Employment Law

There are two significant Acts that govern the employment laws in Malaysia namely the Employment Act 1955 and Industrial Relations Act 1967.   These Acts were enacted to protect the rights and interests of employees and to provide avenues for dispute resolution in the event of breach of the service/employment contract. 

The applicability of the said Acts to a particular employee is as follows:

The Employment Act 1955

  1. regulates the contract of service of an employment contract in the private sector;
  2. sets out the basic and minimum terms and conditions of the employment contract;
  3. sets out the hours of work, weekly rest days, public holidays, annual, sick and maternity leave, termination and layoff benefits;
  4. applies to those whose do not exceed RM1500 a month;
  5. applies to those who are in manual labour occupations;

The Industrial Act 1967

  1. applies to all employees;
  2. no limit of the type of occupation;
  3. employee can be from the private or public sector (public sectors as defined in art 132 of the Federal Constitution) ;
  4. applied to employees of any wage;
  5. codified ways in which all employment disputes are resolved;

Pursuant to the above Acts there are two courts established to deal with the employment disputes and the similarities and differences of both courts are as follows:-

The Labour Court

  1. established to resolve disputes between employers and employees;
  2. jurisdiction is limited to disputes with regards to payment of wages, benefits that the employee is entitled to under their employment contract, under employment Act or under any regulations made under the Act;
  3. to hear dispute with regards to any disciplinary sanction imposed by the employers for alleged misconduct;
  4. right of appeal available to the High Court.

The Industrial Court

  1. set up to hear disputes of employers and employees, trade unions;
  2. to hear disputes with regards to unjustified termination or dismissal;
  3. has the power to re-instate the employee;
  4. awards are final and no right of appeal but on points of law the industrial court may refer the case to the High Court;


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