Highlights of the Employment (Amendment) Bill 2021

THE Employment (Amendment) Bill 2021 to amend the Employment Act 1955 was recently tabled in Parliament. A summary of the proposed amendments are:


There will be an increase in the general penalty imposed from RM10,000 to RM50,000 for any offence where there is no express penalty prescribed under the Act.


A formula is proposed for the calculation of wages where an employee has not completed a whole month of service:

Monthly wages

_______________________________________ x Number of days eligible in the wage period

Number of days of the wage period

Foreign employees

Employment of foreign employees will require the prior approval of the Director-General of Labour (DG) and will require the employer’s compliance with laws related to social security, minimum wages, housing standards, human trafficking and forced labour. Where there is termination of such employee, the employer must inform the DG within a prescribed time.

Contractor for labour

The Bill requires a contractor for labour (a manpower service provider) to enter a written contract and to make such contract available for inspection.

Statutory presumption

In the absence of a written contract, a person will be statutorily presumed to be an employee where:

> his manner or hours of work are subject to control by another person;

> he is provided materials or equipment to execute his work;

> his work constitutes an integral part of another person’s business;

> his work is performed solely for the benefit of another person; or

> payment is made to him for work done at regular intervals and it constitutes the majority of his income.

Working hours and sick leave

Normal working hours will be reduced from 48 hours to 45 hours per week.

Employees will be entitled to 60 days of paid annual hospitalisation leave – separate from and in addition to the annual sick leave which is part of their employment contract.

Work arrangement

Employees may apply for “flexible work arrangements” to vary their hours, days or place of work, subject to the terms of their contracts. The employer must approve or refuse the application within 60 days.


The DG can inquire into disputes relating to discrimination in employment. Failure to comply with any order made is an offence.

Forced labour

Any employer who threatens, deceives, or forces an employee to do any activity or work, and prevents that employee from leaving the place or area where such activity or work is done, will commit an offence.

Inquiry on wages

Currently, the DG may inquire into disputes relating to wages due to an employee who earns a monthly wage of up to RM5,000. The proposed removal of Section 69B will limit such inquiry only to employees covered under the First Schedule (EA Employees) and not all employees. EA Employees include employees whose monthly wages do not exceed RM2,000 and other limited categories of employees including those involved in manual labour, etc. irrespective of their monthly wages.

There is some concern that this will narrow the scope of assistance that the DG will be able to provide to those in need.

Does this Bill benefit women?

The Bill seeks to lift any prohibition on employing females for night work, underground work, etc.

Further, maternity leave benefit will be extended from 60 to 90 days, and it will be an offence for employers to terminate the employment of a pregnant employee except on grounds of misconduct, breach of employment contract or business closure. Such narrow grounds may affect businesses that wish to pursue a genuine redundancy exercise which may involve a pregnant employee.

Section 44A which currently provides maternity benefits for all female employees irrespective of the amount of their wages will be deleted. The implication is that female employees with monthly wages exceeding RM2,000 (or who are not EA Employees) will no longer enjoy statutory maternity benefits. There is some concern about the removal of this provision as it may disadvantage an entire group of individuals.

Paternity leave

Married male employees will be entitled to three days’ paid paternity leave.

Sexual Harassment

Employers are required to exhibit notices in the workplace to raise awareness about sexual harassment.

Section 81G of the Act, which currently extends sexual harassment protection provisions to every employee (irrespective of their wages) will be deleted. This will limit the protection conferred at law to only EA Employees and not to all employees.


The proposed deletions of Section 69B (inquiry on wage disputes), Section 44A (maternity), and Section 81G (sexual harassment) are points of concern.

The Bill ought to be revised to expand existing protection to all employees irrespective of the amount of their wages, rather than limit them to only EA Employees.

This article was contributed by Kelvin Kho (with assistance of Larissa Teoh) of Christopher & Lee Ong.