© The Star (Used by permission)
Putik Lada
By Marian Lee Lai Sim
Reforms are needed in the Employment and Industrial Relations Acts to protect more Malaysian employees.
IN reality, does an employee have any bargaining power with an employer company? Does our nation provide adequate recourse for an employee from financially powerful employers?
In most cases, employees are hired subject to terms and conditions set by the employers on a “take it or leave it” basis.
For many reasons, employees rarely pursue their legal rights when they find themselves in situations of industrial dispute.
Firstly, in many cases this is due to ignorance and lack of awareness of their legal rights.
Secondly, there is the lack of time. For most employees, it is a “dog–eat–dog” world out there, and there is already barely sufficient time to earn a decent living in the daily rat race.
It is well known that in this country, any legal pursuit takes years to reach the day the court/adjudicator delivers its decision. To make matters worse, the longer the time the legal pursuit takes, the more the legal fees escalate. So most employees choose to “give it up” rather than pursue their legal rights.
Thirdly, it is my view that legislation in Malaysia in regard to employees is inadvertently limited.
In peninsular Malaysia, the governing laws for the labour force are the Employment Act, 1955 (EA) and Industrial Relations Act, 1967 (IRA).
Irrespective of occupation, EA provisions cover a person who has entered into a contract of service with an employer under which the person’s wages do not exceed RM1,500 per month.
The EA sets out the basic minimum requirements which an em–ployer company has to comply with in terms of annual leave, payment of wages and termination benefits.
If an employer does not provide the minimum requirements or dismisses his employee without just cause or notice, or fails to pay wages on time, the aggrieved employee (whose wages do not exceed RM1,500.00 per month) may lodge a complaint with the Director–General of Labour at the nearest Labour Office at no cost to claim indemnity.
The Labour Department has set up a Labour Court to settle disputes/complaints by aggrieved employees (covered under the EA).
Parties who are not satisfied with the decision of the Labour Court may file an appeal to the High Court.
However, with inflation over the years, the wage ceiling of RM1,500 per month for protection under the EA is not reflective of the average wage in the current labour market.
The average monthly income for most white collar workers these days easily exceeds RM1,500, and so they are not protected by the EA.
In such circumstances most em–ployees would have no recourse to the Labour Court, so their only other avenue for grievances is the IRA.
Unlike the EA, the IRA does not provide the minimum requirements for employment contracts, nor termination benefits. The only recourse available under the IRA for an aggrieved employee would be when he or she has been unfairly dismissed.
The aggrieved employee in any alleged unfair dismissal case has to first lodge a written representation to the Director–General at the Industrial Relations Department.
Upon receipt of the representation, the Director–General will then try to resolve the dispute through reconciliation between the employer and employee.
If that fails, the Minister of Human Resources will be notified to determine whether to refer the dispute to the Industrial Court for a decision.
Although there is no cost payable at the Industrial Court and the parties may be heard there without legal representation, in most cases employees with very little legal knowledge would end up incurring legal fees in appointing lawyers to represent them, especially when the onus is on them to prove a case of unfair dismissal.
Even if the employee is fortunate enough to find legal representation with minimal fees and obtain a favourable judgment, reinstatement to the former job position (the only remedy provided under the IRA) may not always be possible, especially when the relationship had been strained by the legal battle.
In such circumstances, the Industrial Court has over the years awarded compensation in lieu of reinstatement.
However, an award for compensation may at times prove unfeasible as well. There are instances in which the employer company has closed down, leaving few if any assets to pay the employee with, or the employer simply refuses to pay.
The employee may of course continue to pursue enforcement of the judgment by way of winding up the employer company or obtaining a seizure and sale order.
But this also means spending more money and enduring another long journey in a new legal battle by the poor employee.
The questions which arise are, firstly, whether there should be separate legislation to resolve the grievances of employees with different amounts of wages. Why is it that only employees who earn less than RM1,500 per month are entitled to protection under the EA?
Further, in terms of industrial disputes under the IRA, the IRA does not provide any basis of calculating the award of compensation in lieu of reinstatement, and in this res–pect there is no certainty that an aggrieved employee who has proven his case of unfair dismissal would be entitled to compensation on a scale which applies across the board.
The current legislation forces aggrieved employees to seek legal consultation so that they know their rights, which is complicated, confusing and time–consuming.
The rights of the majority of faithful and diligent workers must not be neglected as a penalty for the mischief of the minority who deserves to lose their job because of poor performance.
Perhaps it is time to revisit the laws in this area to set an adequate, practical and sensible means to protect the rights of the labour force in this country.
The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column — a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit www.malaysianbar.org.my/nylc.
Secondly, there is the lack of time. For most employees, it is a “dog–eat–dog” world out there, and there is already barely sufficient time to earn a decent living in the daily rat race.
It is well known that in this country, any legal pursuit takes years to reach the day the court/adjudicator delivers its decision. To make matters worse, the longer the time the legal pursuit takes, the more the legal fees escalate. So most employees choose to “give it up” rather than pursue their legal rights.
Thirdly, it is my view that legislation in Malaysia in regard to employees is inadvertently limited.
In peninsular Malaysia, the governing laws for the labour force are the Employment Act, 1955 (EA) and Industrial Relations Act, 1967 (IRA).
Irrespective of occupation, EA provisions cover a person who has entered into a contract of service with an employer under which the person’s wages do not exceed RM1,500 per month.
The EA sets out the basic minimum requirements which an em–ployer company has to comply with in terms of annual leave, payment of wages and termination benefits.
If an employer does not provide the minimum requirements or dismisses his employee without just cause or notice, or fails to pay wages on time, the aggrieved employee (whose wages do not exceed RM1,500.00 per month) may lodge a complaint with the Director–General of Labour at the nearest Labour Office at no cost to claim indemnity.
The Labour Department has set up a Labour Court to settle disputes/complaints by aggrieved employees (covered under the EA).
Parties who are not satisfied with the decision of the Labour Court may file an appeal to the High Court.
However, with inflation over the years, the wage ceiling of RM1,500 per month for protection under the EA is not reflective of the average wage in the current labour market.
The average monthly income for most white collar workers these days easily exceeds RM1,500, and so they are not protected by the EA.
In such circumstances most em–ployees would have no recourse to the Labour Court, so their only other avenue for grievances is the IRA.
Unlike the EA, the IRA does not provide the minimum requirements for employment contracts, nor termination benefits. The only recourse available under the IRA for an aggrieved employee would be when he or she has been unfairly dismissed.
The aggrieved employee in any alleged unfair dismissal case has to first lodge a written representation to the Director–General at the Industrial Relations Department.
Upon receipt of the representation, the Director–General will then try to resolve the dispute through reconciliation between the employer and employee.
If that fails, the Minister of Human Resources will be notified to determine whether to refer the dispute to the Industrial Court for a decision.
Although there is no cost payable at the Industrial Court and the parties may be heard there without legal representation, in most cases employees with very little legal knowledge would end up incurring legal fees in appointing lawyers to represent them, especially when the onus is on them to prove a case of unfair dismissal.
Even if the employee is fortunate enough to find legal representation with minimal fees and obtain a favourable judgment, reinstatement to the former job position (the only remedy provided under the IRA) may not always be possible, especially when the relationship had been strained by the legal battle.
In such circumstances, the Industrial Court has over the years awarded compensation in lieu of reinstatement.
However, an award for compensation may at times prove unfeasible as well. There are instances in which the employer company has closed down, leaving few if any assets to pay the employee with, or the employer simply refuses to pay.
The employee may of course continue to pursue enforcement of the judgment by way of winding up the employer company or obtaining a seizure and sale order.
But this also means spending more money and enduring another long journey in a new legal battle by the poor employee.
The questions which arise are, firstly, whether there should be separate legislation to resolve the grievances of employees with different amounts of wages. Why is it that only employees who earn less than RM1,500 per month are entitled to protection under the EA?
Further, in terms of industrial disputes under the IRA, the IRA does not provide any basis of calculating the award of compensation in lieu of reinstatement, and in this res–pect there is no certainty that an aggrieved employee who has proven his case of unfair dismissal would be entitled to compensation on a scale which applies across the board.
The current legislation forces aggrieved employees to seek legal consultation so that they know their rights, which is complicated, confusing and time–consuming.
The rights of the majority of faithful and diligent workers must not be neglected as a penalty for the mischief of the minority who deserves to lose their job because of poor performance.
Perhaps it is time to revisit the laws in this area to set an adequate, practical and sensible means to protect the rights of the labour force in this country.
The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column — a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, visit www.malaysianbar.org.my/nylc.