STOP government attempt to legalize outsourcing agents and their 'illegal' practices

The government is attempting to legalize outsourcing agents/companies and their current 'illegal' practices through the new Employment (Amendment) Bill 2011.

Worker works hard for company A.... but company A pays to B (the outsourcing agent/company) who then pays the workers that they supplied to Company A as workers. Company A pays RM60 for the workers 1 day work - and B (the outsourcing agent/company) pays the worker RM20 and keeps RM40 for itself. If worker works overtime, of course they get more pay but B (the outsourcing agent/company) also gets more. Something is very very wrong with this picture...

B(the outsourcing agent/company)  will continue to parasite out of the workers sweat and toil - like 'toll' every day the worker works and earns, the BB (the outsourcing agent/company) profits more and more...

Private Employment Agencies and Head Hunters find workers for companies - and once they get the worker a job (or the employer the worker) they get paid a fix fee ....and that is that...but this B (the outsourcing agent/company), they continue to suck profits from the workers for so long as the workers are working...

This is kind of illegal 'employment relationship' that Malaysia is trying to legalize by amending our Employment Act through this new Employment(Amendment) Bill 2011..

But sadly, the MTUC and workers union is not seen to be protesting ...or maybe, they are but the media is not covering their objections...

At this time, when all seem to be distracted by the BERSIH issue (which is important), our government may sneak in amendments to employment laws of Malaysia that will be very detrimental to workers and their unions in Malaysia - and 'liberate' employers from their obligations to worker rights and welfare...

Oh yes, the big companies will no longer need to worry about worker rights, benefits, occupational health and safety, trade unions, collective bargaining, getting rid of workers they do not want, disciplinary procedures, domestic inquiry - as the workers that work in their factory will be "NOT THEIR EMPLOYEES' if this amendment gets passed. If they want to get rid a worker, just pick up the phone, and tell the 'contractor for labour' (outsourcing company)...and the worker is gone - no need for show cause, domestic inquiry, notice, etc...

The tabling of this Bill, that creates this 'contractor for labour' is yet another proof that our Malaysian BN government no more cares for workers - their rights and their welfare.

Employment (Amendment) Bill 2011 must be opposed for the sake of Malaysian workers and unions

The Malaysian Barisan Nasional government is once again attempting to amend our Malaysian Employment Act 1955, vide the Employment (Amendment) Bill 2011, which will affect employment relationships that will certainly be detrimental to workers and trade unions in Malaysia.

In a factory/plantation/workplace there must be just one employer, being the owner-operator of the said factory, and all the workers working in the said factory are the employees of this employer. Hence, all the workers in this factory can form one union or association, and have direct dealings, negotiations  and collective bargaining exercises with their employer about better working conditions and improved worker rights.

What the new amendment, if passed, would do is create a situation whereby the workers in a particular factory will no longer all be employees of the one employer, being the owner-operator, but  where different groups of workers will have many different employers. A situation will be created where many of the workers in the same factory will no longer be employees of the owner-operator of the factory, and hence will no longer enjoy to be members of the union in the said factory, or have the right to negotiate or enjoy the ability to be involved or benefit from collective bargaining agreements with the factory. Their employer would be labour suppliers or ‘contractors of labour’ who supplied these workers to the factory, who really are third parties who are not even in the factory, let alone have the control or the power to do anything about improving working conditions or dealing with any work-related matters, which really is under the full control of owner-operators. 

There will be now be a percentage, which could be a very percentage of workers, who work in factories who will no longer have a direct employment-relationship with their ‘real’ employer, the owner-operator.  Even if they do raise grievances to the owner-operator of the factory about work related matters, the response of these owner-operator is that they are not the employers, and any grievances must be raised with their ‘contractor of labour’ employers. 

Certainly, these situation of workers in a factory being employed by many different employers, some by the real owner-operator employer, and others by many different absent employers, being this  newly legalized  ‘contractors for labour’, and certainly would weaken workers’ bargaining powers and also their unions. ‘Divide and exploit’ would become the new norm, which will certainly be beneficial for owner-operator employers whose only concern is profits and not worker rights and welfare, and most detrimental to all workers in Malaysia.

The International Labour Organisation(ILO) has shunned the attempts of employers to evade or disguise employment relationship through various contractual,  business arrangements and triangular relationships, and did not only come out with a Resolution concerning the employment relationship but has since then come out with numerous  recommendations and guidelines to help unmask and/or determine who the real employer of these workers are. The employer is and always must be the owner-operator of the factory, where the worker really work, the person/entity who  owns the tools of work, the person/entity who  controls  the place of work and supervises the actual work, the one whose product the workers makes/produces,  the one who profits from what the worker produces. The employer can and should never be supplier of workers. Sadly, Malaysia is trying to legalize evasion of real employment relationship.

Minimum wages now, not policies (Free Malaysia Today, 29/6/2011)

Minimum wages now, not policies

June 29, 2011, Free Malaysia Today

While a significant number of workers suffer due to poor wages, the government continues to be pro-employer in its approach.

 

By Syed Shahrir Syed Mohamud

It was a sad day for workers and unions in Malaysia when Prime Minister Najib Tun Razak at the Malaysian Trade Union Congress (MTUC) dinner on June 14 made no firm commitment on the promotion and protection of workers’ rights.

As for the minimum wage issue, his response was that this matter is to be referred to the National Wage Consultative Council. There was also no positive response on the issues of retirement age of 60, increasing maternity leave to 90 days for all workers, and the Cost of Living Allowance (COLA).

Workers in Malaysia are still a very low priority of the current Umno-led Barisan Nasional government that has ruled since independence in 1957. Pleas of workers and their families for decent wages continue to be ignored by a government that has been shown to be pro-employer and pro-business, which, by its actions and omissions, seems to be more interested in maintaining the supply of lowly paid, “problem-free” and “easily used and disposable” workers especially for private sector companies.

Workers’ demand and plea for a basic minimum living wage law that will ensure that workers and their families will be able to live decent lives as human beings continue to be ignored by this government, which has at the same time been very fast in increasing the cost of living. This government has allowed increase in the cost of electricity, water, postal services, phone charges, toll charges, petrol and generally the cost of living.

The introduction of the Goods and Services Tax (GST) saw an overall rise of cost of almost all goods and services. Continuous subsidy removals have also resulted in the increase of prices of basic goods and amenities needed by all persons to sustain life. All these measures that resulted in an increase in the cost of living of workers and their families have been done speedily and systematically, but at the same time this government has not ensured increase in wages, and has been systematically removing the right to secure employment until retirement age.

New workers today are being allowed by the government to be employed as short-term contract workers, and sadly even once permanent workers are made to leave through various schemes, like voluntary separation schemes (VSS) and then re-employed as short-term contract workers. Then, the government has expressed the intention of wanting to deny these now contract workers the right to go to court and claim for reinstatement when they are wrongfully dismissed by employers, but the trade unions and civil society opposed this and the government has yet to make this law.

Now, another disturbing trend is that the government is allowing some companies to avoid employment relationships, and their duties and obligations to the workers who work in their factories, plantations and workplaces. It is doing this by a new illegal entity called outsourcing agents, who are actually contractors for labour that supply workers to principals, and this clearly is not allowed in our Employment Act 1955. The law applies to all, including the government, and action is demanded that injustice and violation of law are aggressively ended.

Workers living below poverty line

On minimum wage, Malaysia always had the Wages Councils Act 1947, which gave the government the means and mechanisms to stipulate minimum wages for workers but, alas, it seems that only four categories of workers have been covered by orders made under this Act, that is, in 1967, 1970, 1972 and 1977. They are catering and hotel workers, shop assistants, cinema workers, and Penang stevedores and cargo handlers respectively. For example, the 1970 order on shop assistants provides that the minimum remuneration for a worker ranges from RM170 to RM250, depending on the age of the worker, location and whether full-time or apprentice.

Now, rather than immediately setting and implementing a minimum wage for all workers in Malaysia, or coming out with a minimum wage law, the BN government is telling us that it is tabling a new Bill called the National Wage Consultative Council Act, and the fear is that this will just be as ineffective as the previous law, and all workers will not enjoy basic minimum wages for some time yet, if at all.

The government can immediately set the basic minimum living wages for workers now, subject to later adjustment. A few months ago, the government set the minimum wages for security guards at RM700 per month, which came into effect at the end of January 2011, and as such, the government also can and should immediately set a floor minimum wage for all workers now. It is proposed that this be at least RM900 and it become effective on July 1, 2011. Further adjustments and annual periodic reviews can be done later but at least workers will get sufficient wages now for themselves and their families when cost of living is already so high.

It is sad that the new president of MTUC, Khalid Atan, saw it fit to shower praises on our prime minister, and pledged that MTUC will be working closely with this government that has a history of being anti-worker and pro-employer. MTUC, trade unions and workers’ groups must always place as priority the fight for workers’ rights and welfare, and not try to curry favour with politicians and the government of the day.

It is also distressing that MTUC has allowed the event to become an Umno event, in particular when Umno Youth used it to launch its workers complaints (aduan pekerja) website. It would have been much better if the money was just donated to MTUC to have its own independent website.

Workers and their unions have been calling for minimum wage for a long time, and this demand intensified in the last six years but, alas, the current government’s response has to date been empty promises only save for the 100,000 plus security guards that got something.

Let us not forget that a study on wages initiated by the Human Resources Ministry has revealed that almost 34% of about 1.3 million workers earn less than RM700 a month, below the poverty line of RM720 per month. And in June 2011, our prime minister is not talking about workers getting minimum wages soon but only that “…he hoped a minimum wage policy can be implemented by year-end…”

Workers demand minimum wages today – not just a policy by end of the year.

Syed Sharir Syed Mohamud is the former Malaysian Trade Union Congress president.

Will our MPs protect workers and unions? The proposed Bill to amend employment act..

That Bill that will amend Employment Act 1955 to the detriment of workers, trade unions, employment relationships in Malaysia. Workers working in a factory will no longer be employees of the said factory - they will be employees of those that supplied them to work in the said factory. (see also earlier post:-Beware the new Employment(Amendment) Bill 2011 detrimental to all workers and unions

D.R.15/2011 Employment (Amendment) Bill 2011

 A BILL

i n t i t u l e d

An Act to amend the Employment Act 1955.

[ ]

ENACTED by the Parliament of Malaysia as follows:

Short title and commencement

1. (1) This Act may be cited as the Employment (Amendment) Act 2011.

(2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette, and the Minister may appoint different dates for the coming into operation of different provisions of this Act.

Amendment of section 2

2. The Employment Act 1955 [Act 265], which is referred to as the “principal Act” in this Act, is amended insubsection 2(1)—

(a) in the definition of “confinement”, by substituting for the word “twenty-eight” the word “twenty-two”;

(b) in the definition of “constructional contractor”, by substituting for the word “assigns” the word “assignees”;

(c) by inserting after the definition of “contractor” the following definition:

‘ “contractor for labour” means a person who contracts with a principal, contractor or sub-contractor to supply the labour required for the execution of the whole or any part of any work which a contractor or sub-contractor has contracted to carry out for a principal or contractor, as the case may be;’;

(d) by inserting after the definition of “employee” the following definition:

‘ “foreign domestic servant” means a domestic servant who is not a citizen or a permanent resident;’;

(e) by inserting after the definition of “medical officer” the following definition:

‘ “Minister” means the Minister charged with the responsibility for human resources;’;

(f) by substituting for the definition of “part-time employee” the following definition:

‘ “part-time employee” means a person included in the First Schedule whose average hours of work per week as agreed between him and his employer are more than thirty per centum but do not exceed seventy per centum of the normal hours of work per week of a full-time employee employed in a similar capacity in the same enterprise;’;

(g) by inserting after the definition of “registered medical practitioner” the following definition:

‘ “sexual harassment” means any unwanted conduct of a sexual nature, whether verbal, non-verbal, visual, gestural or physical, directed at a person which is offensive or humiliating or is a threat to his well-being, arising out of and in the course of his employment;’; and

(h) by deleting the definition of “sub-contractor for labour”.Employment (Amendment) 3

Amendment of section 4

3. Section 4 of the principal Act is amended by substituting for the words “under section 69 or section 73” the words “or decision under section 69, 69b, 69c, 73 or subsection 81d(4)”.

Substitution of section 19

4. The principal Act is amended by substituting for section 19 the following section:

“Time of payment of wages

19. (1) Subject to subsection (2), every employer shall pay to each of his employees not later than the seventh day after the last day of any wage period the wages, less lawful deductions earned by such employee during such wage period.

(2) Wages for work done on a rest day, gazetted public holiday referred to in paragraphs 60d(1)(a) and (b) and overtime referred to in section 60a shall be paid not later than the last day of the next wage period.

(3) Notwithstanding subsections (1) and (2), if the Director General is satisfied that payment within such time is not reasonably practicable, he may, on the application of the employer, extend the time of payment by such number of days as he thinks fit.”.

Amendment of section 22

5. Section 22 of the principal Act is amended—

(a) by numbering the existing section as subsection (1);

(b) by deleting paragraph (c);

(c) by inserting after paragraph (da) the following paragraphs:

“(db) to enable him to purchase a computer;

(dc) to enable him to pay for medical expenses for himself or his immediate family members; 

(dd) to enable him to pay for daily expenses pending receipt of any periodical payments for temporary disablement under the Employees’ Social Security Act 1969 [Act 4];

(de) to enable him to pay for educational expenses for himself or his immediate family members;”; and

(d) by inserting after paragraph (f) the following subsection:

“(2) For the purposes of this section, “immediate family members” means the employees’ parents, children, siblings or any other person under the employee’s guardianship.”.

Amendment of Part V

6. Part V of the principal Act is amended by substituting for the heading “RELATING TO THE TRUCK SYSTEM” the heading “SYSTEM OF PAYMENT OF WAGES”.

Substitution of section 25

7. The principal Act is amended by substituting for section 25 the following section:

“Wages to be paid through bank

25. (1) The entire amount of wages earned by, or payable to, any employee in respect of any work done by him less any lawful deductions, shall be actually paid to him through payment into an account at a bank, finance company, financial institution or other institutions licensed or established under the Banking and Financial Institutions Act 1989 [Act 372] or any other written law, in any part of Malaysia being an account in the name of the employee or an account in the name of the employee jointly with one or more other persons as stipulated by the employee.

(2) Every employee shall be entitled to recover in the courts so much of his wages, exclusive of sums lawfully deducted under Part IV, as shall not have been actually paid to him in accordance with subsection (1).”

Amendment of section 25a

8. The principal Act is amended by substituting for section 25a the following section:

“Payment of wages other than through bank

25a. (1) Notwithstanding subsection 25(1), an employer may, upon a written request of the employee, other than a domestic servant, make payment of his employee’s wages—

(a) in legal tender; or

(b) by cheque made payable to or to the order of the employee.

(2) In the case of a domestic servant, the employer shall, upon the request of his domestic servant, obtain approval from the Director General for the payment of wages of the domestic servant to be paid in legal tender or by cheque.

(3) The request by the employee under subsections (1) and (2) may be withdrawn by the employee at any time, by notice in writing, to the employer.

(4) The notice referred to in subsection (3) shall take effect at, but not before, the end of the period of four weeks beginning with the day on which the notice is given.

(5) The request of the employee to the mode of payment of wages under subsections (1) and (2) shall not be unreasonably withheld by the employer.

(6) Any dispute arising out of the request by the employee under subsections (1) and (2) shall be referred to the Director General whose decision on the matter shall be final.

(7) Section 69 shall not apply in respect of any dispute under subsection (6).”.

Amendment of section 31

9. Section 31 of the principal Act is amended by substituting for the words “sub-contractor for labour”, wherever they may appear, the words “contractor for labour”.

Amendment of Part VII

10. Part VII of the principal Act is amended by substituting for the heading “CONTRACTORS AND PRINCIPALS” the heading “CONTRACTORS, PRINCIPALS AND CONTRACTORS FOR LABOUR”.

New section 33a

11. The principal Act is amended by inserting after section 33 the following section:

“Information relating to supply of employees

33a. (1) A contractor for labour who intends to supply or undertakes to supply any employee shall register with the Director General in the prescribed form within fourteen days before supplying the employee.

(2) If a contractor for labour referred to in subsection (1) supplies any employee, he shall keep or maintain one or more registers containing information regarding each employee supplied by him and shall make such registers available for inspection.

(3) A contractor for labour who—

(a) supplies his employee without registering with the Director General as required under subsection (1); or

(b) fails to keep or maintain any register, or make available any register for inspection as required under subsection (2),

commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.”.

Amendment of section 37

12. Section 37 of the principal Act is amended—

(a) by substituting for paragraph (1)(a) the following paragraph:

“(1)(a) Every female employee shall be entitled—

(i) to maternity leave for an eligible period in respect of each confinement; and

(ii) subject to this Part, to receive from her employer a maternity allowance to be calculated or prescribed as provided in subsection (2) in respect of the eligible period.”;

(b) in paragraph (1)(aa), by substituting for the words “paragraph (a)” the words “subparagraph (a)(i)”;

(c) in paragraph (1)(c), by substituting for the words “paragraph (a)” the words “subparagraph (a)(ii)”;

(d) by substituting for paragraph (1)(d) the following paragraph:

“(d) For the purposes of this Part—

(i) “children” means all natural children, irrespective of age; and

(ii) “eligible period” means a period of maternity leave of not less than sixty consecutive days.”;

(e) by substituting for paragraph (2)(a) the following paragraph:

“(2)(a) A female employee shall be entitled to receive maternity allowance for the eligible period from her employer if—

(i) she has been employed by the employer for a period of, or periods amounting in the aggregate to, not less than ninety days during the nine months immediately before her confinement; andBill 8

(ii) she has been employed by the employer at any time in the four months immediately before her confinement;”; and

(f) by inserting after subsection (3) the following subsection:

“(4) Any employer who terminates the service of a female employee during the period in which she is entitled to maternity leave commits an offence:

Provided that for the purpose of this section, such termination shall not include termination on the ground of closure of the employer’s business.”.

Amendment of section 40

13. Section 40 of the principal Act is amended by deleting subsection (3).

Amendment of section 42

14. Subsection 42(2) of the principal Act is amended by substituting for the words “a female employee is dismissed from her employment” the words “the service of a female employee is terminated”.

New section 44a

15. The principal Act is amended by inserting after section 44 the following section:

“Application of this Part irrespective of wages of female employee

44a. Notwithstanding paragraph 1 of the First Schedule, thisPart extends to every female employee who is employed under a contract of service irrespective of her wages.”.

New sections 57a and 57b

16. The principal Act is amended by inserting after section 57 the following sections:

“Employment of foreign domestic servant

57a. (1) An employer who employs a foreign domestic servant shall, within thirty days of the employment, inform the Director General of such employment in a manner as may be determined by the Director General.

(2) An employer who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.

Duty to inform Director General of termination of service of foreign domestic servant

57b. (1) If the service of a foreign domestic servant is terminated—

(a) by the employer;

(b) by the foreign domestic servant;

(c) upon the expiry of the employment pass issued by the Immigration Department of Malaysia to the foreign domestic servant; or

(d) by the repatriation or deportation of the foreign domestic servant,

the employer shall, within thirty days of the termination of service, inform the Director General of the termination in a manner as may be determined by the Director General.

(2) For the purpose of paragraph (1)(b), the termination of service by a foreign domestic servant includes the act of the foreign domestic servant absconding from his place of employment.

(3) An employer who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.”.

Amendment of section 59

17. Subsection 59(1) of the principal Act is amended in the proviso by substituting for the words “Employees Social Security Act 1969 [Act 4]” the words “Employees’ Social Security Act 1969”.

Amendment of section 60

18. Paragraph 60(3)(b) of the principal Act is amended by inserting after the word “monthly” the words “or weekly”.

Amendment of section 60d

19. Section 60d of the principal Act is amended—

(a) in subsection (1)—

(i) by substituting for the words “a this” the words “at his”;

(ii) in paragraph (a)—

(A) by substituting for the word “ten” the word “eleven”;

(B) by substituting for the word “four” the word “five”;

(C) in subparagraph (iii), by deleting the word “and” appearing at the end of the subparagraph; and

(D) by inserting after subparagraph (iv) the following subparagraph:

“(v) Malaysia Day; and”;

(iii) by substituting for paragraph (b) the following paragraph:

“(b) on any day appointed as a public holiday for that particular year under section 8 of the Holidays Act 1951 [Act 369]”; and

(iv) by substituting for the proviso to subsection (1) the following proviso:

“Provided that if any of the public holidays referred to in paragraphs (a) and (b) falls on—

(i)                             a rest day; or

(ii)                           (ii) any other public holiday referred to in paragraphs (a) and (b),

the working day following immediately the rest day or the other public holiday shall be a paid holiday in substitution of the first mentioned public holiday.”; and

(b) in paragraph (3)(aaa), by deleting the word “in” appearing after the word “referred”.

Amendment of section 60i

20. Section 60i of the principal Act is amended—

(a) in subsection (1c), by inserting after the words “on a daily” the words “or an hourly”; and

(b) in subsection (1d), by inserting after the words “on a daily” the words “or an hourly”.

Amendment of section 60k

21. Section 60k of the principal Act is amended—

(a) in subsection (1), by substituting for the words “the nearest office of the Director General with the particulars of the foreign employee” the words “the Director General with the particulars of the foreign employee by forwarding the particulars to the nearest office of the Director General”; and

(b) by inserting after subsection (2) the following subsections:

“(3) If the service of a foreign employee is terminated—

(a) by the employer;

(b) by the foreign employee;

(c) upon the expiry of the employment pass issued by the Immigration Department of Malaysia to the foreign employee; or

(d) by the repatriation or deportation of the foreign employee,

the employer shall, within thirty days of the termination of service, inform the Director General of the termination in a manner as may be determined by the Director General.

(4) For the purpose of paragraph (3)(b), the termination of service by a foreign employee includes the act of the foreign employee absconding from his place of employment.

(5) An employer who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.”.

Amendment of section 69

22. Section 69 of the principal Act is amended in paragraph (2)(ii)—

(a) by substituting for the words “sub-contractor for labour”, wherever they may appear, the words “contractor for labour”; and

(b) by substituting for the word “subcontractor” the word “sub-contractor”.

Amendment of section 69b

23. Subsection 69b(1) of the principal Act is amended by substituting for the words “one thousand five hundred” the words “two thousand”.

Amendment of section 73

24. Subsection 73(1) of the principal Act is amended by substituting for the words “sub-contractor for labour” and “subcontractor for labour” the words “contractor for labour”.

Amendment of section 77

25. Subsection 77(1) of the principal Act is amended by substituting for the words “or 73” the words “,73 or subsection 81d(4)”.

Amendment of section 79

26. Subsection 79(1) of the principal Act is amended by substituting for the words “Electricity Act 1949 [Act 116]” the words “Electricity Supply Act 1990 [Act 447]”.

New Part XVa

27. The principal Act is amended by inserting after Part XV the following Part:

“Part XVa

SEXUAL HARASSMENT

Interpretation

81a. For the purposes of this Part, “complaint of sexual harassment” means any complaint relating to sexual harassment made—

(i) by an employee against another employee;

(ii) by an employee against any employer; or

(iii)             by an employer against an employee.

Inquiry into complaints of sexual harassment

81b. (1) Upon receipt of a complaint of sexual harassment, an employer or any class of employers shall inquire into the complaint in a manner prescribed by the Minister.

(2) Subject to subsection (3), where an employer refuses to inquire into the complaint of sexual harassment as required under subsection (1), he shall, as soon as practicable but in any case not later than thirty days after the date of the receipt of the complaint, inform the complainant of the refusal and the reasons for the refusal in writing.

(3) Notwithstanding subsection (2), an employer may refuse to inquire into any complaints of sexual harassment as required under subsection (1), if—

(a) the complaint of sexual harassment has previously been inquired into and no sexual harassment has been proven; or

(b) the employer is of the opinion that the complaint of sexual harassment is frivolous, vexatious or is not made in good faith.

(4) Any complainant who is dissatisfied with the refusal of the employer to inquire into his complaint of sexual harassment, may refer the matter to the Director General.

(5) The Director General after reviewing the matter referred to him under subsection (4)—

(a) if he thinks the matter should be inquired into, direct the employer to conduct an inquiry; or

(b) if he agrees with the decision of the employer not to conduct the inquiry, inform the person who referred the matter to him that no further action will be taken.

Findings of inquiry by employer

81c. (1) Where the employer conducts an inquiry into a complaint of sexual harassment received under subsection 81b(1) and the employer is satisfied that sexual harassment is proven, the employer shall—

(a) in the case where the person against whom the complaint of sexual harassment is made is an employee, take disciplinary action which may include the following:

(i) dismissing the employee without notice;

(ii) downgrading the employee; or

(iii) imposing any other lesser punishment as he deems just and fit, and where the punishment of suspension without wages is imposed, it shall not exceed a period of two weeks; and

(b) in the case where the person against whom the complaint of sexual harassment is made is a person other than an employee, recommend that the person be brought before an appropriate disciplinary authority to which the person is subject to.

Complaints of sexual harassment made to the Director General

81d. (1) If a complaint of sexual harassment is made to the Director General, the Director General shall assess the complaint and may direct an employer to inquire into such complaint.

(2) The employer shall inquire into the complaint of sexual harassment when directed to do so under subsection (1) and submit a report of the inquiry to the Director General within thirty days from the date of such direction.

(3) If a complaint of sexual harassment received by the Director General is made against an employer who is a sole proprietor, the Director General shall inquire into such complaint himself in a manner prescribed by the Minister.

(4) Upon inquiry by the Director General of the complaint of sexual harassment under subsection (3), the Director General shall decide if sexual harassment is proven or not and such decision shall be informed to the complainant as soon as practicable.

(5) Notwithstanding subsection (3), the Director General may refuse to inquire into any complaint of sexual harassment received under subsection (3), if—

(a) the complaint of sexual harassment has previously been inquired into by the Director General and no sexual harassment has been proven; or

(b) the Director General is of the opinion that the complaint of sexual harassment is frivolous, vexatious or is not made in good faith.

(6) Where the Director General refuses to inquire into the complaint of sexual harassment received under subsection (3), he shall, as soon as practicable but in any case not later than thirty days after the date of the receipt of the complaint, inform the complainant of the refusal and the reasons for the refusal in writing.

Effects of decisions of the Director General

81e. (1) Where the Director General decides under subsection 81d(4) that sexual harassment is proven, the complainant may terminate his contract of service without notice.

(2) If the complainant terminates the contract of service under subsection (1), the complainant is entitled to—

(a) wages as if the complainant has given the notice of the termination of contract of service; and

(b) termination benefits and indemnity,

as provided for under the Act or the contract of service, as the case may be.

Offence

81f. Any employer who fails—

(a) to inquire into complaints of sexual harassment under subsection 81b(1);

(b) to inform the complainant of the refusal and the reasons for the refusal as required under subsection 81b(2);Employment (Amendment) 17

(c) to inquire into complaints of sexual harassment when directed to do so by the Director General under paragraph 81b(5)(a) or subsection 81d(2); or

(d) to submit a report of inquiry into sexual harassment to the Director General under subsection 81d(2);

commits an offence and shall, on conviction, be liable to a fine not exceeding ten thousand ringgit.

Application of this Part irrespective of wages of employee

81g. Notwithstanding paragraph 1 of the First Schedule, this Part extends to every employee employed under a contract of service irrespective of the wages of the employee.”.

Amendment of section 82

28. Subsection 82(1) of the principal Act is amended in paragraph (b)of the proviso by deleting the word “male”.

Amendment of section 86

29. Section 86 of the principal Act is amended by substituting for the words “section 69” the words “section 69, 69b, 69c or subsection 81d(4)”.

New section 90a

30. The principal Act is amended by inserting after section 90 the following section:

“Protection of officers

90a. No action shall lie or be brought, instituted or maintained in any court against—

(a) the Director General, Deputy Director General or any other officer duly appointed under this Act for or on account of or in respect of any act ordered or done for the purpose of carrying this Act into effect; and

(b) any other person for or on account of or in respect of any act done or purported to be done by him under the order, direction or instruction of the Director General, Deputy Director General or any other officer duly appointed under this Act,

if the act was done in good faith and in a reasonable belief that it was necessary for the purpose intended to be served by it.”.

Amendment of section 101a

31. Section 101a of the principal Act is amended—

(a) in subsection (1), by substituting for the words “or a Deputy Director General appointed under paragraph 3(2)(a)” the words “, Deputy Director General or any officer authorized in writing by the Director General”;

(b) in subsection (2), by substituting for the words “or the Deputy Director General”, wherever they may appear, the words “, Deputy Director General or any officer authorized in writing by the Director General”;

(c) in subsection (3), by substituting for the words “or the Deputy Director General” the words “, Deputy Director General or any officer authorized in writing by the Director General”; and

(d) in subsection (5), by substituting for the words “or a Deputy Director General” the words “, Deputy Director General or any officer authorized in writing by the Director General”.

New section 101b

32. The principal Act is amended by inserting after section 101a the following section:

“Offence by body corporate, etc.

101b. Where an offence under this Act has been committed by a body corporate, partnership, society or trade union—

(a) in the case of a body corporate, any person who is a director, manager, or other similar officer of the body corporate at the time of the commission of the offence;

(b) in the case of a partnership, every partner in the partnership at the time of the commission of the offence; and

(c) in the case of a society or trade union, every office-bearer of the society or trade union at the time of the commission of the offence,

shall be deemed to have committed the offence and may be charged jointly or severally in the same proceedings as the body corporate, partnership, society or trade union.”.

Amendment of section 102

33. Subsection 102(2) of the principal Act is amended—

(a) by substituting for paragraph (i) the following paragraph:

“(i) prescribing fees to be paid for filing of claims under section 69, 69b or 69c and for copies of notes of evidence recorded under Parts XV and XVa;”;

(b) in paragraph (j), by substituting for the full stop a semicolon; and

(c) by inserting after paragraph (j) the following paragraphs:

“(k) prescribing the forms of notice and returns of particulars used under section 60k;

(l) prescribing the procedure to inquire into complaints of sexual harassment under Part XVa;

(m) prescribing the terms and conditions of service of a domestic servant.”.

EXPLANATORY STATEMENT

This Bill seeks to amend the Employment Act 1955 (“Act 265”). The primary purpose of this Bill is to require the payment of wages of employees including domestic servants to be made into bank accounts, to provide for the registration of information relating to the supply of employees by a contractor for labour, to require information regarding the termination of service of foreign domestic servant and foreign employees to be submitted and to provide for the inquiry into complaints of sexual harassment.

2. Clause 1 contains the short title and the power of the Minister to appoint the commencement date of the proposed Act.

3. Clause 2 seeks to amend section 2 of Act 265 to introduce new definitions and to amend certain existing definitions used in Act 265. The definition of “confinement” is amended to enable a pregnant female employee to enjoy maternity protections under Act 265 as early as at twenty-two weeks of pregnancy should the eventualities such as premature births or miscarriages occur. Amongst the new definitions inserted are the definitions of “contractor for labour” as the person responsible for supply of employees and the definition of “sexual harassment” for the purpose of inquiry into complaints of sexual harassment under the new Part XVa of Act 265.

4. Clause 3 seeks to amend section 4 of Act 265 to include the decisions or orders made under section 69b, 69c and subsection 81d(4) as decisions or orders which cannot be appealed to the Director General by any person affected by such decisions and orders.

5. Clause 4 seeks to amend section 19 of Act 265 to give reasonable period to the employer to pay to his employees wages for working on a rest day, gazetted public holiday and during overtime, not later than the last day of the next wage period.

6. Clause 5 seeks to amend section 22 of Act 265 to extend the application of this section to allow for payment of advances to be made to the employee for various purposes such as for payment of daily expenses and other expenses necessary to support the needs of the employee and his immediate family members.

7. Clause 7 seeks to amend section 25 of Act 265 to obligate the employer to make payment of wages to the employee including the domestic servant through payment into the account of the employee at a bank, finance company, financial institution or other institutions licensed or established under the Banking and Financial Institutions Act 1989 [Act 372] or any other written law.

8. Clause 8 seeks to amend section 25a of Act 265 to provide for exception to section 25 in which the payment of wages to the employee may be made in legal tender or by cheque provided that there is a written request from the employee for such mode of payment and in the case of a domestic servant, the Director General’s approval shall be obtained by the employer.

9. Clause 11 seeks to introduce a new section 33a into Act 265 to impose a duty on the contractor for labour who intends to supply or undertakes to supply any employee to register with the Director General in the prescribed form within fourteen days before supplying the employee. It also requires the contractor for labour to keep or maintain information on the employees he supplies in a register and the register shall be made available for inspection. Violations of these requirements are offences under Act 265. The purpose of the introduction of this new section is to monitor the supply of employees by the contractor for labour.

10. Clause 12 seeks to amend section 37 to clarify the provisions relating to the entitlement of a female employee of maternity leave and maternity allowance. With this amendment, employers who terminate the service offemale employees during the period in which they are entitled to maternity leave provided that the termination is not due to the closure of the employers’ business, shall be penalized.

11. Clause 13 seeks to amend section 40 of Act 265 consequential upon the proposed amendment made to section 37 relating to the termination of service of a female employee during the period in which she is entitled to maternity leave.

12. Clause 15 seeks to introduce new section 44a into Act 265 to extend the application of Part IX to every female employee irrespective of her wages. With this amendment, every female employee who is employed under a contract of service shall be entitled to maternity leave and maternity allowance provided under Act 265 irrespective of her wages.

13. Clause 16 seeks to introduce new sections 57a and 57b into Act 265 to impose a duty on the employers to inform the Director General with regard to the employment and termination of service of their foreign domestic servants. The information obtained by the Director General would assist the Government in monitoring the employment of foreign domestic servants. Failure to inform the Director General as required under these sections are offences under Act 265.

14. Clause 18 seeks to amend paragraph 60(3)(b) of Act 265 to provide for payment of wages to employees who are paid on a weekly basis for working on a rest day.

15. Clause 19 seeks to amend section 60d of Act 265 to include Malaysia Day which falls on 16 September every year as a mandatory gazetted public holiday on which an employee shall be entitled to a paid holiday at his ordinary rate of pay. Also with this amendment, if the public holiday referred to in paragraphs 60d(1)(a) and (b) fall on another public holiday which has been given by the employer or the public holiday which has been declared by the Government under paragraphs 60d(1)(a) and (b), the working day immediately following the latter public holiday shall be a paid holiday.

16. Clause 20 seeks to amend section 60i of Act 265 to extend the calculation of the ordinary rate of pay to employees employed on an hourly rate of pay.

17. Clause 21 seeks to amend section 60k of Act 265 by inserting new subsection (3) to impose a duty on the employers to inform the Director General of the termination of service of their foreign employees. The information obtained by the Director General under this section would assist the Government in monitoring the employment of foreign employees. Failure to inform the Director General as required under this subsection is an offence under Act 265.

18. Clause 22 seeks to amend section 69 of Act 265 consequential upon the proposed amendment made to the definition of “contractor” and “sub-contractor for labour”.

19. Clause 23 seeks to amend subsection 69b(1) to increase the limit of wages of employees from one thousand five hundred ringgit per month to two thousand ringgit per month for the purpose of inquiry into complaints by the Director General.

20. Clause 27 seeks to introduce a new Part XVa into Act 265 which deals with complaints of sexual harassment. Section 81a clarifies the meaning of the term “complaint of sexual harassment”. Section 81b imposes a duty upon an employer to inquire into a complaint of sexual harassment in a manner prescribed by the Minister. Section 81c deals with findings of the inquiry into complaint of sexual harassment by the employer. Section 81d deals with complaints of sexual harassment which are made directly to the Director General and his decisions on the complaints of sexual harassment. By virtue of this section, if the complaints are made against an employer who is a sole proprietor, the Director General shall inquire into the complaints himself in a manner prescribed by the Minister and the decisions made by the Director General under this section shall be informed to the complainant as soon as practicable. Section 81e provides for effects of the decisions made by the Director General if the Director General decides that sexual harassment is proven. Section 81f deals with offences under this Part whilst section 81g provides that this Part shall apply to all employees irrespective of their wages.

21. Clause 28 seeks to amend section 82 of Act 265 to be in line with the provisions under the Criminal Procedure Code with regard to the service of summons.

22. Clause 29 seeks to amend section 86 of Act 265 consequential upon the proposed amendment made to section 4.

23. Clause 30 seeks to introduce a new section 90a into Act 265 to provide for the protection of officers appointed under Act 265 from any legal action in respect of any acts done whilst carrying out their duties in good faith.Employment (Amendment) 23

24. Clause 31 seeks to amend section 101a of Act 265 to empower officers other than the Director General and the Deputy Director General to compound any offence committed under Act 265, provided that they are authorized in writing by the Director General to do so.

25. Clause 32 seeks to introduce a new section 101b into Act 265 to make directors, managers, partners and trade union office-bearers to be jointly or severally liable for any offences committed by their establishment.

26. Clause 33 seeks to amend section 102 of Act 265 to empower the Minister to make regulations on matters relating to fees, the employment of foreign employees specifically under section 60k, matters relating to the inquiry into complaints of sexual harassment and terms and conditions of service of a domestic servant.

27. Other amendments not specifically dealt with in this Statement are minor or consequential in nature.

FINANCIAL IMPLICATIONS

This Bill will not involve the Government in extra financial expenditure.

[PN(U²) 2776]