Littler Global Guide - Malaysia - Q1 2022

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

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Passing of the Employment (Amendment) Bill 2021

New Legislation Enacted

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On March 30, 2022, the Malaysian Parliament passed the Employment (Amendment) Bill 2021 (the Bill) which includes the following changes to the law: redefining an “apprentice contract” by limiting it to a minimum duration of six months and a maximum duration of 24 months; increasing paid maternity leave period from 60 to 98 days; allowing paternity leave of seven days; imposing the requirement on employers to obtain prior approval from Director General of Labor before employing a foreign employee; empowering the Director General of Labor to inquire into and decide matters relating to discrimination in employment; providing procedure for applications of flexible working arrangement by an employee and increasing the fine which the employer is liable to pay relating to sexual harassment complaints from RM10,000 to RM50,000. The Bill is not in force yet and is pending royal assent.

The scope of application of the Employment Act post its amendment is as yet unknown as the Ministerial Order that will define the scope has not yet been made public.

Ratification of ILO Protocol 29 – the Forced Labour Convention

New Order or Decree

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

Malaysia has formally ratified the ILO’s Protocol 29, a protocol to the Forced Labour Convention, on March 21, 2022. Once ratified, Malaysia shall take effective measures to prevent and eliminate forced labor, to provide the victims protection and access to appropriate and effective remedies such as compensation, and sanction perpetrators of forced or compulsory labor; develop a national policy and plan of action for the effective and sustained suppression of forced or compulsory labor.

“Transition to Endemic” Phase, Effective April 1, 2022

New Regulation or Official Guidance

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

Effective April 1, 2022, Malaysia will enter into the “Transition to Endemic” phase of COVID-19 with all restrictions on business operating hours removed. Limits on the number employees allowed in the workplace based on vaccination coverage is also abolished. However, the wearing of face masks in public places is still mandatory.

Minimum Wage Raised to RM 1,500, Effective May 1, 2022

New Regulation or Official Guidance

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On March 19, 2022, it was announced by the Prime Minister of Malaysia, that the national minimum wage will be revised to RM1,500 from the current minimum of RM1,200 with effect from May 1, 2022. However, there is confusion as to when the revised minimum wage will actually take effect and the covered employees within its scope. The Prime Minister and Human Resources Minister were cited as stating that the new minimum wage would only apply to companies with five or more employees and there may be certain sectors which are exempted from implementing the minimum wage for two years. No official confirmation is available as yet.

Trade Unions (Amendment) Bill 2022

Proposed Bill or Initiative

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

The Trade Unions (Amendment) Act 2022 (the Bill), tabled for first reading in the lower house of the Parliament, seeks to remove restrictions on registration of trade union based on certain establishments or similarities in trade, occupation, or industry. The Bill, if passed, will significantly limit the grounds on which the Director General of Trade Union (DGTU) may refuse registration or cancellation of registration of a trade union. The important grounds for refusing registration removed are where “any of the objects of the trade union is unlawful” or where “it is not in the interest of the workmen concerned that there be another trade union in respect of that particular establishment, trade, occupation or industry.” The Bill also proposes an obligation on the DGTU to provide reasons for refusal of registration of a trade union. In addition, the Bill seeks to remove the power of the DGTU to suspend a branch of a trade union.

In respect of strikes and lockouts, the Bill seeks to lower the minimum number of votes required to call for strikes and lockouts from two-thirds to one-half of at least 60% votes of the total number of union members who are entitled to vote and in whose respect the strike is called. However, the Bill proposes to double the amount of fine for organizing strikes or lockouts without first obtaining consent of its members through secret ballot.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.