Topic 

 Legal
Environment
2
LEARNING OUTCOMES
By the end of this topic, you should be able to do the following:
1. Identify Acts that influence human resource management.
2. Describe the importance of the legal environment in human resource
management.
3. Explain the aspects in each Act that influence human resource
management.
4. Discuss the purpose of each work-related Act enacted by the
Malaysian government.

 INTRODUCTION
The Employment (Amendment) Act 2000 [Act A1085] was enforced on 1 October
2000 while the Employment (Amendment) Act 2012 [Act A1419] took effect on
9 February 2012. They are part of the Employment Act 1955, which comprises
laws and regulations concerning employment and work relations enacted by the
authorities and are regularly amended to fulfil current needs.

These laws and regulations influence the policies, activities, and human resource
management programmes formed by an organisation. The organisationÊs
management team, especially the human resource management unit, needs to
create policies and procedures which abide by the law, so that all actions taken will
be according to the law.

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Among the Acts related to human resource management in Malaysia are:

 Employment Act 1955

 Industrial Relations Act 1967

 Trade Unions Act 1959

 Occupational Safety and Health Act 1994

 EmployeesÊ Social Security Act 1969

 Human Resource Development Act 2001

 Employees Provident Fund Act 1991

 WorkmenÊs Compensation Act 1952

2.1 IMPORTANCE OF LEGAL ENVIRONMENT

IN HUMAN RESOURCE MANAGEMENT
Can you imagine what could have happened if there were no laws to regulate
employment issues in Malaysia? Are you willing to work for more than 8 hours
with little pay and poor working conditions?

Each organisation has objectives to achieve and engages people to work on them.
Therefore, people are important assets to all types of businesses. Although new
technologies may change the employment landscape, people are still an integral
part of business success. Organisations may exploit their employees intentionally
or unintentionally to achieve their organisational objectives. The organisations also
may be harmed through unethical conduct by their employees or their negligence.

Therefore, laws were introduced to regulate the conduct of all parties in

organisations. These laws are important to:

 protect employees from exploitation by their employers;

 create work-life balance for the people working in the organisations;

 regulate employee grievances;

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 provide a medium for employeesÊ future savings;

 compensate employees for work-related injuries; and

 enhance employeesÊ job and career development by means of skills and

knowledge acquisition using a special fund.

2.2 EMPLOYMENT ACT 1955

ACTIVITY 2.1

Before exploring the legal aspects of work relations, consider what could
have happened to work relations between an organisationÊs management
and its employees if there were no legal system enacted to protect the
rights of both parties. Discuss with your coursemates in myINSPIRE.

The Employment Act 1955 was enacted to protect employees from

exploitation by employers, and became the legal foundation in highlighting
the minimum conditions and terms related to work that need to be followed
by management.

A few amendments were made to the Act since its enforcement and the latest
amendments were made in 2011. This Act is referred to as the Employment
(Amendment) Act 2012. Some of the amendments found in this Act include:

 new definitions of „contractor for labour‰, „part-time employee‰, and „sexual

harassment‰ (Part I, Section 2)

 payment of wages (Part III, Section 19 & 22)

 system of payment of wages (Part V, Section 25)

 contractors, principals and contractors for labours (Part VII, Section 33A)

 maternity protection (Part IX, Section 44A)

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 domestic servants (Part XI, Section 57A & 57B)

 public holidays (Part XII, Section 60D)

 employment of foreign employees (Part XIIB, Section 60K)

 complaints and inquiries (Part XV, Section 69B)

 sexual harassment (Part XVA)

The Employment Act 1955 focuses on employees who are contractually bound to
the management and:

(a) their monthly salary is not over RM2,000; or

(b) not taking into account their monthly total earnings, are working as a:

 manual labourer

 supervisor to manual labourers

 person involved in handling motor vehicles

 domestic employee

In this topic, we will only discuss a few important elements of work relations
mentioned in the Employment Act 1955 as shown in Figure 2.1.

Figure 2.1: Employment Act 1955

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2.2.1 Contract of Service

A contract of service is an agreement whereby employers agree to employ a
worker to work and the worker agrees to serve as an employee. This can be done
verbally or in writing, explicitly or implicitly. In certain instances, such as the
following, the contract of service needs to be done in writing:

 work that involves a duration of more than one year; or

 an apprenticeship contract that is not less than two years.

The Employment Act 1955 also allocates a few prohibitions towards the contract
of service such as:

 Barring employees from participating in any trade union activities and

associations; and

 Setting conditions on how employees spend their fee.

Apart from that, the end of a contract of service notice needs to be stated in the
contract of service. If the notice period is not set in the contract of service, the
minimum period of notice that is allocated under the Employment Act 1955 is as
shown in Table 2.1.

Table 2.1: End of Service Notice

Period of Employment Period of Notice

Less than 2 years 4 weeks

2 years or more, but less than 5 years 6 weeks

5 years or more 8 weeks

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ACTIVITY 2.2

Even though a contract of service can be made verbally or in writing,

what are the terms that need to be given to an employee in writing or
before he or she starts working? Discuss with your coursemates in
myINSPIRE.

2.2.2 Payment of Wages

The period of payment of wages cannot extend to more than a month and
employers need to pay their employees no later than the seventh day after the last
day of the payment period. However, as the meaning of wages includes overtime,
organisations found it difficult to calculate overtime payments in time to meet the
seventh day requirement. Therefore, the new amendments in the Employment
(Amendment) Act 2012 under section 19(2) stated that employers are allowed to
pay wages for work done on a rest day, public holiday, and overtime not later than
the last day of the next wage period. As such, an employer can pay employees their
wages for the month by the seventh of the following month and make payments
for work done on a rest day, public holiday, and overtime with the following
monthÊs wages.

It is the right of employers to stop making any payments to the employees if the
employees are not present at work due to imprisonment or attending court unless
their attendance in court is as witness for the employers.

ACTIVITY 2.3

If your payment period is from the 14th of this month until the 13th of
the next month, according to the Employment Act 1955, what is the last
day that your employer needs to pay your fee? Share and check your
answer with your coursemates in myINSPIRE.

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2.2.3 Recruitment of Women

According to the Employment Act 1955, female employees working in the
industrial and agricultural fields are not allowed to work from 10pm to 5am.
However, employers can apply to the Director-General of the Labour Department
to enable female employees to work at these times.

Study the Employment Act 1955: Part VIII and find the protections that need to be
given by employers to female employees.

2.2.4 Maternity Allowance

Female employees have the right to maternity leave of at least 60 days for every
delivery, and a maternity allowance at the rate of a normal fee or their monthly
salary if they have informed the employer four months before their confinement
and have already been employed by the employer:

 at any time in the four months immediately before their confinement; and

 for a period of, or periods amounting in the aggregate to, at least 90 days
during the 9 months immediately before their confinement.

However, female employees who have five or more living children are not eligible
for maternity allowance. Apart from that, female employees have the right to take
30 days of maternity leave prior to or right after the delivery.

Previously, a female employee who was not within the scope of the Employment
Act 1955 was not entitled to maternity allowance unless the contract of service
stipulated otherwise. However, with the Employment (Amendment) Act 2012
under Section 44A, the scope of maternity allowance was extended to all female
employees who are employed under a contract of service irrespective of wages.

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2.2.5 Normal Hours of Work

Figure 2.2 shows the normal work hours according to the Employment Act 1955.
The Employment Act 1955 states that work hours cannot exceed 5 hours without
being given any rest of at least 30 minutes. For example, if work hours are from
8am to 5pm, employees must be given rest 30 minutes before 1pm or, at the latest,
1pm.

Figure 2.2: Normal Hours of Work According to the Employment Act 1955 (Section 60A)

Apart from that, employees should not be required under their contract of service
to work more than 8 hours a day (not including rest period). If an employeeÊs work
hours are from 9am to 6pm (9 hours), he needs a rest from 1pm to 2pm (1 hour).

The total working hours in 1 week should not be more than 48 hours. However,
employees are allowed to work overtime. The maximum number of overtime
allowed for an employee is 104 hours in a month, unless exempted by the Minister
under Section 2B.

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ACTIVITY 2.4

Go online and find out three types of eligible unused sabbatical leave
during employment. Share your findings in myINSPIRE.

2.2.6 Rest Days, Hours of Work, Holidays and Other

Conditions of Service
Every employee has the right to enjoy a minimum number of rest days, hours of
work, holidays, and other conditions of service under the contract of service as
enacted in the Employment Act 1955. Among the holidays covered in this Act are:

(a) Rest Days

Employees shall be allowed a whole day of rest in a week. However, in cases
where they are required to continually engage in work on a rest day (due to
the nature of the job), they shall be paid accordingly as shown below:

 Employees employed on daily, hourly or other similar rates (Table 2.2):

Table 2.2: Daily/Hourly Wages for Rest Days

No. of Hours of Work Wages

Does not exceed half of normal hours of 1 day wage at ordinary rate
work.

More than half but does not exceed the 2 days wages at ordinary rate
normal hours of work.

 Employees employed on a monthly or weekly rate of pay (Table 2.3):

Table 2.3: Monthly/Weekly Wages for Rest Days

No. of Hours of Work Wages

Does not exceed half the normal hours of work. Half day of ordinary rate

More than half but does not exceed the normal 1 day of ordinary rate
hours of work.

 For work done exceeding normal hours of rest day in (i) or (ii), they shall
be paid no less than 2 times their hourly rate of pay.
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 For those employed on piece rates who work on rest day, they shall be
paid 2 times their ordinary rate per piece.

(b) Weekly Leave

Employees have the right to enjoy a day of leave every week. In certain
situations, such as when the workplace is far away and travelling takes
a long time, employees are allowed to group their weekly leave on the
condition that the employers ask for permission from the Minister of Human
Resources.

(c) Public Holidays

Employees have the right to enjoy 11 days of gazetted public holiday which
are set for that particular year. The 11 public holidays must cover these
5 days:

 National Day

 Birthday of the Yang di-Pertuan Agong

 Birthdays of the Sultan and Yang di-Pertuan Negeri or Federal Territory

Day

 Labour Day

 Malaysia Day

(d) Annual Leave

Employees have the right to obtain a minimum number of annual leave
according to their service period, as allocated in the Employment Act 1955,
as shown in Table 2.4:

Table 2.4: Annual Leave Entitlements

Employment Period Number of Days Allowed

Less than 2 years 8 days

2 years or more, but less than 5 years 12 days

5 years or more 16 days

Employees who are absent from work without permission from employers
and without any appropriate reason, and whose absence exceeds 10% of
working days for 12 months continuously are not eligible for annual leave
for the duration concerned.

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(e) Sick Leave

The minimum sick leave for all employees allocated under the Act is as
shown in Table 2.5.

Table 2.5: Sick Leave Entitlements

Employment Period Number of Days Allowed

Less than 2 years 14 days

2 years or more, but less than 5 years 18 days

5 years or more 22 days

Employees also have the right to 60 days of medical leave if they are
hospitalised. However, this 60-day eligibility will be reduced to follow
the number of standard medical leave that has already been utilised. For
example, if an employee who is hospitalised has taken 10 days of medical
leave earlier, then his right to medical leave due to hospitalisation is only
50 days.

Find out online what actions can be taken against employees who often take sick
leave and emergency leave which exceed the limit.

EXERCISE 2.1

1. When do wages need to be paid by employers to their employees?

2. How long a period must a resignation/end of contract of service

notice be given if an employee has served for 2 years and 5 months?

3. If an employee experiences a critical illness that requires

hospitalisation, how many medical leave is he or she entitled to
under the Employment Act 1955?

4. Can a contract of service put any conditions on how employees

should spend their earnings? Explain.

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2.3 INDUSTRIAL RELATIONS ACT 1967

(REVISED 1976)

The Industrial Relations Act 1967 is an Act that emphasises employer-

employee relations and their trade union.

This Act is intended to prevent any differences or disputes that arise from this
relationship, as well as to deal with any trade disputes and related matters. The
purpose is to creat industrial harmony. Among the aspects covered in the Act
include protection for all parties, recognition, and trade union scope, and collective
bargaining and agreements. Figure 2.3 shows the items contained in the Industrial
Relations Act 1967.

Figure 2.3: Industrial Relations Act 1967

2.3.1 Protection of Rights of Workmen, Employers

and Trade Unions
Employees or employers cannot be forced or stopped from being involved in trade
union activities. Furthermore, the management is prohibited from setting any
conditions in the contract of service that is intended to prevent employees from
being involved in any trade union activities. However, employees who plan to join
any activities related to the union must first present a written application to their
employers to obtain approval for leave.

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2.3.2 Recognition and Scope of Representation of

Trade Unions
Trade unions that plan to represent employees must present an application of
recognition to the organisation. After receiving the application, the management
must take these actions in the period of 21 days:

 give recognition;

 reject the application and present the reasons in writing; or

 upon recognition, the employer or trade union of employers should notify the
Director-General.

If a certain trade union representing an employee has been given recognition, then
other unions intending to represent the particular employee are not allowed to
make any recognition claims except if:

 the trade union withdraws and the Director-General is notified; and

 the minister decides not to accord recognition.

2.3.3 Collective Bargaining and Agreements

After receiving recognition from the management, the trade union can invite the
management to hold collective bargaining in writing together with proposals for
a collective agreement. The management has to reply in writing within 14 days of
receipt of the invitation. Next, collective bargaining needs to be held within 30 days
of receipt of the reply accepting the invitation.

EXERCISE 2.2

1. State the actions that need to be taken by employers after receiving

an application for recognition from a workersÊ union planning to
represent their employees.

2. What is the time period allocated, under the Industrial Relations Act
1967, for the management to reply to a request from workers to set
up a trade union in the company?

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2.4 TRADE UNIONS ACT 1959

The right to form an association is a right guaranteed by Article 10 of the

Federal Constitution and this is also emphasised in both the Employment
Act 1955 and the Industrial Relations Act 1967.

Bound under the category of Employment Relations, this Act governs the
registration of a trade union. Any newly formed trade union is required to
apply for registration within a month of its formation.

The Act covers membership criteria and the rights, powers, and
responsibilities of a trade union and its managerial prerogatives for any
collective bargaining.

The purpose of the Trade Unions Act 1959 is to:

 encourage industrial relations, amend work terms, improve social and

economic status, and increase productivity;

 underline the relationship between employees and employers;

 represent employees or employers in any trade disputes;

 promote or organise any legitimate industrial-related issues; and

 plan and support any actions such as industrial strike.

A trade union must be registered within 1 month of its establishment date.

However, a period of registration of not more than 6 months is allowed if it is
deemed appropriate.

Among the membership conditions which are allocated in this Act are as follows:

(a) Anyone planning to be a member of a union must be above 16 years old.

(b) Members under 18 years old are not eligible to vote in these matters:

 organising strikes;

 dissolving the union; and

 amendments concerning member liabilities and benefits.

(c) Members under 21 years old are not allowed to hold any post in the union.

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EXERCISE 2.3

TRUE (T) or FALSE (F) Statements

1. Anyone above 16 years old can join a trade union.

2. Those under the age of 18 have limited participation in union

activities.

3. Those above 18 years old can be officers in a workersÊ union.

4. The management has the right to stop its employees from joining
workersÊ union activities.

2.5 OCCUPATIONAL SAFETY AND HEALTH

ACT 1994
The Occupational Safety and Health Act (OSHA) 1994 was enforced throughout
Malaysia for all industries except the armed forces and shipping related
employments which are protected under the Merchant Shipping Ordinance 1952
and the Merchant Shipping Ordinance 1960 for Sabah and Sarawak.

Among the objectives of this Act are to:

 ensure the safety, health, and welfare of employees at the workplace;

 protect others who are present at the workplace from any accidents that might
be triggered by workersÊ activities;

 ensure that the work environment is conducive; and

 enable related legalities be replaced in stages by industrial rules and

regulations which are approved and practised by all in order to maintain and
increase the standard of safety and health at the workplace.

This Act requires the management to establish a safety and health committee if it
has 40 or more employees in the workplace or if directed by the Director-General.

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Under OSHA 1994, employers must comply with the following:

 Ensure the safety of employees at the workplace;

 Draft and disseminate a safety policy;

 If an organisation has more than 40 staff, it is required to appoint a safety

committee;

 Appoint a dedicated safety and health officer (under scope of relevant

regulation);

 Provide training, supervision, and information on safe work practices; and

 Report serious accidents to the Department of Occupational Safety and Health.

Further discussion of OSHA 1994 will be provided in Topic 11.

Visit http://www.dosh.gov.my for information on the rules listed in OSHA 1994.

EXERCISE 2.4

1. State the objectives of OSHA 1994.

2. What are the employersÊ requirements for a safety and health

committee at the workplace as stipulated under OSHA 1994?

2.6 EMPLOYEES’ SOCIAL SECURITY ACT 1969

The Social Security Organisation (SOCSO) is an organisation set up to administer,
enforce, and implement the EmployeesÊ Social Security Act 1969 and the
EmployeesÊ Social Security (General) Regulations 1971.

SOCSO is known in Malay as Pertubuhan Keselamatan Sosial (PERKESO).

Initially, it was a government department which was converted into a statutory
body in 1985.

The Social Security Scheme aims to protect employees from unexpected

occurrences such as disasters, accidents, and death at the workplace. This scheme
ensures that benefits are paid to employees and their dependants through two
protection schemes as shown in Figure 2.4.

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Figure 2.4: EmployeesÊ Social Security Act 1969 Protection Scheme

(a) Employment Injury Insurance Scheme

This scheme protects employees from disasters at work including industrial
accidents, accidents that occur during business-related travels, and service
illnesses, which are illnesses caused by employment. Under this scheme,
only employers are required to make monthly contributions to every
employee with the rate of 1.25% of their monthly salaries.

(b) Invalidity Pension Scheme

This scheme gives 24-hour protection to employees against accidents or
fatalities without considering the cause. The management must contribute
0.5% of the employeeÊs salary, and the employee must also contribute 0.5%
of his or her salary.

Information about contribution to SOSCO is as follows:

(a) An employee employed under a contract of service or apprenticeship and

earning a monthly wage of RM3,000 and below must compulsorily register
and contribute to SOCSO regardless of whether the employment status is
permanent, temporary or casual in nature.

(b) An employee must be registered with the SOCSO irrespective of age.

(c) SOCSO only covers Malaysian workers and permanent residents. Foreign
workers are protected under the WorkmenÊs Compensation Act 1952.

(d) SOCSO does not cover the following categories of individuals:

 a person whose wages exceed RM3,000 a month and has never been
covered before

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 government employees

 domestic servants employed to work in a private dwelling which

includes chefs, gardeners, house servants, watchmen, washerwomen,
and drivers

 employees who have attained the age of 55 only for purposes of

invalidity but if they continue to work, they should be covered under the
Employment Injury Insurance Scheme

 self-employed persons

 foreign workers

EXERCISE 2.5

1. The Social Security Act 1969 protects all employees who are
employed under one contract of service with a salary of not more
than RM___________.

2. The amount of contribution that needs to be made by both the

employer and the employee under the Invalidity Pension Scheme
is _____________.

2.7 HUMAN RESOURCE DEVELOPMENT

ACT 2001

This Act aims to increase employee training by imposing and collecting

human resource development levies, apart from establishing Human
Resource Development Councils and Human Resource Development Funds
for this purpose.

Every employer registered with the Human Resource Development Council has
to pay a human resource development levy for every employee based on their
wages. Registered employers that have made the payment are entitled to apply for
financial aid or the services allocated in this Act for the purpose of encouraging
employee training. Table 2.6 shows the levy rate imposed according to the set
criteria in the Human Resource Development Act 2001.

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Table 2.6: Levy Rate According to Sector

Levy Rate Based

Criteria
on Employee Fee

Manufacturing sector with 50 or more employees 1%

Manufacturing sector with employees more than 10 and not

exceeding 50 employees with a paid-up capital of RM2.5 million and 0.5%
above

Service sectors with 10 or more employees 1%

Under this Act, the Human Resource Development Fund must be spent on:

 encouraging development and growth of employeesÊ skills by designing,

developing, increasing or monitoring training amenities;

 preparing financial aid through loans or subsidies to employers to train or re-

train their employees;

 organising or implementing activities or programmes aimed at re-training

employees who have been or will be laid off due to downsizing;

 bearing the cost of managing the Human Resource Development Council

including payment and allowances for council officers; and

 bearing any administration costs for the Fund as well as the cost of
implementing the Act.

Apart from that, the Human Resource Development Act 2001 also allots aspects
on the functions of the Human Resource Development Council:

 evaluates and determines the types or levels of training that are in line with the
industryÊs human resource needs;

 increases manpower training; and

 establishes the conditions for loans or financial aid.

Visit http://www.hrdcorp.gov.my to obtain information on the roles of the

Human Resource Development Corporation.

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EXERCISE 2.6

1. Describe the purposes of the Human Resource Development Fund

under the Human Resource Development Act 2003.

2. State the functions of the Human Resource Development Council as

set under the Human Resource Development Act 2003.

2.8 EMPLOYEES PROVIDENT FUND ACT 1991

(AMENDMENT 2006)
The Employees Provident Fund (EPF), also known as Kumpulan Wang Simpanan
Pekerja (KWSP), is a government organisation in charge of social security or
retirement planning for legally employed workers in Malaysia.

All employers must register their employees with the Employees Provident Fund
immediately upon employment.

The Employees Provident Fund (EPF) is aimed at encouraging employee

savings for the purpose of retirement.

Figure 2.5 shows the EPF contribution rate.

Figure 2.5: EPF Mandatory Contribution Rates

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The contribution rate allocated under this Act is based on the following:

 A worker aged less than 60 years: Full contribution is 24% (13% employers,
11% employee) for employees paid RM 5,000 and below. It is 23%
(12% employees and 11%) for employees paid exceeding RM 5,000 a month.

 A worker aged 60 and above up to 75 years: The contribution rate is 50% of the
statutory contribution of workers aged under 60 years in the amount of wages.

Effective from 1 January 2007, the contributorÊs account is divided into

two types: Account 1 and Account 2. All contributions are divided into the
two accounts according to fixed percentages, namely, 70% into Account 1 and 30%
into Account 2.

These accounts are created for different purposes and different types of
withdrawals are applicable for each account:

(a) Account 1
The savings here are for the purposes of retirement and cannot be fully
withdrawn before an employee reaches the age of 55 or passes away, or loses
capacity and intends to leave Malaysia permanently.

(b) Account 2
The savings in this account are meant to help employees to make early
preparations for a comfortable retirement. Withdrawals are allowed if they:

 attain the age of 50 years;

 are owning a house or making the down payment for a first house;

 settling the balance of their housing loan for their first house;

 financing education for themselves and their children; and

 paying medical expenses for themselves and their children.

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ACTIVITY 2.5

Visit http://www.kwsp.gov.my to answer these questions:

(a) How much can be withdrawn from Account 2 to pay for a house?

(b) What actions can be taken by an employee if the management does

not make any EPF contribution?

EXERCISE 2.7

According to the Employees Provident Fund Act 1991, membersÊ

accounts are divided into two different accounts with different
percentages. State the percentages from the total contribution allocated
to each account and explain the purposes of each account.

2.9 WORKMEN’S COMPENSATION ACT 1952

This Act is aimed at compensating employees who are injured or contract

illnesses caused by their work.

In the early stages, this Act covered all manual workers in the private sector and
non-manual workers in the private sector with a salary of not more than RM500 a
month. In 1977, the scope of the Act was extended to include non-manual workers
in the public sector with a salary of not more than RM400 a month.

The next amendment was made in 1993 when it gave protection to all foreign
workers in the private sector, whereas all local workers in the private sector were
covered under the EmployeesÊ Social Security Act 1969. However, in 1996, this Act
was amended so that it only gives protection to non-manual workers in the public
sector with a salary of not more than RM400, while foreign workers are protected
under the Foreign Workers Compensation Scheme 1952.

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EXERCISE 2.8

Fill in the Blanks

To test your knowledge of the legal environment in human resource
management, answer the questions below.
1. Halim has worked with CBA Company for 4 years. Therefore, the
number of annual leave he is eligible for under the Employment
Act 1955 is ___________ days.
2. Employers are prohibited from asking or demanding that an
employee work more than ___________ hours a week.

Multiple Choice Questions

1. Below are the items contained in the Employment Act 1955
EXCEPT ___________.
A. hours of work
B. annual leave
C. procedure of settling dissatisfaction
D. payment of fee
2. Below are statements of hours of work alloted for an employee
under the Work Act 1955 EXCEPT _____________.
A. working not more than 8 hours in a day
B. employees must be given a rest period of at least 45 minutes
C. working not more than 5 hours without rest
D. working not more than 48 hours in a week
3. MembersÊ accounts are divided into two accounts under the
Employees Provident Fund Act 1991. Account 1 can be withdrawn
when the member is _____________.
A. settling a loan
B. purchasing a house
C. handicapped and can no longer work
D. settling medical expenses
4. The purpose of establishing the Human Resource Development
Fund is to _______________.
A. develop employeesÊ skills through training
B. prepare start-up business loans for employers
C. implement financial crisis reinstallation activities or projects
for an organisation
D. pay all organisational expenses to acquire business from its
competitors

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46  TOPIC 2 LEGAL ENVIRONMENT

5. Which of these is NOT TRUE regarding female employees under

the Employment Act 1955?
A. Female employees have the right to 60 days of consecutive
maternity leave.
B. Female employees are not allowed to work between 10pm
and 5am.
C. Female employees are only allowed to perform light jobs that
do not include handling machineries.
D. Female employees are eligible to maternity allowance if they
inform the management 4 months before the due date.

6. Below are the functions of the Human Resource Development

Council EXCEPT:
A. Deciding on the conditions in giving aid and financial loans
B. Increasing manpower training
C. Evaluating and determining the types of training that are
suitable for industrial needs
D. Helping an organisation solve employeesÊ disciplinary
problems

Essay Questions

1. Amin has worked in Syarikat Teguh for 5 years. He was admitted

to the hospital for 60 days due to a road accident. How many days
of standard medical leave can he take after the accident in that
particular year?

2. State four public holidays that have been set and be made
compulsory in the calendar year.

3. What are the types of leave specified in the Employment Act 1955?

4. Are all employers and employees required to contribute to SOCSO?

Explain.

5. Elaborate briefly on the types of schemes introduced under the

EmployeesÊ Social Security Act 1969.

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 TOPIC 2 LEGAL ENVIRONMENT  47

Ć Overall, it is clear that legal systems influence work relations formed between
employers and employees.

Ć The Industrial Relations Act 1967, which has been discussed in this topic,
should be able to give you a more comprehensive picture about the importance
of having a systematic and organised human resource management system.

Ć This can ensure a harmonious working relationship between employers and

employees.

Ć In addition, this can help an organisation reach competitive advantage in the

local and global markets.

Contract of service Maternity allowance

EmployeesÊ Social Security Act 1969 Normal hours of work
Employer-employee relations Occupational Safety and Health Act
1994
Employment Act 1955
Payment of wages
Human Resource Development Act
1992 Recruitment of women
Industrial Relations Act 1967 Trade Unions Act 1959
Leave WorkmenÊs Compensation Act 1952

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