaving the independent contractors or agency workers working under contract for services, unable to seek protection.

It provides no clear right of appeal to the Labour Courts or the High Court. Note that other workers’ rights violations are currently all dealt with by the definitely more independent Labour Department or Industrial Relations Department. The remedy for the victim of sexual harassment is also absent, save maybe the right to resign without the need to give the required notice when the perpetrator is a sole proprietor. [12] 

Even if protection is available to women, problems may arise in its implementation and the willingness of the EA to recognise that its protection is extended to sexual harassment victims. [13] The extent of its effectiveness in protecting and defending the victim’s rights is rather dubious. In reality, it is very difficult to prove a case on sexual harassment as gathering the evidences would be a cumbersome feat. Eye witnesses whom are amongst the employees of the same workplace would rarely come forward to become a witness, as to do so would jeopardize their own job. Circumstantial evidences such as being harassed verbally, grabbing, touching or any form of harassment are hard to prove. It is as tough as proving the criminal offence of raping to that of sexual harassment. CCTV, video recordings within the vicinity of the workplace in which the harassment occurred are mere impossible to be supplied by the employers on incriminate itself. Perhaps the Act should include a provision to mandatorily force the employers to cooperate insisting the inquiry process or perhaps the ‘discovery’ process under Order 24 Rules of Court 2012 ought to apply in such circumstances.

Foreign Employees

Malaysia, being one of the largest importers of labour in Asia, has been battling and on-going turmoil between countries such as Indonesia, Philippines and many more revolving around foreign workers. Due to rampant cases of maid/ "foreign domestic workers" (FDW) abuses reported, the several Embassy’s had advised its government to stop sending maids to Malaysia indefinitely. Even Cambodia has banned its citizens from becoming maids in Malaysia following vigorous reports of maid abuses and assaults received in October 2011 [14] . Ministers in our country had agreed due to the influx of Filipino migrants that their FDW’s be provided with one day off a week – usually Sunday. [15] 

When we speak about foreign employees, it involves FDWs, foreign workers in hard labour and etc. as well as professional expatriates. The Employment Act 1955 does not provide extensive provisions in protecting and benefiting foreign workers. After all, they too are considered ‘employees’ in the literal interpretation of the First Schedule. The Act seems to be silent or perhaps on the fence refusing to legally protect the foreign workers rights such as regulating hours of work, holidays, days off, termination, overtime pay, minimum wage pay and etc [16] . The Act 265 obviously does not cover this branch of foreign employees as they do not fall within the category of ‘employees’ under the Act.

Amendment Act 1419 of the Employment Act 1955 seeks to introduce some sort of guideline or protection for the FDWs through the insertion of S.57A and S.57B of the Act. S.57A provides for the period in which employers need to inform Director General within 30 days of employing or terminating an FDW. Part XII B [17] of the Act has somewhat filled the gap in the laws protecting the foreign employees in areas of retrenchment, unfair treatment. Here, there appears to be redundancy in the law. The new inserted provisions under Act 1419 is actually similar to that of Part XII B – only difference is that it separate FDW from ‘foreign employees’ heading. Thus, it seems to act only as an iron curtain to protect the government from negative assertions.

Apart from that, the punishments imposed on employers for contravening these provisions are merely monetary in nature. It is rather inadequate for extreme cases such as rape and violent abuses as seen in the case of Murugan a/l Arumugam v Pendakwa Raya [18] . The appellant was convicted and sentenced for the offence of murder by causing death to an Indonesian worker under the Penal Code. The deceased, Muntik, ran away from her former employer and sought shelter at the house of the appellant temporarily. However during her stay at the appellant's house, she was assaulted resulting in her suffering spinal injury, fractured ribs and physical immobility. The cause of death, was due to "spinal injury due to blunt force trauma with septicaemia due to right leg ulcer".

The Employment Act should instead provide more stringent provisions such as providing safe and separate accommodations for female employees, allow them to hold their personnel belongings such as their passport, contract and so on.

System of Payment of Wages

The current system of payment of wages is governed under the newly amended S.25 (1) EA where it provides that the entire amount of wages shall be paid through an account at a bank. Part V of the Employment Act was priory referred to as "Relating to the Truck System" in which payments are paid in legal tender and any other form of payment other than such shall be illegal, null and void. Payment of wages though bank or cheque is only a secondary option under the pre-amended S.25A. The current EA requires payments of wages now are made directly through bank accounts unless the employee by written request to be otherwise [19] . This is a laudable amendment as it eases both employees and employers when it comes to paying and receiving wages. Both parties could keep track of the transactions and it is also useful in terms of the wages being recorded and could be furnish as documentary evidences in court of law [20] .

Contractors, Principals and Contractors for Labour

S.33A of the Act1419 was inserted to address the dilemma of the principal, contractor and

sub-contractors, especially in the plantation sector. The new provision requires contractor for labour to register those employees it undertook with the Director General [21] and to keep and maintain in registry information on employees for monitoring and inspection purposes by the Labour Department [22] . With such systematic data system, the Labour Department will have a complete list/records of the contractors to enable protection of its employees. This provision is strongly supported by the National Union of Plantation Workers (NUPW). The term ‘contractors for labour’ is not something new. It is inserted under the heading of Part VIII only to clarify the relationship existed between principal, contractor and sub-contractors who supply labour to the principal jointly making all parties liable to pay employees under these chain of employers wages [23] 

The issue of who shall bear the responsibility to pay wages to employees under principal,

Contractors and contractors for labour is discussed in the case of Lembaga Kemajuan Tanah Persekutuan v Mat Akhir Bakar & Ors [24] . The respondent commenced proceedings against Felda (appellant) on the issue of payment of wages of 94 workers. Felda appeals on the ground that since it does not carry on a trade or business, s. 33(1) of the Act are inapplicable against it as it was not a principal and the respondents were not its employees. It was held that Felda was at all material times conducting a business (of developing land and giving it to the landless) within S.33(1) of the Act and it is clear that the work done by the respondents under the contract, did constitute work undertaken by the appellant as principal.

In Soon Peng Siong V. Sin Yuh Miaw [25] His Lordship Chua J said

"In order that s. 19(1) shall apply there must first be work undertaken by the principal; secondly, the work must be in the course of, or for the purpose of his trade or business; and thirdly, he must contract with another person for the execution of the whole, or some part, of the work. Whether the work is undertaken by the principal is in each case a question of fact". [26] 

Be it as it may, the grey areas arising from this provision appears to disguise employment relationship by way of triangular relationship. Workers in factories, construction sites, and plantations are no longer employees of the owner of those workplace (principals) but would now be employees of the suppliers of workers, known as ‘contractors for labour’. S.33(1) of the Act enjoins all 3 parties to be liable in paying wages to such employees but take note of the proviso (a-c). Principal are not liable for payment of wages thus workers under this triangular relationship would be treated differently in terms of wages, work benefits and even rights by reason of the fact that their employers are different. A just employment relationship dictates that all workers should be employees of the owner-operator employers. [27] 

Maternity Protection

The Human Resource Ministry appears to be concerned with the welfare of women workers

The ministry reviews the period of confinement from a 28-week pregnancy to 22 weeks in order to enjoy for maternity benefits of 60 days maternity leave [28] .

Another praiseworthy provision giving benefits for female employees is the insertion of S.44A of the Act [29] which allows every female employee to enjoy the benefits under this Chapter irrespective of her wages. This could be highlighted in the case of Century Mahkota Hotel, Melaka & Anor v Michele Geraldine Kessler [30] . The company submitted that the claimant was absent for the period between 2 to 5 January 1998, 18, 20 and 21. The claimant alleged that she was on medical leave and submitted that she had given the MCs to the company to prove this. The company claims she did not. Their most important allegation and charge was with respect to the misconduct of abscondment, being the actual and immediate reason for them terminating her services. The claimant submitted that she was on her second pregnancy (she lost the first child due to a miscarriage the previous year) and had experienced bleeding, which was the main reason she had been on a continuous sick leave in a series beginning from 7 January 1998. It is settled law that in cases of direct dismissal, the employer has the burden of proving that the acts of misconduct have indeed been committed by the employee, and if so, whether it deserves a dismissal. It is incumbent to apply the reasonable test in the present circumstances, as opposed to the contract test applicable in indirect dismissal cases. The test revolves whether the actions or conduct of the employer have been reasonable or not, further, whether it had been fair or unfair The company was already aware of the claimant's pregnancy complications as early as 19 January 1998. Therefore he should not have rigidly applied s. 60F(2)(b) EA when he has to consider other provisions governing pregnancy and confinement. Even if, which is denied, that she had been in breach of some provision of her contract of service, in terms of her failure to inform her employer within the 48-hour requirement, it could not have even merited a deduction in salary, let alone the extreme punishment of dismissal. It is an unfair dismissal whereby protection under S.42 of the Act now extends to every female employees under S.44A of the Act1419.

Many provisions were being amended under this Chapter. However, there are a hand full which are petty and redundant. For example S.37(1)(a), (d), and 2(a) are redundant as it merely amend the formatting and changes the construction of the wordings vice versa and paragraphing it only. It is pointless as the amendments made were not beneficial to female employees. S.37(4) is actually a deletion from S.40(3) of the Act. On a larger scale the amendments may have substantially improve in many ways the welfare of employees and workmen, however, there are still persisting issues such as the practicality of application of some sections.

Comparison of Malaysia’s Employment Act 1950 and UK’s Employment Rights Act 1996

In UK, the relevant legislation that governs the rights, benefits and entitlements of the employee is the Employment Rights Act 1996. The UK’s Employment Rights Act 1996 (ERA) is different from the Malaysia’s Employment Act 1955 (EA) in a few aspects. Such differences will be discussed as follows.

Unfair Dismissal

Under section 94(1) of the Employment Rights Act, it is provided that an employee has the right not to be unfairly dismissed by his employer. This means that any dismissal of the employee must be done fairly. To evaluate what amounts to fair, one must refer to Section 98 of Employment Rights Act. Section 98(1) states that it is for the employer to provide reason for the dismissal. Meanwhile, the reason for the dismissal will be considered as fair if it falls under section 98(2); which relates to the capability or qualification of the employee in performing work; the conduct of the employee; retirement of the employee; where the employee is redundant or the employee cannot continue to work in his current position without contravening either a duty or a restriction imposed by law.

Thus, an employer can fairly dismiss an employee due to any circumstances arising out of those stated under section 98(2). This section (section 94) can be seen as one of the most important rights granted to the employee as it prevent the employer from abusing their power in dismissing the employee as they wish. As compared to Malaysia’s EA, such provision which provide restriction for unfair dismissal is not available.

Maternity leave, paternity leave and parental leave

In UK, employees are entitled to maternity leave, paternity leave and parental leave. On another hand, in Malaysia, the employees only enjoy the benefit of maternity leave but there is no such entitlement for the father of a newborn to take paternity leave. Under section 80A(1) of the Employment Rights Act, it is stated that the Secretary of State can make regulations to entitle an employee to take leave from work for the purposes of caring for the child or supporting the mother. [31] 

Paternity leave can be seen as one of the fundamental rights that an employee should be entitled to especially if there is no one there to help the mother in taking care of the baby. The baby’s father should be by the mother’s side to assist her in taking care of the baby and also look out on her during her confinement period. Besides that section 76 (1) states that the Secretary of State can make regulations to entitle an employee to be absent from work on parental leave in order to care for a child. [32] With that, if in any case a child is sick or need any care by an adult, the employee (as parent to the child) is entitled to take parental leave to take care of the child.

Statutory Right to Request Contract Variation

Unlike EA of Malaysia, section 80F of the Employment Rights Act allows employee to request for flexible working hours. However, it must be noted that an employee is not granted for flexible working hours automatically as of right. The employee merely has a right to request for flexible working hours where the employer still retains the right to reject it. Whereas in Malaysia, the employees shall be entitled to a rest day in each week and subject to the hours of work as provided under section 60 of EA.

Redundancy Payments

According to the UK Government website, redundancy is a form of dismissal from your job and usually happens when an employer needs to downsize their workforce. [33] In the UK, an employee will be entitled to redundancy payments only if that employee has been working for the employer for 2 years or more. The Employment Rights Act 1996 provides for the minimum statutory redundancy payment. An employee aged 41 or more will be entitled to 1.5 weeks’ pay for each year of employment. [34] An employee aged 22 or more is entitled to 1 weeks’ pay for each year of employment. [35] If an employee does not fall in the category above, he will be entitled to half a weeks’ pay for each year that they have been employed. [36] 

In Malaysia, redundancy payments are governed by the Employment (Termination and Lay-off Benefits) Regulations 1980. If an employee has worked under a contract of service for less than 2 years, he will be entitled to 10 days [37] of wages for every year of employment, 15 days of wages [38] if he has been employed between 2 to 5 years or 20 days [39] of wages if he has been employed for 5 years or more.

After comparing the relevant legislation from both countries, the first thing that comes to mind is that the Malaysian provision prescribes a higher number of days of wages for the calculation of redundancy payments and whether that is better than the UK provision is subjective. However, Malaysia is less strict as it does not prescribe a minimum period of employment compared to UK’s 2 years in order to be entitled to redundancy payment. The position in Malaysia is clearly more beneficial to employees.

Insolvency of Employer

In UK section 182 of the Employment Rights Act provides recourse to employees whose employer has become insolvent. Section 182 states that an employee can make an application the Secretary of State for payment that is owed by the employee’s employer who has become insolvent. The Secretary of State must be satisfied that the employer to the employee has become insolvent and as a result of the insolvency, the employee’s employment is terminated and that a debt is owing to the employee. [40] Once the conditions above have been satisfied and subject to section 186, the employee shall be paid out of the National Insurance Fund.

While in Malaysia, the EA does not cover the right and benefit of the employee in this area. When an employer becomes insolvent, creditors have the right to claim back what is due to them from the employers over any other claims. This view was expressed by the Industrial Court in the case of Glaspec (M) Sdn Bhd v Azman Bin Ujang & Ors [41] in paragraph 22 of the judgment where it states that monetary compensation by the Industrial Court is not given statutory priority over secured creditors when an employer becomes insolvent. The court in this case went as far as to call the award a ‘useless paper award’ and that the Parliament should address this issue.

It has been suggested that a national insurance fund similar to the UK be set up in Malaysia to reduce the impact of insolvency on employees and that the priority of creditors be revised. [42] 

Employment Tribunal

In UK, if there is any complaint with regards to unfair dismissal, redundancy payments or employment discrimination, the employee can make a claim in the employment tribunal. A party making a claim has to present a valid Claim Form to the Employment Tribunal Officer within the appropriate time limit. If the Claim form is submitted late, the Employment Tribunal Officer may not be permitted to hear it and the claim may be dismissed just on that basis alone.

Meanwhile, a party defending the claim has to present a Response Form to the Employment Tribunal as well within 28 days where the Claim Form was sent to the officer. [43] Besides, anyone has any inquiries can contact the Employment Tribunal via their public enquiry line or through email.

In contrast with Malaysia, the Malaysian Bar Council had proposed to set up an Employment Tribunal in order to speedily dispose unfair dismissal cases. [44] The Bar Council also contended that if the matter goes to court, it might take up to 10 years to resolve the issue. With that, one can clearly see that in UK, if the employee has a problem, he can just refer it to the Employment Tribunal and the Employment Tribunal will deal with the claim entirely even when the claim is subjected to review. Whereas in Malaysia, if a party is not happy with the award given by the Industrial Relations Court, he has to file the appeal in either one of the Appellate and Special Powers Division of the High Court. Such process may take up an unnecessarily long time.

Comparative Study between the Malaysian EA and the Australian FWA

The regulation of labours in Australia is a rather complicated one. This is due to the coexistence of labour legislation in both federal and territory level. The labour legislations and schemes in Australia is not as direct as in Malaysia as the Federal laws have to function side by side with the territory-based regulations. Due to the complexity, courts in Australia have been playing a vital role in the interpretation of these intricate labour statues. Judge-made law (including those made by other commonwealth nations) is thus very influential in the Australian labour system. [45] 

The primary Federal law regulating the Australia labour system in the Fair Work Act 2009(hereinafter referred to as "the FWA"). Fair Work Act came into force in 1st July 2009 and was enacted to replace the Workplace Relations Act 1996. [46] 

For the purpose of discussion on this area, our primary concern will be placed on Part2-2 of the FWA where the National Employment Standards have set down the minimum standards that should be applied in relation to employment of employees covered under the Act. [47] 

In Australia, employees who are working full time, cannot be required to work more than 38 hours in a week unless the additional hours are reasonable. To make the provision clearer, subsection (3) to s.62 of FWA have laid down the factors that have to be taken into account in determining whether additional hours are reasonable. [48] In contrast, s.60A(1)(d) of our EA states that the maximum hours of works of an employee under his contract shall not exceed 48 hours in one week. This is subject to s.60A(1A) where the Director General may grant permission to employer to require employees to work in excess of the limit of hours as prescribed.

Take note that by virtue of s. 70 of FWA, employee or employee’s spouse or de facto partner are entitled to 12 months of unpaid parental leave for the birth or adoption of a child. [49] From this aspect, the Malaysian EA seems to be grossly inadequate as it only provides maternity protection for female employees. According to s.37 (1) of the Malaysian EA, all female employees are given maternity leave up to 60 days for every time they deliver a child and male employees are not accorded with paternity leave when their spouse gives birth. If men are given the right to paternity leave, they could help to take care of their new-born child and also able to bond with the child. [50] It must be noted that the Australian case of Darlaston v Risetop Construction Pty Ltd [51] made it clear that a contractor which was engaged under contract for services was not entitled to entitlements stipulated under the FWA which include parental leave. [52] 

On the other hand, the FWA does not expressly provide for maternity allowance like what the Malaysian EA does as can be seen under Part IX of the EA. However, starting from 1 January 2011, eligible employees in Australia is entitled to get government-funded pay in addition to their unpaid leave entitlements as provided for under the Australian Government Paid Parental Leave scheme. [53] Parents who are unemployed and individual contractors will receive this entitlement as well directly from Centrelink. [54] 

Another notable difference between our EA and the Australian employment law is on the aspect of substitution of public holiday. Proviso to s. 60D of EA stipulates that in the case where a public holiday falls on a rest day, the working day immediately the rest day shall substitute that public holiday. For example, if a public holiday falls on a Sunday which is rest day for most of the employees in Malaysia except Kelantan [55] , the paid holiday would be brought forward to the next following day, i.e. Monday. Conversely, the MCE Act which applies only to Western Australia recognise the actual day of the holiday to be public holiday and no substitution is provided. [56] 

In addition, under the FWA, employees are entitled to personal/carer leave, compassionate leave, unpaid carer leave, community service leave and long service leave. [57] All these leave are not provided under the Malaysian EA. Hence, one may draw an inference that the Australian FWA seems to provide more benefits for employees compared to the Malaysian EA.

The Efficacy of the Fair Work Act 2009

It is undeniable that the Australia current labour government [58] intended to improve the workplace relations by introducing the Fair Work Act 2009. Despite this, there are still pitfalls under FWA.

Lack of Competition

Australians’ labour competitiveness and productivity have experienced an erosive fall in the recent past. It is arguably that the FWA which inhibits flexible working arrangement [59] is to be blamed for the productivity doldrums in Australia. The Australia Industry Group is of the view that the new Act was drafted in such a way that it is hampering the employers to maintain flexible workforces. [60] However, my group members and I disagree with that and we hold a totally opposite view on this issue. The new FWA is said to pamper the employees by allowing the employees to request for flexible working hours if they happened to have child whom is under schooling age or whom are disable (under the age of 18) to be taken care of. [61] The general rule is that the request must be granted and the burden is on the employer to show that there is a reasonable business ground for the rejection. [62] It is submitted that the FWA has excessively burdened the employers by giving employees the right to ask for flexible working hours and this has led to the downfall of productivity of manufacturing industries in Australia.

Individual Flexibility Arrangement

Individual Flexibility Arrangement is a replacement to the previous statutory agreement (which is known as Australian Workplace Agreements) provided by its anticedent Act. [63] Individual Flexibility Arrangement is less meaningfull compared to the Australian Workplace Agreements as under the former agreement, employees can by notice cancel the agreement. [64] Employers would be reluctant to enter an Individual Flexibility Arrangement with employees as it requires an increase in wages in return for some flexibilities but the agreement can be terminated according to employee’s wish provided sufficient notice is given. [65] 

S. 90

S 90 of Australia Fair Work Act 2009 creates confusion over its correct interpretation. Employers as well as employees are often confused on whether annual leave loading is payable upon termination of employment. The new s. 90 expresses that leave loading become payable by the employer during the termination of the employment as contrast to most of the Australian’s modern awards. [66] It is thus suggested that the Fair Work Act 2009 should be amended to allow this issue to be resolved by the Fair Work Australia [67] instead of interfering the common practise in the field. [68] 

Transmission of Business

FWA 2009 is also heavily critised as it creates a mess to the well settled rule as illustrated under the previous Workplace Relations Act 1996. [69] In the past, if a company chooses to restructure or carry out outsourcing, the law [70] requires the new employer to succeed the rights and obligations of the preceding employer over the employees. [71] The new Act was drafted in such a way that it affords the new employer plenty of reasons for discontinuing the employment with the original employee of the restructured company. [72] 

Probable Solutions to the Malaysian EA’s pitfalls

Trial worker

It is to be noted that to be qualified as an employee under Employment Act 1955, the person must at least be paid by his employer. [73] This could cause a kiosk say a trial worker who was employed to work but was not paid. These "employee" may thus not covered and unable to enjoy the privileges that they are supposed to be entitled to. The definition of "employee" under Australia Fair Work Act 2009 could be a good reference to the Malaysian legislators on its improvement. Under s 14 of the FWA, any person who carry on an activity (in any nature) in a territory of Australia, so far as the person employs, or usually employs, an individual in connection with the activity carried on in the Territory, he is said to be an employee. [74] It is submitted that the widening of the coverage of categories of persons under the EA 1955 is highly necessary to ensure that the basic welfares of the working groups are well protected.

Small Claims Procedure

Complex and unfriendly procedure in filing a complaint is always the obstacle that prevents abused employees to bring an action agaisnt their employer. Another reason as to why the Malaysian employees are reluctant to bring an action is because they are indirectly forced to hire a lawyer (which could cost more than what they are claiming) for their lack of procedural knowledge in filing such an action. Adopting the small claims procedure as provided by the Australia Fair Work Act 2009 can counter this problem once and for all. Under the small claims procedure, courts are not bound by any rules of evidence and procedure and they may even accept evidence and testimony in an informal manner. [75] In the meantime, all sort of legal forms and technicalities can too be disregarded by the court in hearing such a complaint. [76] 

Conclusion

In conclusion, it is with no doubt that Act 1419 has substantially improved the coverage of the Employment Act 1955 as earlier discussed which include but are not limited to; additional maternity protection, the definition of an employee (which essentially determines if at all such a person is covered by the Employment Act 1955), the payment of wages from that of a truck system to a proper payment through a bank account as well as the addition of the sexual harassment provisions. That being said, it is not safe to conclude that our Malaysian Employment Act 1955 is fool’s proofed and essentially perfect. This is definitely not the case. The statute may stipulate clearly provisions to safeguard interests of employees; however, the practical applications well as the procedural efficacy of the Act 1419 may not be as productive and effective as what the legislators intend.

In this context, we had discussed in detail (as far as the page limitation permits) a comparative study between two different countries namely, the UK’s Employment Rights Act 1996 and the Australian Fair Work Act 2005. Based on this, we conclude that their legislators had prepared a superior and more comprehensive enactment of their employment laws (although not in totality but certainly in most areas and issues relating to employment) when compared to the Malaysian Employment Act. Their statutes have provided for many areas to improve employees’ rights [77] as abovementioned, many of which our legislators can learn from and adopt and apply to further improve our Employment Act 1955.

Bibliography

Legislations

Malaysian Legislations

Employment Act 1955 (Act 265) ; Employment (Amendment) Act 2012 (A1419):

Section 2 (1)

Section 33

Section 33A

Section 37(1)

Section 40(3)

Section 42

Section 44

Section 57A

Section 57B

Section 60A (1) (d)

Section 60A (1A)

Section 60D

Section 60F

Section 69

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Part XVA

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Employment (Termination and Lay-off Benefits) Regulations 1980, Regulation 6(1)

Evidence Act 1950 (Act 56) , Section 90A

Rules of Court 2012, Order 24

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Employment Rights Act 1966, Section 94(1)

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Murugan a/l Arumugam v Pendakwa Raya [2012] MLJU 1546

Glaspec (M) Sdn Bhd v Azman Bin Ujang & Ors AWARD NO: 1746 OF 2006 CASE NO. 13/4-1650/0517462006

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