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NAME: REWATHY A/P RAMEO

MATRICULATEION NO.: 750203025180001

I/C NO: 750203-02-5180

TEL: 012-4236706

E-MAIL: rewathy@oum.edu.my

LEARNING CENTRE: SEAMO RECSAM, PENANG

TUTOR: JASJIT KAUR

TABLE OF CONTENTS

1.0 INTRODUCTION 2

2.0 DESCRIPTION OF THE LEVELS OF NEEDS ANALYSIS IN HUMAN RESOURCE DEVELOPMENT. 3

2.1 Organizational Analysis 42.2 Task Analysis 42.3 Individual Analysis 5

3.0 SUGGESTION ON HOW TO IMPROVE THE NEEDS ANALYSIS FOR THE SELECTED ORGANIZATION 6

3.1 Need analysis in Smart Modular 63.2 The information needed to conduct an organizational analysis can be obtained from a 7variety of sources including: 73.4 Task analysis provides data about a job or a group of jobs and the knowledge, skills, 7attitudes and abilities needed to achieve optimum performance. 73.5 Results of the Needs Assessment 9

4.0 METHODS AND EVALUATION OF THE LEVELS AND THE METHODS USED IN NEEDS ANALYSIS IN SMART MODULAR 9

4.1 Questionnaires 94.4) Examining Documents 10

5.0 SUMMARY 11

5.0 REFERENCE 12

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1.0 Introduction

Terms and conditions of employment are the elements of a contract which help to define the relation between an employer and an employee. Information on conditions of employment, contracts of employment including fixed term, short term and temporary contracts, contractual change, probationary periods, notice periods and restrictive covenants can be found.

Definition of Term in a contract of service is the product of the decision reached between the employer and employee. It refers to contractual obligations that the parties have agreed to undertake. Definition of Condition is an instruction that is given by the employer to the employee from time to time

The conditions that an employer and employee agree upon for a job. Terms of employment include an employee's job responsibilities, work days, hours, breaks, dress code, vacation and sick days and pay. They also include benefits such as health insurance, life insurance and retirement plans. Employees whose skills are in higher demand will have an advantage when negotiating terms of employment.

Employment Act 1955 (the EA 1955) also contains provisions regarding terms and conditions pertaining to employment. Among the provisions are:(a) Duration of work (including overtime);(b) Wages;(c) Rest days;(d) Public holidays;(e) Annual leave, medical leave and maternity leave; and(f) Resignation and maternity benefits.What differentiates between a contract of service from an ordinary contract is thatthe terms and conditions are not only limited to what have been stated in thedocument of contract entered between the parties. Alternatively, the terms andconditions can be found impliedly or expressly in contracts between employersand the employees’ unions or in EA1955 itself.

ExampleTerms and conditions of employment are usually set by individual employers. Malaysia has blanket conditions in employment law set by its Parliament of which employers must adhere to. These laws in Malaysia are known as “Labour Laws”.

Working Week in Malaysia

Malaysia operates a Sunday-Thursday working week. This varies in some Northern states and some still use the Saturday-Wednesday. Reforms were made in the middle of 2000 and the weekend was changed to Friday and Saturday. Malaysia is a Muslim Country and Friday is seen

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as ‘Holy Day’ and therefore it is a day of rest. Most offices and shops will close on this day. The tourism industry will work as normal.

All employers have to adhere to one complete day of rest. This can be one 24- hour period so those who work shifts can still have a full day’s rest.

Working Hours

Laws are strict on this in Malaysia. No employer can ask their employee to work for more than five hours work without a 30-minute break.

An employee cannot work more than 8 hours per day.

There must not be more than 10 hours in a day worked over split shifts.

The working week should not be more than 48 hours

Overtime

Overtime is as agreed between employee and employer although the hourly terms and conditions should be applied in terms of the 30-minute break and the 10-hour day. Overtime is paid on top of what is classed as the ‘Normal Rate of Pay’

Illness/Sick Pay

An employee is entitled to sick leave of 14 days per year and this does not have to include hospitalization. This is for less than two years of service.

For employees who have worked for the company for 2-5 years this rises to 18 days.

For employees who have worked for the company for five years or more this rises to 22 days.

If a stay in hospital is required and registered by a doctor then sick leave of up to 60 days is allowed.

Sick pay is according to the terms and conditions of your contract with your employer. The sick leave entitlement is set by the government. Any medical expense must be claimed back from your insurance company.

Maternity and Paternity Leave

Mothers are entitled to one month’s maternity leave. A mother is entitled to maternity pay from her employer for this period under Malaysian employment law.

A father is entitled to one week’s paternity leave with pay under Malaysian Employment Law.

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Annual Leave

Entitlement to annual leave as laid down by employment law is as follows:

8 days in any period of a 12-month continuous employment period if employed by the company for less than two years.

12 days in any period of a 12-month continuous employment period if employed by the company for less than five years.

16 days in any period of a 12-month continuous employment period if employed for more than five years.

Retirement Age and Pension Schemes

The retirement age is currently set at 60 years of age in Malaysia. Pension schemes are compulsory in Malaysia and are known as an ‘Employment Provident Fund’. This is compulsory for Malaysian citizens. Voluntary contributions can be made by residents of Malaysia who are not citizens. Employers are required by law to top these contributions up. This money is set aside in banks as money for retirement or for if a person loses their job through redundancy. It also ensures employers take care of their staff. The pension scheme is compulsory for all citizens regardless of whether they work in the public or private sector and they can invest the money themselves or allow the bank to do it. If employees choose to make their money work for them, then any losses incurred must be borne by the person, it is not covered by the EPF. Currently, the contribution is 11% of an employee’s salary. A further 12% is required as a contribution from the employer.

Unions

Malaysia operates a trade union standpoint and it is only allowed in certain areas of an industry. In other words, board members, chief executives or managing directors are not allowed to be members of unions. The trade unions must be trade. For example, a teacher must join a teacher’s union.

The Trade Union Act does protect the employee from discrimination by an employer for joining a union. This also has a flipside. There can be grounds for dismissal if an employee’s actions within a company from direct association with a union affect that company.

Probationary Periods

The Malaysian Employment Law states that all companies must be fair during a probation period. The employee will be assessed accordingly. On completion of the probationary period, either a contract is drawn up or the person is not successful. The duration of the probation period is set by the company.

Dismissal

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Grounds for dismissal are set by the company and can be actioned at any time. These terms are laid down by the company and in the contract of employment which is signed by both parties.

Notice Period

Notice can be given by any party at any time in line with the terms of the employment contract.

Discussion on the division of terms of employment

EMPLOYMENT ACT 1955

Section 17(1) of the Industrial Relations Act 1967 (IRA 1967) is a mandatoryprovision. This section provides for the following matters:

ProvisionA collective agreement which has been taken cognisance of by the court shall bedeemed to be an award and shall be binding on:(a) The parties to the agreement including in any case where a party is a tradeunion of employees, all members of the trade union to whom theagreement relates and their successors, assignees or transferees; and(b) All workmen who are employed or subsequently employed in theundertaking or part of the undertaking to which the agreement relates.

Implied

An implied term is deemed to exist in law, even though it is not expressed

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Implied Express

For the Employer

For the Employee

PecuniaryNon-

pecuniary

Terms

in any agreement or contract of service.

There are several implied terms that have been identified as used in the contractof service. Though they are not stated in the contract of service, the terms shallbind both employers and employees. Such terms mostly deal with duties andresponsibilities of employers and employees. Two terms that have been identifiedare as follows:

(a) I Implied Terms for Employers (i) The employer shall not direct his employees to do an act that contravenes the law

Even though it is necessary for an employee to follow the instructionsof an employer, he is only bound to follow instructions that are legal.

The employer shall not instruct the employee to do something that is illegal. For example, a clerk shall not be instructed to withhold from making deductions for the Employees Provident Fund.

(ii)It is the duty of the employer to give work to the employeeIn the contract of service, the employee has to do work as instructed by the employer. As consideration, the employer shall pay wages to the employee concerned.

In the case of T Turner v Sawdon (1901), the court decided that the employerdoes not have the duty to provide work for the employee. The duty only arisesif the employer employs workers who are paid by way of commission or byway of work done.

In the case of B Breach v Epsylon Industries Ltd (1976) on the other hand, thecourts took a different approach that is, providing work to the employee isimportant in order to decide upon the status of the employee and to ascertainhis incentive.

(iii) I It is the duty of the employer to provide a safe and proper system ofworkIn the contract of service, it is required that the employer shall providea system of work that is safe at the workplace. It is included to avoidexposing employees to unnecessary risk of injury.

The court ruled that the employer at all times knew or ought to haveknown that the workplace was not safe and his failure in giving awarning on this matter makes him liable for the death of the workerconcerned.

In the case of L Lian Ann Lorry Transport & Forwarding Sdn Bhd vGovindasamy (1982), an employee sustained serious injuries caused by acarpet while unloading it from a lorry.

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The court ruled that the employer had failed to ensure occupationalsafety for the purpose of transferring carpets from the lorry.Thus, based on the decided cases as above, it can be summarised thatthe employers are responsible for ensuring that occupational safety ismaintained. If employees sustain injuries due to their own negligenceand if the employer had provided all the relevant precautionarymeasures at the workplace, the employer cannot be held liable.

(b) I Implied Terms for EmployeesLike employers, employees also have implied terms that must be fulfilledsuch as:(i) T The employee shall always be sincere and faithful towards theemployerThe employee has to perform all instructions given by employers. Therelationship between the employer and employee has to be cordialand requires the sincerity and trustworthiness of the employees to doas required by the employer. This means that the employee at all timeshas to do what is reasonable in the interests of the employer.(ii) T The employee shall not divulge or make known the confidentialinformation of the employerIt is an implied term that an employee should protect the employer byrefraining from divulging confidential information of the employer.Even after one has stopped work, a part of this duty still remains.According to the case of F Faccienda Chicken Ltd v Fowler (1986), the courtexplained that restraint of trade can be imposed by the employer towards pastemployees from divulging, using or relaying to others confidentialinformation about the former employerÊs business. This is especially so if anemployeeÊs former position is of high rank. In such a case, there is apresumption that he shall have several pieces of confidential information andalso the inclination to divulge them to others.(iii) T The employee is also required to divulge confidential informationregarding the employer at all timesThis does not mean that the employee is being dishonest with theemployer. Such divulging of confidential information is necessary if itinvolves public interest, for example when such information concernsan act of crime or fraud. However, it is not practical to divulge suchinformation because this could mean dismissal by the employer.

(iv) T The employee has to do the work assigned with full care and cautionThe employee also has the implied duty to perform work with fullcare and caution and to use his skills efficiently. For example, a driverhas the responsibility of ensuring that care and caution is exercised indriving the employerÊs vehicle.In the case of L Lister v Ramford Ice Ltd (1957), a driver caused an accidentinvolving a fellow worker and the victim brought an action against theiremployer. After paying damages to the victim, the employer initiated an actionfor negligence against the other employee i.e. the driver. He was accused of notperforming his duty with full care and caution.

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Therefore, the driver was ordered by the court to pay back the damages tothe company.Therefore, an employee has to be careful and at all times look after theinterest of the employer in any work that involves the business and affairsof the employer. This is in line with the implied term regarding care andcaution with the employer throughout the tenure of the contract of service.In the case of Majlis Perbandaran Pulau Pinang v Lin Soo ENG (1991), the sameprinciple was applied. In this case, the Federal Court decided that the employerdid not have vicarious liability for injuries or losses of third parties incurred asa consequence of employees who had been negligent while performing theirwork.

3.5.2 Express Terms

The Employment Act 1955 (EA 1955) provides the minimum rights that should be provided for by employers towards employees. If the provisions are lesser than that spelt out in EA 1955, section 7 shall be invoked. EA 1955 as stated in the previous topic stipulates express terms in regulating an employment relationship. The express terms are further divided into two categories i.e. pecuniary and non-pecuniary terms. Pecuniary terms refer to the terms in a contract of service which are related to financial, such as, wages, allowances, bonuses, ex-gratia payments and pecuniary benefits. Meanwhile, non-pecuniaryterms are terms in a contract of employment that are non-monetary, which means they do not directly relate to money. The examples are duration of work, overtime work, rest days, public holidays, annual leave and sick leave.

Express terms become part of the contract of service. These are divided into:(a) Pecuniary terms (terms that are financial in nature); and(b) Non-pecuniary terms (terms that are non-financial in nature).DefinitionExpress terms are terms that are stated clearly in the contract of service.

Wages or SalariesSection 2(1) (a) _ (f) of EA 1955 defines wages or salaries as

Wages means basic wages and all other payments in cash payable to an employee for work done in respect of his contract of service but does not include:

- The value of any house, accommodation or the supply of any food, fuel, light or water or medical attendance or of any approved amenity or approved service.

- Any contribution paid by the employer on his own account to any pension fund, provident fund, superannuation scheme, retrenchment, termination, lay-off or retirement scheme, thrift scheme or any other fund or scheme established for the benefit or welfare of the employee.

- Any travelling allowance or the value of any travelling concession.

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- Any sum payable to the employee to defray special expenses entalled on him by the nature of his employment.

- Any gratuity payable on discharge or retirement.- Any annual bonus or any part of any annual bonus.

Determining whether certain types of payment such as allowances or fixedremuneration are wages as defined by the S. 2 of EA 1955 is very important forthe purpose of computation of overtime allowance, pay for rest days and publicholidays as well as termination and lay-off benefits.

In the case of Chin Swee Hin v Md.Arif (1977), the court decided the foodallowance paid to the respondent by the appellant was part and parcel of thecontract of service and therefore was within the definition of wages as statedin S. 2 of EA 1955.The court decided that since the principal aim of EA 1955 is to protect theworkers from exploitation, therefore certain types of payment paid in cash toworkers could be excluded for purposes of computing overtime pay.

4.1.2 Period of Wages or SalariesS. 18 (1) EA 1955 provides that a wage period shall not be more than one month.However, it can be less than one month.„Wage period‰ means the period in respect of which wages earned by anemployee are payable (S. 2 of EA 1955).

4.1.3 Payment of SalariesGenerally, the employer must pay the salaries according to the period that hasbeen fixed.

ProvisionS. 19 EA 1955, every employer must pay to each of his employees not later thanthe seventh day after the day of any wage period the wages, less lawfuldeductions earned by such employee during such a wage period.However, if there is an application from the employer, the time of payment ofwages can be extended if the Director-General is satisfied with the reasonsprovided by the employer.ProvisionS. 25(1) specifies that the entire amount of wages shall be paid to the employeethrough a bank account of the employee.However, according to S S. 25A (1), an employer may pay an employeeÊs wages incash or by cheque upon written request of the employee.Section 26 states that an employer cannot impose conditions upon the employeesas to how the wages should be spent.Section 28 underlines the method of payment of wages i.e. employers areforbidden from paying wages to employees at liquor shops, entertainmentoutlets or grocery outlets and so on.Under S. 69 of EA 1955, the Director-General has the power to enquire and

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decide any dispute between an employee and employer in respect of wages orany other payment in cash due to the employee. Employees who are not withinthe coverage of EA 1955 may also resort to this section to recover any wages dueto them by employers.

4.1.4 Advance of SalariesS. 22 (1) of EA 1955 states that an employer shall not advance a sum of moneythat exceeds the aggregate total salary of one month, except in situationsexplained in Figure 4.2 as stated in S. 22 (a) _ (de).According to the general practice in this country, there are schemes that areallowed that enable loans and advances to be made (refer to Figure 4.2).

Advances and loans to employee:a) To purchase, build and repair housesb) To purchase landc) To purchase motorcycles, motorcars and bicyclesd) To purchase shares offered by the employere) For other purposes:

- Application by way of writing by employer to Director-General- That is beneficial to the employee in the opinion of the Director-General.- That is approved by the Director-General but on condition that upon

approval, the Director-General can make specifically or use terms that are reasonable.

da) for the purposes gazette by the Minister from time to time db) To purchase a computer dc) To pay for medical expenses for himself or his immediate family members. dd) To pay daily expenses in relation to temporary disablements de) to pay educational expenses for himself or his immediate family.

4.1.5 Deduction of SalariesS. 24 (1) EA 1955 states that an employer is not allowed to make deductions ofemployeesÊ wages that are provided in the Act only. Situations where suchdeductions are allowed as per the Act under S S. 24(2) are shown in Figure 4.3.

(a) Any overpayment made by the employer in the 3 months before deduction(b) Deductions to indemnify that has been paid by employer to employee under s.13(1)(c) Deductions to recover advances paid under s.22 without interest.(d) Deductions allowed under any written laws.

ProvisionS. 24(3) lists deductions allowed with the written consent of employees

Such deductions include:

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(a) Deductions towards registered trade unions, cooperative thrift and loansocieties of any sum of money for entrance fees, subscriptions instalmentsand interest on loans or other dues; and(b) Deductions in respect of any shares of employersÊ business offered for saleby the employer and purchased by the employee.S. 24 (4) touches on deductions that shall not be made except with the requestin writing by the employee and with the prior permission of the Director-General in writing.

Such deductions are for:(a) Payment of any superannuation scheme pension fund, employerÊs welfarescheme or insurance scheme established for the benefit of employees;(b) Repayments made to employees under S. 22 where interest is levied;(c) Payments to third party on behalf of the employee;(d) Payment of purchase of any business commodity by the employer;(e) Rental of accommodation and cost of services, food and meals provided bythe employer under the request of employees or under the terms of contractof service.Under S S. 24(5) the Director-General shall not permit any deductions forpayments under paragraph 4(e) unless he is satisfied that the provision of theaccommodation services, food or meals is for the benefit of the employee.However, S S. 24(7) empowers the Director-General to allow deductions uponrequest by the employers but subject to such terms that he may deem fit toimpose.Apart from S S. 24(9), the total deductions cannot exceed 50% of the wages of theemployees in that month S S. 24(8).

4.1.6 Minimum WagesBesides EA 1955, the recent statute that deals with employeesÊ wages is theNational Wages Consultative Council Act 2011 (the 2011 Act), which establishedthe National Wages Consultative Council (the Council). The main responsibilityof the Council is to conduct studies on all matters concerning minimum wagesand to make recommendations to the government to make minimum wagesorder according to sectors, types of employment and regional areas, and to othermatters relating to minimum wages and wages. Consequently, on 1 May 2012,Malaysian Prime Minister Datuk Seri Najib Tun Razak announced the firstnational minimum wage policy which is laid down in the M Minimum WagesOrder 2012 (the Order). The Order would apply to employees who enter acontract of service in all economic sectors, except for domestic services, involvingmaids and gardeners (Paragraph 3 of the Order). Thus, all employees within thescope of EA 1955 will benefit from this new policy.Paragraph 4 of the Order specifies a minimum wage of RM900, or RM4.33 anhour, for Peninsular Malaysia and RM800, or RM3.85 an hour, for Sabah, Labuanand Sarawak. This new scale of wages took effect on 1 January 2013 foremployers who employ more than five employees and those employers

regardless of numbers of employees who are involved in professional businessactivities i.e. medical and dental clinic, law, architectural and consulting firm.Meanwhile, the effective date for small-time employers or micro enterprises with

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at least five employees is extended to 1 July 2013 to ensure that they have ampletime to make the necessary adjustments. The affected employers are, however,allowed to apply to the Council to postpone the implementation of the newwages scale to another date (Paragraph 2 (2) of the Order). The Order also coversthe requirement of minimum wages for employees under probationary periodi.e. the minimum amount of wages for this category of workers is allowed to bereduced not exceeding 30% from the minimum amount of wages as stated before(Paragraph 5). The 2011 Act (S. 43) provides that an employer who fails tocomply with this new policy commits an offence and shall upon conviction beliable to a fine not exceeding RM10,000 for each employee.

ALLOWANCESMatters regarding allowances have long been deliberated by the courts eventhough EA 1955 hardly deals with these employeesÊ rights except maternityallowance. The following is the list of allowances recognised by the courts:. Acting allowance;. Attendance allowance;. Call allowance;. Living allowance;. Food allowance;. Hardship allowance;. Housing allowance;. Outstation allowance;. Overtime allowance;. Shift allowance;. Training allowance;. Transfer allowance; and. Travelling allowance.The settlement regarding these allowances is based on the provisions of thecontract of service. Therefore, it may be different from one organisation to another.However, for overtime allowance on rest and public holidays, the provision underEmployment (Limitation of Overtime Work) Regulations 1980 applies.Maternity AllowanceEligibility for maternity allowance is stipulated in S. 37 (1) (a) of EA 1955.However, since the relevant provisions also set out other maternity-relatedbenefits, the discussion will extend to all such benefits.Every female employee regardless of whether she falls within the ambit of EA1955 is now assured to enjoy her maternity-related rights as provided under PartIX of EA 1955 (S. 37-44A). The entitlements are a period of maternity leave of notless than 60 consecutive days and a maternity allowance during this period (S. 37(1) (a). Female employees may start their maternity leave from the 22nd week ofpregnancy (see definition of the term „confinement‰ in S. 2 of EA 1955).EA 1955 (S. 37 (4)) further prohibits the termination of a female employee duringthe period she is eligible to maternity leave. An employer who terminates theservice of a female employee during the period commits an offence unless thetermination is proven to be the result of the closure of the employerÊs business.The following conditions are however imposed by EA 1955 for a femaleemployee to enjoy maternity-related benefits i.e. maternity leave and allowance:(a) The leave should not commence earlier than a period of 30 days

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immediately preceding the confinement of a female employee or later thanthe day immediately following her confinement unless certified by amedical officer appointed by the employer. In such cases, the leave maycommence any time before the 14 days prior to delivery;(b) If the worker takes leave prior to the situations above, she is not entitled tothe benefit for the days she has not turned up for work; and(c) This allowance is only if she has not more than five children includingthose that had passed away in previous pregnancies.Section 40 (2) states that a female employee who is pregnant must inform theemployer of her position within 60 days before delivery. Otherwise, the paymentof allowance can be withheld. This is important to enable the employer to makenecessary arrangements.

BONUS AND EX-GRATIA PAYMENTSBonus and ex-gratia payments are payments made by employers apart from thewages and are not discussed in EA 1955.S. 60I (3) provides that the Director-General can upon the application of theemployer approve in writing any scheme of incentive payment as an approvedincentive payment.However, this matter has been discussed by the court and the scope is very wide.This is because there are far too many types of payments that can be made by theemployer, apart from wages to attract the employees. Only a few types ofbonuses and compensations will be discussed here, whereas the differencesregarding wages, bonus and ex-gratia payments are to be discussed later.

4.3.1 BonusEA 1955 is silent on the right of employees to be paid bonus. The contract ofservice also does not mention bonuses. This is because it is the prerogative of theemployer. Employers may insert this provision at their discretion. However, thecourts sometimes recognise another types of bonus which is contractual bonus.The awards of the courts below will illustrate the differences betweendiscretionary bonus and contractual bonus.As defined by the Oxford Dictionary, bonus is „ payment to employees apartfrom wages‰. In other words, it is not the duty of the employers to provide bonusto employees but they may provide it as an incentive towards the servicesprovided by the employees.Many questions have been raised in the courts as to whether compulsorybonuses must be provided or otherwise.

In the case law of States of Malaya Insurance Association and National Union ofCommercial Workers (Award 157/80), it was decided that the non-contractualbonus is an uncertain payment. It can only be given if the employer makesprofits.Contractual bonus is bonus that is considered compulsory. This means thebonus is provided for in the contract of service as compulsory payment by theemployer apart from the wages. Time and mode of payment is decided in theagreement. The quantum is also fixed. It shall be paid whether the employermakes a profit or not.

4.3.2 Ex-gratia PaymentThe ex-gratia payment does not have a strict definition.In the case of N NSTP Bhd and National Union of Journalist (250/88), apart from

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receiving bonus of two months wages on 20 December each year, the employeeswere also given compensation that varied as per the employerÊs discretion. Inthis case, the Workers Union was unhappy with the way the employers usedtheir discretion to ascertain the payment. The union sought a guideline and forthe employer to adhere to it. Upon deciding, the court exhorted that the word„ex-gratia‰ is clear as its meaning which means compensation. Therefore, onlyone compensation is to be made as an incentive by the employer. Thus, theapplication of the union was disallowed.

4.4 PECUNIARY BENEFITSPecuniary benefits include:. Dismissal, retrenchment or discontinuance allowances;. Retrenchment benefit;. Retirement benefit;. Medical benefit; and. Insurance benefit.Most of the above said benefits are not provided for in E EA 1955. Likewise, thereare also other benefits that are not provided for in the statute but have beenprovided by the courts like death benefits, car loans and housing loans.

4.4.1 Lay-off and Termination BenefitsThe benefits regarding lay-off and termination can be found in the Employment(Termination and Lay-off Benefits) Regulations 1980. The following are thesignificant provisions in E Employment (Termination and Lay-off Benefits)Regulations 1980.(a) R Rule 3 _ An employee is entitled to termination or lay-off benefits if hiscontract of service is terminated or laid-off provided that the employmentis not less than 12 months of continuous service.(b) R Rule 4 (1) _ The entitlement in Rule 3, however, does not cover a situationwhen an employee is terminated from his service due to retirement, by anemployer on the basis of misconduct or voluntary termination by theemployee.(c) R Rule 4 (2) and (3) _ A worker is not entitled to lay-off and terminationbenefits if:(i) There is continuation of work by the employee through a newcontract of service that has new terms which are not lesser than theprevious contract of service and the renewal of the contract of serviceis enforced from the date of termination;Or(ii) The employer has made a new offer with no lesser terms not fewerthan seven days from the date of lay-off and termination; and(iii) The renewal begins on or before the date of lay-off and terminationbut the employee has turned it down unreasonably.(d) R Rule 8 _ If there is a change in the employerÊs (equity or ownership) thenthe employee is not entitled to lay-off and termination benefits if:(i) The employee has rejected the offer by the new employer that hasbeen offered with seven days of change of the employer and with nolesser terms contained therein(ii) The employee is not offered such a job then the previous and newemployers are jointly liable to pay compensation.

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(e) R Rule 5 _ Provides that an employee is deemed to be laid-off if:(i) The employer did not provide work for at least 12 days in any onemonth.(ii) No wages were paid for such days when he was not provided withwork.

(iii) If these days fall on rest days, public holidays, sick days, maternityleave or other holidays then these days are not included as the dayswhen work was not provided.(f) R Rule 6 _ Specifies the quantum of compensation payable in the cases of layoff/termination.(i) If the employee had been working less than 2 years _ not less than 10days wages for each year.(ii) If employee has been working more than 2 years but less than 5 years_ not less than 15 days wages for each year.(iii) If employee had been working 5 years or more _ not less than 20 dayswages for each year.(iv) On a pro-rata basis if lesser years based on the nearest number ofmonths.

In the case of H Hotel Continental and National Union of Hotel, Bar & RestaurantWorkers (Award 571/1984), the court allowed the part or whole closure ofbusiness by the employer. However, the workers must be paid benefits ascontained in Regulations 1980.

4.4.2 Retirement BenefitsThe EPF shall only be paid upon retirement and not when there is a long lay-off/termination or resignation. In the case of A Association of Bank Officers andMalaysian Commercial Bank Association (Award 54/1981), it was stated thus:

Definition„_The contribution or payment of employees to the EPF is actually aretirement benefit‰.

4.4.3 Resignation BenefitsThe courts do not endorse such benefits but if they are provided for the collectiveagreement, then the courts shall not deny it.

In the case of F Federal Iron Works Sdn Bhd and Metal Industry EmployeesUnion (Award 123/1991)- „In principle we do not condone resignation benefits. However, if thecompany and the unions have such provisions in their collective agreement,then we do not propose to hinder it.‰

4.4.4 Medical BenefitsThe Industrial Court in Golden Sands Beach Resort and National Union ofHotel Bar and Restaurant Workers (Award 107/1988) confirmed that the

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employer had to provide medical benefits. This was not extended to familymembers. Furthermore, the expenses incurred should not over-burden theemployer.

4.4.5 Insurance BenefitsThe Industrial Court also does not reject the giving of insurance benefits to theemployer for a total that is more than that provided in E EmployeesÊ SocialSecurity Act 1969 (ESSA 1969) on condition that the employer is able to provide itand the workers receive the benefit. This is because the protection that isprovided by the Social Security Organisation (SOCSO) is limited. For example,the protection from SOCSO is only for any incident out of and in the course ofemployment. Any protection other than this is not provided by SOCSO.The courts allow the employers to grant protection that is above the scope of thatprovided for in SOCSO (namely, the protection out of and in the course ofemployment). The extent of the protection is dependent upon the employer andis dependent upon the capacity of the employers. However, the general safety ofthe worker has to be considered at all times.

4.5 NON-PECUNIARY TERMSThe terms that are non-pecuniary in nature provided by EA 1955 (Part XII) are,among others, duration of work, overtime work, rest days, public holidays,annual leave and sick leave. Meanwhile, leave regarding union matters havebeen provided for in Industrial Relations Act 1967 (IRA 1967). Apart from these,the awards of the Industrial Courts have also provided several benefits byconsidering the current situations.

4.5.1 Duration of WorkEA 1955 (S. 60A (1)) has specified some rules relating to work hours of anemployee. It does not allow an employee to work:_ More than 5 continuous hours without a rest period for at least 30 minutes;_ More than 8 hours in one day;_ More than 10 hours in the case of spread-over period a day; and_ More than 48 hours a week.Regarding to spread-over hours of work usually in restaurants and cateringbusiness, the following illustration will be useful:If an employee in a restaurant works from 10am to 2pm and from 6pm to 10pm,his spread-over period of work is 12 hours which entitles him to be paid withovertime of 2 hours.Exceptions to the above rules are as follows:(i) Generally, the maximum work hours of an employee is 8 hours. In the casewhere an employee is required to work 8 hours continuously, he is entitledto have at least 45 minutes as a rest period (S. 60A (d)(ii)).(ii) In the event an agreement is concluded between both parties i.e. to work for8 hours per day but less than 8 hours on any other in the week, the total hoursof work shall not be more than 9 hours per day or 48 hours per week. All theseprovisions can be found in Section 60A (d) (iii).(iii) The employer can also increase the work hours more than that provided forin Section 60A(1) but on condition prior written permission is obtainedfrom the Director-General and after stating the reasons for the increase inhours of work.

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(iv) Section 60C (1) states that the employer can require the worker to worklonger than that in Sections 60A(1) for those involved in s shift work. He canbe asked to work more than 8 hours on any day or more than 48 hours in aweek but the average hours in any 3 weeks must not exceed 48 hours in aweek.(v) Section 60A (2) allows an employer to ask the worker to work longer thanthat in 60A (1) in certain situations as follows:. Accidents, real or threatening, in or related to the workplace;. Work which is essential for the lives of the society;. Work regarding defence and security of Malaysia;. Work that has to be done on machinery or plant;. An unexpected disturbance to work; or. Work that should be performed by the workers in any industrialactivity that is necessary for the economy of Malaysia, or any necessaryservice that is defined in the Industrial Relations Act 1967.Section 60 A (7) states that no employer can direct his workers to work more than12 hours in a day, except if he can show one of the situations as in 60A(2) to exist.However, this provision is not used if the worker is not involved in active workor the job requires waiting for longer periods.If a worker is directed to work longer than what has been stated, his work isconsidered as o overtime work.Regarding the time of work, the court gives discretion to the employer to modifyit in accordance with the needs of the company.In the case of Sun Mix Concrete Sdn Bhd and Non metallic Mineral ProductsManufacturing Employees Union (Award 115/1987), the court confirmed theemployerÊs power in deciding and modifying the time of work. However, thispower is subject to the laws, so that it is in accordance with provision of the Actand situation or type of work.

4.5.2 Overtime WorkSection 60A (3) (b) defines „overtime work‰ as:Definition„Work hours carried out in excess of the normal work hours‰

Any work exceeding 10 hours that is from the beginning of work until theworker ends for the day is considered overtime. In the case of Eng Giap PublicMotor Bus Co.Ltd v Gan Eng Keng and 36 others [1975], the court explainedovertime as follows:„Overtime exists when a worker is required to work more than the normal workhours in a day.‰Section 60A (3)(a) states that for any work done beyond the normal work hours,the worker should be paid one and a half times the normal rate of wages.Normal work hours refer to the total work hours as agreed upon by the employerand the worker in the contract of service as the work hours in a day. Any workthat is done on rest days, any gazetted holiday or any paid holiday substitutedthereof is to be taken as overtime work.The payment is based on what the worker receives monthly, weekly, daily orhourly or is a piece rate.Section 60I (1A) and (1B) state respectively that when a worker is paid a monthly

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rate of pay and weekly rate of pay respectively, the ordinary rate of pay (means„wages‰ as defined in S. 2 of the EA) shall be calculated according to the formula:_ Monthly rate of pay/26; and_ Weekly rate of pay/6.

The formulas for payment on daily rate, payment for sick leave for workers whowork at the normal rate of wages and so on are contained in Section 60I (1C) to(1D).

4.5.3 Rest DaysSection 59(1) of EA 1955 secures the right of an employee to enjoy his rest days asfollows:

Rest days do not include maternity leave, sick leave during the period oftemporary disablement under the WorkmenÊs Compensation Act 1952 or underthe Employees Social Security Act 1969. In the case of an employee engaged inshift work, any continuous period of not less than 30 hours shall constitute a restday.Section 59 (1A) Subsection (1B) empowers the Director-General to grant the restday for each week on any day of the month in which the rest day falls.For employees who do not have fixed rest days, S.59(2) states that a roster beprepared to inform the workers when their rest days fall to enable them to makechoices as to whether to work on these days. An employer who contravenes thissection commits an offence under section 59(4).Every employee shall be allowed in each week a rest day of one whole day asmay be determined from time to time by the employee and where an employeeis allowed more than one rest day in a week the last of such rest days shall bethe rest day for the purpose of this Part.This was proved in the case of Sundram v Veemah (1972) MLJ 83 that showedthat the court stated that Section 59 does not give choices to the employers exceptto inform the workers in advance of the rest days and preparing the roster thathas to be displayed. This facilitates the worker in preparing for his leave inadvance and also to know when he is qualified to do overtime work if required.

As per 60(1), no worker can be forced to do overtime on rest days unless he isinvolved in work that has to be carried out continuously or continually by shifts.Summary for rates of payment that should be received when an employee workson rest days which depend on the types of pay received (see Table 4.1).Table 4.1: Summary for Rates of PaymentWorks On Rest Days Types of Pay ReceivedDaily or hourly pay _ S. 60 (3) (a). For work done that does not exceed _normal hours of work. For work done more than half but doesnot exceed normal hours of work. For work done exceeding normal hoursof work - S. 60 (3) (c)1 dayÂs wages2 daysÊ wages

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2 x hourly rate of pay x hours workedMonthly pay _ S. 60 (3) (b). For work done does not exceed _normal hours of work. For work done more than half but doesnot exceed normal hours of work. For work done exceeding normal hoursof work_ dayÂs wages1 dayÊs wages2 x hourly rate of pay x hours workedPiece-rated pay _ S. 60 (3) (d) 2 x ordinary rate per piece

4.5.4 Annual LeaveS. 60E (1) (a) _ (c) stipulates annual leave as follows:_ 8 days if employed for less than two years;_ 12 days if employed for a period of two years or more but less than five years;and_ 16 days if employed for five years or more.If an employee has not completed 12 months of continuous service and hisservice is terminated in that year, he is entitled to paid annual leave in directproportion to the number of completed months of service with the condition thatwhere the fraction of a day of annual leave that is calculated that is less than halfof a day or more, must be considered as one day. However, his right to enjoysuch leave is denied if he is absent without the permission of the employer, and

without reasonable basis for more than 10% of the working days during thetwelve months of continuous service.If an employee while on annual leave is entitled to sick leave or maternity leave,then the worker is to be given sick leave or maternity leave and the annual leaveis taken as not used (S. 60E (1B)).For employees terminating their services, they are allowed to take their paidannual leave in that year where termination occurred. In addition, all the accruedleave for the months of service in that year can be taken (S. 60E (2A)).If the contract of service has been terminated by either party before the employeetakes his paid annual leave, the employer must pay the worker the normal wagerate for each day of the leave, except in the case of the employee being dismissedafter due inquiry for gross misconduct (S. 60E(3A)).

4.5.5 Sick LeaveSection 60 F (1) states such leave can be taken only after examination paid by theemployer by:_ Registered medical officer appointed by the employer; or_ Any other medical officer if the above is unavailable.Section 60F (1) (aa) states the following leave entitlement if the worker does notrequire hospitalisation:_ 14 days if the worker has worked less than 2 years;_ 18 days if he has worked more than 2 years but less than 5 years; and_ 21 days if the worker has worked more than 5 years.Section 60F (1) (bb) states if hospitalised, the worker gets 60 days of leave foreach year. A doctorÊs confirmation is required for hospitalisation. If the employeeis not hospitalised, he is still entitled for 60 days of leave.

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Section 60F (2) states that if a worker absents himself because of sick leave:. That is not confirmed by a registered medical doctor under Subsection (1) orby a dentist as provided in (1A); or. Confirmed by doctor and dentist but he fails to inform the employer within48 hours after such leave; and. Is said to have absented himself without the employerÊs permission andwithout good reason.The employer has to pay the normal rate of wages for every day of the sick leaveand if the monthly wages has no deduction of the sick leave then it is to be saidthat the sick leave has been paid for _ Section 60F (3). Employees who are undermaternity leave, incapacity leave under SOCSO Act 1969 and Compensation Act1952 are not entitled to paid sick leave.

4.5.6 Public HolidaysAccording to Section 60D (1), every worker is entitled to paid holidays in acalendar year as follows:(a) For 11 days as gazetted, 5 of which shall be:(i) National Day;(ii) Birthday of Yang Di-Pertuan Agong;(iii) Birthday of Ruler or Yang Di-Pertua Negeri;(iv) Federal Day; and(v) Malaysia Day.(b) On any day declared under Section 8 of the Holidays Act 1951. Accordingto Section 60 D (1), if any of the public holidays referred to in paragraph (a)and (b) falls on a rest day, the following work day would then become theholiday as a replacement.Among the gazetted holidays are:(i) Hari Raya Puasa;(ii) Hari Raya Haji;(iii) Chinese New Year;(iv) Labour Day;(v) Wesak Day;(vi) Maulidur Rasul;(vii) Deepavali; and(viii) Christmas Day.Among the state public holidays are birthday of the Sultan, Yang Di-PertuaNegeri, Awal Ramadhan, Thaipusam, Nuzul Quran and New Year. Thus if thepublic holiday falls on a rest day, the worker has the right to a holiday thefollowing day. This is provided under Section 60D (1)(b).Section 60D (1A) _ The employer and worker can also have an agreement thatof the identified paid holidays can be replaced by another day.Section 60D (1B) fixes that if the public holiday falls on sick leave, annual leave orduring a period of incapacity then as per EmployeesÊ Social Security Act 1969 orWorkmenÊs Compensation Act 1952, the holiday must be replaced with anotheras paid holiday.Section 60D (2) states that if a worker does not attend the day before or the dayafter the public holiday without consent of the employer he is not entitled to getpayments for the public holiday unless he has good reasons.Section 60D (3) states the wages to be paid while working on holidays. As anaddition for the payment for the holiday the employee also gets:

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Two daysÊ wages at the normal rate if taken to work monthly, weekly,hourly or any other rate; orTwice the normal rate for the work done if he has taken to work at the rateaccording to work.right of the employee to this payment is fixed although the duration of workthat day is less than the normal working hours.However, if the employee is required to work overtime beyond the normalworking hours, Section 60D (3) (aa) states that the worker can get three times thenormal rate. Subject to the condition of the agreement, travelling allowance mustbe provided by the employer for the journey to and from work.Section 60D (4) however provides that if any public holiday falls on a halfworkday, the normal wage rate that is applicable must be the wage rate for a fullworkday.

4.5.7 Maternity LeaveThis right of a female employee has been discussed earlier (refer to maternityallowance 4.2.1).

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