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Labour Law vs HR Policy

CK Kong
Tue, 22 Sep 2009 04:57:29 PM

In general, the Malaysian Labour Law is enacted in accordance with the following:

  • Employment Act 1955
  • Employment regulations 1957
  • Human Resources Development Act 1992
  • Industrial Relations Act
  • Trade Union Act 1959
  • Sabah Labour Odinance
  • Sarawak labour Ordinance

Employment Act 1955 in particular, has usually been referred as the yard stick to the lawful and rightful practices when tackling employment disputes. It has also been widely used by most companies as the framework for developing a set of company's HR policy. In many cases of employment disputes, the company's HR policy has been under the stringent challenge of the Labour Law despite the fact that there are limitations to the enactment of the Labour Law, which leave a number of employment disputes falling in the grey area and remain ambiguous.

Apart from the Labour Law, the enforcement of HR policy by the individual company is equally important in order to bridge the grey areas under the statutory provision.

For example: 

1)       An employee of a MNC earning RM1,500 was later receiving his salary in foreign currency which appreciated his salary to be above RM1,500 due to the currency exchange rate. Is he still under the coverage of the Employment Act 1955?

2)       How lawful is a domestic inquiry conducted in an informal manner by the members of the panel of inquiry who are at a relatively low education level, or do not have adequate knowledge in the general legislation involving employment and the Industrial Court awards?

In view of that, the enforcement of a set of company's HR policy is imperative to clearly define the rules, procedures and obligations for the employees at all levels under all circumstances. Nevertheless, the clauses of the Labour Law remain prevailing in the cases of discrimination, such as Part IX – Maternity Protection of Employment Act 1955.

Always bear in mind that, when an employment dispute evolves into litigation, apart from statutory law, common law which scrutinizes the scenario on a case to case basis will be given equal weight; where it is likely, but not a must, to award the cases based on the judgments of the precedent cases. Therefore, whatever stated in Law may not be the sole consideration for the judgment of the individual cases.

As a conclusion, let’s make sure we have a set of company's HR policy which conforms with Labour Law without overlooking the necessity of the individual company or industry, in order to serve as a fair guideline to help building everyone within a company rather than being treated as a controversial book of punishment.

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