FACULTY OF BUSINESS AND MANAGEMENT

SEPTEMBER 2011

BBUI3103

EMPLOYMENT AND INDUSTRIAL LAW (BBUI3103)

NO. MATRIKULASI : RF151979001

NO. KAD PENGNEALAN : RF/ 151979

NO. TELEFON : 016-8264979

E-MEL : kannnan@oum.edu.my

PUSAT PEMBELAJARAN : SANDAKAN

 BBUI3103

TABLE OF CONTENTS

CONTENT PAGE

1. INTRODUCTION 3
1.1. COMPANY’S PROFILE 3
1.2 COMPANY’S SERVICES 3

2. TERMS PECUNIARY 4

3. TERMS NON PECUNIARY 7

4. RECOMMENDATIONS TO IMPROVE THE

CONDITIONS BOTH TERMS OF PECUNIARY 11

4. CONCLUSION 13
REFERENCES 14

2
 BBUI3103

1. INTRODUCTION

1.1. Company Profile

Teganu Indah Batik Sdn.Bhd is a company registered for the sale and supply of Ready
Clothing Batik Silk, chiffon, songket, Side, Accessories, Blouse, Shawls, Natural Baju,
Batik Kebaya, Batik Clothing Official and many more.

The company was founded on 27 July 2006 at Karamunsing Complex, Kota Kinabalu,
Sabah. Teganu Indah Batik have branches and batik factory in Kuala Lumpur and the
company is owned by a 100% Bumiputera founded by Mrs. Yoshi.

Teganu Indah Batik shirts also provide the private and government bodies throughout the
state Sabah and batik clothing orders from various groups.

1.2. Services

Services or goods provided by Teganu Indah Batik as follows;

 Batik clothing wholesale and retail.

 Batik clothing orders to government departments, corporate bodies, private
individuals, organizations and schools.
 Batik clothing orders for parties or formal events.
 Receive order as a tailor men's and a woman’s clothes.
 Batik pattern design and fashion.

3
 BBUI3103

2. PECUNIARY TERMS

Employment Act, 1955 (AK1955) provides the minimum rights that must be provided by the
employer to the employee. If the provision of the employment contract is less than what is
provided by AK 1955, Section 7 will apply. One of the real terms in the contract is the terms
pecuniary, the terms of the financial affairs. It includes wages and salaries, allowances,
bonuses and ex-gratia payments and benefits pecuniary. Terms in respect of wages and
allowances will usually be stated clearly in the service contract. Pecuniary benefits will
consist of the termination of benefits, retirement or removal of benefits, termination benefits
of mass employment layoffs, retirement, resignation benefits, maternity benefits, medical
benefits and insurance benefits.

2.1. Payroll deductions

Section 24(1) AK 1955 states that employers are not allowed to make any deduction of
the salaries of its employees, except those provided by the Act only, The conditions of
the salary deduction made in accordance with the Act under Section 24(2) is the
following;

a) Deductions from salary to the extent that any payment is made for errors
employer within three months earlier.
b) deduction for the indemnity to be paid by the employee to the employer under
Section 13(1)
c) Deduction for recovery of salary advances of wages made under Section 22 with
no interest charged
d) The deduction allowed by law to another.

Section 24(3) lists the deductions to be made only with prior written request from the
employee. Some pay cuts are:

a) Deduction in respect of salary payments to a registered trade union or society,

and loan association for any fee, instalment and fardah or other debt, and
b) Deduction in respect of any payment for any shares in the employer's business
offered to employees.

4
 BBUI3103

Section 24 (4) stipulates that the deductions that cannot be made except upon written
request of the employee, together with the written permission of the Director General.
Deductions are:

a) any deduction for payment of pension, provident funds, employee welfare

schemes, insurance schemes and other payments for employee benefits
b) any deduction for the repayment of advances of wages made to employees
under Section 22, which bears interest
c) any deduction in respect of the payment to a third party on behalf of
employees
d) any deduction for goods business of the employer
e) Any deduction in respect of rental payments and cost of accommodation
services, food and drinks provided by the employer to the employee at the
request of the employee, or under the terms of service.

The Director General will only allow a deduction under Section 24 (4) (e) if he is
satisfied that the provision of accommodation, service, food / drink is for the benefit
of employees (Section 24 (5). However, Section 24 (7) has jurisdiction of the Director
General to disallow any deduction for wages, at the request of the employer, subject
to certain conditions as it thinks fit. In addition to the matters under Section 24 (9), the
total deduction will be not more than fifty percent of the wages earned by employees
during the month (Section 24 (8)).

In accordance with the provisions of the Act, the Teganu Indah Batik Company
deduct all workers' wages to EPF is to ensure the future of the workers at the rate per
set. Employers also are charged EPF for employees. Because this company did not
release specific salary slips, no certain deductions made by employers. Employees
only receive a total salary after deducting EPF. All savings and debt payments made
by the employee.

I strongly agree in respect of each wage cuts made after obtaining consent from the
employee with a letter of application to make deductions. This step can prevent abuse
from happening to workers. EPF deduction is also an effective measure to ensure the
future of the workers.

5
 BBUI3103

2.2. Bonus

A provision relating to the bonus is not specified in the contract of employment. This is
because the bonus is the right employer. Employers have the right to include a
provision on this matter, or otherwise. However, many awards were given in relation to
the bonus question. According to the Oxford Dictionary, the bonus is defined as "a
reward to employees other than salary." In other words, not a duty upon employers to
provide bonuses to its employees, but it can be given as an incentive for services
rendered by employees. Most of the questions raised in the court was whether the bonus
must be provided or otherwise.

In the case of Malaya States of Insurance Association and the National Union of
Commercial Workers (Award 157/1980), the court ruled that the bonus is not required
is the payment is uncertain. It is only paid when the employer that profitable.

Type of bonus is contractual bonus is considered mandatory. This means that this bonus
has been specified in the contract of service as a compulsory payment made by the
employer, other than salary. Time and manner of payment usually have been
determined in the agreement. That amount was also determined. It will still be paid
whether the employer derives profit or otherwise. The employer also can state that a
change in form and amount of the bonus should be changed from time to time. This
depends on the economic situation that is sometimes brilliant and sometimes not very
satisfactory.

Teganu Indah Batik Company also provides bonuses to its employees depending on
the profit earned by the company. If the company reaches a considerable profit, then the
bonus amount will be increased. Normally, bonuses are awarded at the end of the year.
The bonus payment, a bit of a drive and can improve the spirit of the workers to work
better. The bonus is also able to guarantee the lives of workers as well as to meet the
shortage of labour income.

In my opinion, this bonus is very effective in improving the quality of their

performance in improving their productivity. This will help the company improve a
company's profit.

(Kamal Halili Hassan (1994) Relations Law Employers and Employees. London.
Oxford University Press.)

6
 BBUI3103

3. TERMS OF NON PECUNIARY

Terms not pecuniary in an employment contract will cover the following matters:

1. Period of work
2. Overtime
3. Day of rest
4. public holidays, annual leave and sick leave
5. Other Benefits

The law of the period of work, rest days, public holidays, annual leave, sick leave and
maternity leave provided for in Part XII of the Employment Act, 1955 (AK 1955). Leave
about managing the affairs of Trade Unions has been provided by the Industrial Relations Act
1967 (APP 1967) Benefits other than those specified in the act, many determined by the
Industrial Court to take into account the current situation.

(Comments Zaharah Cho (1997) Introduction to Work Act, 1955 K. Lumpur, Universiti
Malaya)

3.1. Duration Of Work

Employment Act, 1955 has set a maximum period of work for an employee. Section 60 A (1)
provides that a period of work shall not be required under his contract of service work:

 More than five consecutive hours without a plenty of not less than 30 minutes
duration.
 More than eight hours a day
 More than ten hours a day
 More than 48 hours per week

However, the employer may require employees to work for eight consecutive hours for work
involving continuous attention. The requirement here is that employers have to give a rest
period of not less than 45 minutes so that it has a chance to eat. To do so, too, must have the
prior agreement between the employee and employer, which allows employees required to
work eight hours on one day, but less than eight hours on other days of the week. However,
no employee may be compelled to work more than nine hours per day or forty eight hours in
one week. All these provisions are contained on Section 60A (1) (i), (ii) and (iii).

7
 BBUI3103

Employers are also allowed to increase the working time in excess of ordinary working
hours, but no more than the limit prescribed in Section 60A (1) (a), (b) and (c), provided the
written permission of the Director General, after stating neutral conditions that require more
work time than the normal working time. This is set out in Section 60 A (1A). The Director
General may at any time revoke this approval.

Directed employees to work more than the period in question will be considered as 'overtime'.
Section 60A (3) (a) states that overtime work performed in excess of normal working hours
of employees, shall be paid not less than 1 ½ times the rate per hour.

For example, in cases of Sun Mix Concrete Sdn Bhd and Non Metallic Mineral Products
Manufacturing Employees Union (Award 115/1987), the court has recognized the
management of the employer to determine or modify the work. However, this power is
subject to the law to be according to what exists in the act and in accordance with the
situation or the type of work.

Based on the provision of the Act, the Teganu Indah Batik Company has set working hours
for all employees is to start from 8.30 am to 5.00 pm. Each employee is given time off for an
hour for lunch on a rotation that will start at 12:00 noon to 2:00 pm. After 5.00 pm, no
overtime incurred. With properly working hours, it will not burden the employees while
employees have adequate rest periods. This action will affect the performance of some
employees, especially working with full energy and attention. Rest periods in turn also makes
a job is not interrupted and continues to run and under the surveillance of workers. Based on
the provision of the Act, the Teganu Indah Batik Company has fixed working hours for all
employees is to start from 8.30 am to 5.00 pm. Each employee is given time off for an hour
for lunch on a rotation that will start at 12:00 noon to 2:00 pm. After 5.00 pm, no overtime
incurred. With properly working hours, it will not burden the employees while employees
have adequate rest periods. This action will affect the performance of some employees,
especially working with full energy and attention. Rest periods in turn also makes a job is not
interrupted and continues to run and under the surveillance of workers.

I strongly agree with what has been provided in the Act to work period. This is because the
existence of this act, employers are not just arbitrary to persecute the poor people to work
with regardless of the actual time worked. This measure also would create jobs and ensure the
effectiveness of worker safety.

8
 BBUI3103

3.2. Day Of Rest

Provision of rest days is contained in Part XII of the Employment Act, 1955. Section 59 (1)
states that each be allowed one rest day per week full day as may be prescribed from time to
time by the employer, and if an employee is allowed more than one rest day in a week, then
break the last day of the days the rest should be a rest day for the purposes of this section.

For employees who do not have regular rest days, Section 59 (2) states that employers must
provide a schedule to inform employees when their rest days, to allow employees to choose
whether to work or not. Any employer who violates this provision shall be guilty of an
offense under the Act (Section 59 (4).

This has been proved in the case V. Sundram. Veemah (1972) MLJ 83, which shows the
court, stated that Section 59 does not provide other options for employers, but set the rest of
the days specified in advance to employees, and provides a schedule of these holidays to be
displayed to the employee. This will facilitate the employees to plan and know-day holiday
which they are eligible analogue or overtime allowances.

Section 60 (1) states that in accordance with the provisions of Section 60A, shall any
employee be forced to work on rest days, unless it involves a kind of continuous or shift
work. Section 60 (3) (a) also provides that in the event of an employee required to work on
rest days and paid according to a daily wage, he shall be paid for any period of work:

a) Not more than half the normal working hours, he will get wages for a day’s wages at
ordinary rate of pay, or
b) More than half but not exceeding the normal working time, two days wages at
ordinary rate of pay.

Section 60 (3) (b) also provides for the wages of workers required to work on rest days and
paid in monthly wages. It shall be paid for any period of work:

a) Not more than half the normal working time, wages are equal to half the normal
working wage, or
b) More than half but not exceeding the normal working time, a day’s wages at ordinary
rate of pay.

Section 60 (3) (c) provides for the overtime work done on rest days. The employee shall be
paid at a rate not less than two times the rate of wages, by the hour. Section 60 (3) (d)

9
 BBUI3103

stipulates that, if the employee is employed and paid in proportion to follow the work, he
shall be paid double the wage rate which is usually for a job.

As provided for in the Act, the Teganu Indah Batik Company has set Friday was a rest day
for all employees. On that day, the premises did not operate. Teganu Indah Batik Company
also does not provide additional time after normal working hours on employees. All
employees should only work on normal working hours. So in the company, no problem to
pay overtime or ask employees to work on rest days. With this leave, all employees will not
feel stressed and have time to relax their body and mind after six working days, and it can
also restore the lost energy while working. This leave can provide employees an opportunity
to spend time with their families.

I agree with the act that has been made on this rest day. Employers must provide a rest day at
least one day a week to each employee. On that day, employees have the opportunity to rest
their bodies and minds of busy work. Without leave, may be able to threaten the performance
of the workers. Employers also need to consider the rights of other employees to obtain
profits. With this act, workers will feel happy about having their rights should they be.

(Maimunah Aminuddin (1999) Malaysian Industrial Relations Employment Law.McGraw

ang-Hill)

10
 BBUI3103

4. RECOMMENDATIONS TO IMPROVE THE CONDITIONS BOTH TERMS OF

PECUNIARY

4.1 Improvements on Pecuniary Term

 Wages and salaries
 Allocation of Wages
The Company is in compliance with the Act and provides that the payments of salaries of
the workers are in accordance with a period of months. Salaries are paid according to the
months of the calendar AD. However, the company can make improvements on the
wages and salaries as follows: -
 Salaries may be paid by the week- Employers may pay wages for a period of
less than one month. Employers can pay the salaries of employees by the
week. This condition does not violate the rules but it is for the benefit of their
workers.
 Just in time to pay salaries - Appropriate salary payments are paid every
month. This condition can be implemented using the direction of bank
charges. Reason for closing the bank employers on weekends is common to
delay the business of workers' salaries.

 Bonuses and ex-gratia

This is for the benefit and welfare of workers. Employees will be more motivated and
loyal to the company if given a bonus. Bonus is a form of appreciation to employees.
Bonuses may be given every 6 months or once a year minimum. Bonuses can be given
even a small amount and although not stated in the law that the bonus is mandatory
provisions to the workers. But it is a highly anticipated by employees. The bonus is a
motivation to employees. Employers should provide bonuses even though the amount is
large. It is a tribute to. Meanwhile, ex-gratia payments may be paid to employees in
conjunction with certain days such as ex-gratia payment on the employee's birthday or on
certain feast days.

11
 BBUI3103

4.2 Improvements Not pecuniary

a. Working Overtime

Accordingly the company provides for overtime to workers. This is a good sampler for
additional income workers. Advantages of overtime is indirectly preparing the work could
not be completed during normal working days. But it is not a condition for not completing
the work as usual on the normal working day.

b. Rest day

Company's compliance with the rest days in accordance with the specified employee,
however the company can provide a replacement vacation if the employee instructed
workers to work on vacation leave.

12
 BBUI3103

5. CONCLUSION

Today, with the growing awareness among the people is high, widespread media
exposure the courage and firmness of the government and non-governmental
organizations (NGOs) saw the fate of workers in this country increasingly championed.
Variety of policies, laws and acts enacted to ensure the rights and privileges of workers
are constantly defended. Each employee has their own special privileges and are able to
enjoy the pleasure, through the power received. Touching on the privileges acquired by
the workers, still many others who do not know to what extent workers in Malaysia get
the right defences.

The relationship between employees and employers are protected under the Employment
Act 1955 (Employment Act 1955). This Act generally covers and protects the rights of
workers in employment relationships. It provides the minimum benefits and workers'
rights, such as working time limit, the number of day’s annual leave and public holidays,
overtime minimum, the number of days sick leave, hospitalization, maternity leave, and
so on.

Each employee should learn and know the contents of this Act and does not hesitate to
remind your employer and if necessary take action against employers who fail to comply
with all the details contained in the laws and regulations that have been set.
Various acts have been enacted to protect the rights and privileges you as an employee.
However, many do not want to know about it. You need to know, easy to take advantage
of employers felt that employees do not know about their rights. Consequently, you will
be suppressed unnoticed. It became the responsibility to know your rights as an
employee.

Having made a survey of Teganu Indah Batik Company States, found the company has
fulfilled all stipulated in the act of workers and employers. All rules and agreements
contained in the contract workers, very clear that there is no violation of the act. Workers'
rights are taken into consideration and attention and the responsibility of the employer to
employees is satisfactory.

13
 BBUI3103

REFERENCES

Assoc Prof Dr Asmah Laili Yeoh, Che Thalbi Md Ismail, Khadijah Mohamed dan
Asiah Bidin (2008), Employment and Industrial Law,Meteor Doc. Sdn Bhd,
Selangor.

Siti Zaharah Jamaluddin (1997) Pengenalan Kepada Akta Kerja, 1955 K. Lumpur,
Universiti Malaya

Maimunah Aminuddin (1999)Malaysian Industrial Relations ang Employment

Law.McGraw-Hill

TEGANU INDAH BATIK COMPANY. [On-line], Retrieved on 13/10/2011,

available: http://www.teganuindahbatik.com/profil.php

Panduan pemberhentian pekerja. Undang-undang Buruh Sabah. . [On-line], Retrieved on

13/10/2011, available: http://www.mohr.my/pdf/panduan_pemberhentian.pdf

14