What unintended consequences may arise from recent Employment Act amendments?

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Unintended Consequences May Arise from Recent Employment Act Amendments

Recent amendments to Malaysia's Employment Act 1955 have introduced potential complications due to alterations in its provisions. A significant concern centres on the definition of an "employee" within the First Schedule. This schedule defines an employee as an individual whose wages do not exceed RM2,000 per month, a definition that has not been amended.
Gaps in Employee Definition and Entitlements

The continued use of the RM2,000 wage threshold in the First Schedule could inadvertently exclude a segment of the workforce from the Act's protections and benefits. If the definition remains unchanged, entitlements, benefits, and protections stipulated under the Employment Act might only apply to those earning RM2,000 or less. This could leave individuals earning above this threshold without access to newly enhanced provisions.
Impact on Maternity and Paternity Leave

A direct consequence of the unamended employee definition could be that employees earning over RM2,000 may not be entitled to the recently agreed-upon maternity leave of 98 days and paternity leave of seven days. Without a clear amendment to the definition of who qualifies for these benefits, companies might continue to adhere to the previous 60-day maternity leave, failing to implement the extended 38 days. This situation would persist until a Ministerial Order is issued to address these discrepancies.
Exclusion from Protection Against Pregnancy Discrimination

Furthermore, the proposed Section 41A, which aims to prohibit the termination of female employees due to pregnancy, may also fail to cover those earning above RM2,000. This gap in coverage would mean that a significant portion of the female workforce might not receive protection against pregnancy-related dismissals, even with the Act's stated intentions. The absence of a revised definition for "employee" could render these new protections legally inapplicable to higher earners.

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What unintended consequences may arise from recent Employment Act amendments?

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