EMPLOYMENT AND INDUSTRIAL LAW

JANUARY 2018

BBUI 3103

THE EMPLOYMENT LAWS THROUGH LEGISLATIONS AND SUBSIDIARY

LEGISLATIONS

LECTURER : DAYANG SITI NURBANI BT HJ AWANG MORSHIDI

NAME : MUHAMMAD NORMIZI BIN GHAZALLI

STUDENT ID : 730623035223001

NRIC/Passport No : 730923-03-5223

TELEFONE : 013-9280073

E-MAIL : [email protected]

LEARNING CENTRE : KOTA BHARU

CONTENTS PAGE

1.0 INTRODUCTION 1

2.0 CHARACTERISTICS OF CONTRACT OF SERVICE,

CONTRACT FOR SERVICES AND THE EXTENT THESE
CONTRACTS ARE APPLICABLE IN THE SELECTED
ORGANISZATION 2

3.0 DISCUSS ON TWO PECUNIARY TERMS AND TWO

NON-PECUNIARY TERIMS RESPECTIVELY OF THE
SELECTED CONTRACT OF SERVICE 4

4.0 EVALUATION ON COMPLIANCE OF PECUNIARY

TERMS AND NON-PECUNIARY TERMS TO THE
RELEVANT STATUTES 8

5.0 RECOMMENDATION ON AMMENDMENT OF

EXISTING LAWS REGARDING BOTH PECUNIARY
AND NON-PECUNIARY TERMS 9

6.0 SUMMARY-SUMMARISE ALL THE KEYPOINTS 10

7.0 REFERENCES 11
1.0 INTRODUCTION

ORGANISATION BACKGROUND

Organisation’s name that I have easy access to discuss on this topic more detail is Pharmacy
Rimadex (Wakaf CheYeh) Sdn. Bhd. ( Company Number 652065 – P ) which is a pharmacy that
began their operation in 12.05.2004. This pharmacy’s type of business is dealers in all kinds of
pharmaceutical products, drugs, medicines, toiletries and sundries. Also it can be found at PT
130, Kompleks NiagaWakaf CheYeh, Mukim Padang Enggang, 15100 Kota Bharu, Kelantan.
Pharmacy Rimadex have a few other branches in Kelantan which owned by a few person that
share the profit together.

Pharmacy Rimadex has 6 employee which is salesperson that have to do task regarding direct
contact with customers, promote the goods and respect customer issues. Secondly, a cashierthat
recorded all sales activities in a computer or money machine, ensure no surplus or shortage of
money when closing the store and as well as write all the information in the appropriate
notebook. Thirdly, merchandiser that have to ensures that items are displayed on the shelves in
an orderly and adequate manner. Other than that, an employee that have the job of stock
monitoring which is always checking the expiry of the item on the shelf, listed items that have an
expiration date of less than 6 months, writes consumables and items that need to be reordered
and inform the company's administration and talking the name of the customer requested by the
customer who is not in stock of the company stock and to inform the management.

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2.0 CHARACTERISTICS OF CONTRACT OF SERVICE, CONTRACT FOR
SERVICES AND THE EXTENT THESE CONTRACTS ARE APPLICABLE IN THE
SELECTED ORGANISZATION

Contract of service, which is an employment contract, a contract for service is a commercial

contract. As contrast to a contract of service is when an independent self-employed man provides
his skills, tools and human resources to independently without supervision to undertake and
complete a specific job for another. There is a marked distinction between a contract for service
and a contract of service where a person who is actively employed by another for a specific
salary or wage in consideration of performing specific job is said to be under a contract of
service. Whereas a person who is self-employed or a self-employed person who offers or
provides services in consideration for fees or service charge is said to be under a contract for
service. He acts as a freelance vendor not for a single recipient client / customer but for multiple
recipient clients / customers.

Sir Otto Kahn-Freund, a professor of comparative law, defines a contract of service as the
relation between an employer and an isolated employee is typically a relation between a bearer
of power and one who is not a bearer of power. In its inception it is an act of submission, in its
operation it is a condition of subordination, however much the submission and the subordination
may be concealed by the indispensable figment of the legal mind known as the contract of
employment.

The distinguishing tests Section 2(1) of the (EA 1955) gives a vague or rather a shallow
definition and different of a contract of service and a contract for service. Contract of service
means any agreement, whether in oral or in writing and whether express or implied, whereby one
person agrees to employ another as their employee and that other agrees to serve his employer as
an employee and includes an apprenticeship contract or contractor means any person who
contracts with a principal to carry out the whole or any part of any work undertaken by the
principal in the course of or for the purposes of the principal's trade or business.

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In the case of Younis v Trans Global Projects, Mr. Younis was engaged as a consultant for the
company’s business development. There was a mutual agreement between them that the
company would provide the business leads and thereafter he would work on these provided leads
to establish the necessary business links and developments for the company and in consideration
of his business development services, the company paid a daily rate of payment for each day
worked, including that of covering the disbursement expended during his regular work and a
specified bonus sum on business deals he secured. Two years later the company terminated his
engagement and Mr. Younis filed a claim against the company for unfair dismissal and a breach
of his contract of employment.

The first instant employment tribunal ruled interalia that this case failed the test of Mutuality of
Obligation between the contending parties and therefore Mr. Younis was merely engaged under a
contract for services. In the premises, the company was not obliged to provide Mr. Younis any
business leads continuously and neither was he obliged to complete any follow up business leads
given by the company. However, on appeal, the employment appeal tribunal (EAT) ruled that
mutuality of obligation between the two parties did exist; the EAT said the question is whether
the employer is under an obligation to provide work and the worker to do it, when offered.

The appeals tribunal in answering the foregoing question in the affirmative added that Mr.
Younis was indeed under an obligation to bring in his business contacts to the company and the
company was under an obligation to work on these business contacts. Nevertheless, the EAT
concluded, although the case satisfied the mutuality of obligation test, it did not satisfy the
Control Test, that is, the required level of control exercised by the employer over Mr. Younis to
make this engagement a contract of service. The Control Test In days yonder, an employer
exercises a great degree of control over his employee to teach, guide and closely scrutinize how,
when and to what extent the given job has to be performed. However, this archaic method may
not be applicable in today’s advance society where it is not uncommon to find the majority of
employees highly skilled and specialized in their respective area of expertise placing these in
positions to advise and guide their own superiors and employers. And many employers have
drunk bitter waters when they defied advices and guidance given by their own skilled employees.
But nevertheless this is still relevant to establish distinguishing elements between the two types
of contracts. 3
3.0 DISCUSS ON TWO PECUNIARY TERMS AND TWO NON-PECUNIARY
TERIMS RESPECTIVELY OF THE SELECTED CONTRACT OF SERVICE

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 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 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, retirement, resignation benefits, maternity benefits, medical benefits and insurance
benefits.

Section 24(1) AK 1955 regarding payroll deduction 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) which is
deductions from salary to the extent that any payment is made for error employer within three
months earlier, deduction for the indemnity to be paid by the employee to the employer
underSection 13(1), deduction for recovery of salary advances of wages made under Section 22
with no interest charged, the deduction allowed by law to another. Section 24(3) lists the
deductions have to be made only with prior written request from the employee. Some pay cuts
are deduction in respect of salary payments to a registered trade union or society, and loan
association for any fee, instalmentand fardah or other debt, and deduction in respect of any
payment for any shares in the employer's business offered to employees.

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Section 24 (4) stated that the deductions that cannot be made unless upon written request of the
employee, together with the written permission of the Director General. Deductions for payment
of pension, provident funds, employee welfare schemes, insurance schemes and other payments
for employee benefits, any deduction for the repayment of advances of wages made to
employees under Section 22, which bears interest for any deduction in respect of the payment to
a third party on behalf of employees, any deduction for goods business of the employer, any
deduction in respect of rental payments, 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 PharmcyRimadexdeduct 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.

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.

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Pharmacy Rimadexalso provides bonuses to its employees depending on the profit earned by
thepharmacy. If the pharmacy 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.

Terms not pecuniary in an employment contract will cover the following matters of period of
work, overtime, day of rest, public holidays, annual leave and sick leave and 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 (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.

For duration Of work in 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 which is 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).

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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 SdnBhd 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 thesituation or the type of work.

Based on the provision of the Act, the Pharmacy Rimadex has set working hours for all
employees to start from 9.00 am to 10.00 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. 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.

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4.0 EVALUATION ON COMPLIANCE OF PECUNIARY TERMS AND NON-
PECUNIARY TERMS TO THE RELEVANT STATUTES

The law assumes that those under a contract of services are in a weaker position as compare to
those under a contract for services, and therefore they are not capable of protecting their rights
since those under a contract of service do not stand in equal footing with those employing them.
Whereas the law assumes that those under a contract for service stand in equal footing with their
clients or customers, hence the law says that those under a contract for service are capable of
protecting their own rights. There are certain law recover some right for contract of services and
contract for services which the government should always amend or make a new law to protect
the right of all employers and employees in Malaysia.

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5.0 RECOMMENDATION ON AMMENDMENT OF EXISTING LAWS
REGARDING BOTH PECUNIARY AND NON-PECUNIARY TERMS

Recommendation on amendment of existing laws on Pecuniary Term regarding wages and

salaries.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 salaries may be paid by the week for an example 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.

Recommendation on amendment of existing laws on not pecuniary regarding 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.

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6.0 SUMMARY-SUMMARISE ALL THE KEYPOINTS

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 areable 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.

When surveying Pharmacy Rimadex, i 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.

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7.0 REFERENCES

Assoc Prof DrAsmahLailiYeoh, CheThalbiMd Ismail, Khadijah Mohamed danAsiahBidin

(2008), Employment and Industrial Law,Meteor Doc. SdnBhd, Selangor.

SitiZaharahJamaluddin (1997) PengenalanKepadaAktaKerja, 1955 K. Lumpur, Universiti

Malaya

MaimunahAminuddin (1999)Malaysian Industrial Relations and Employment Law

https://www.slideshare.net/xareejx/malaysian-legal-system-sources-of-law-subsidiary-legislation

https://www.legco.gov.hk/education/files/english/Factsheet/Factsheet6.pdf

https://www.pwc.com/mt/en/publications/.../pwc_empreg.pdf

www.justiceservices.gov.mt/DownloadDocument.aspx
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