Kuala Lumpur, 10 January 2019 – The Ministry of Human Resources has publicly released their proposed amendments to Malaysia’s Labour legislations Employment Act 1955, Trade Unions Act 1959 and the Industrial Relations Act 1967. These proposed amendments are now available for public commentary and many of them are significant for their potential impact on the business environment and the labour market.  

Commenting on the amendments proposed under the Employment Act 1955 (Act 265), IDEAS CEO Ali Salman noted that labour market regulations influence the business environment significantly. He said that the amendments to end any kind of discrimination on the basis of gender, race or religion and to end forced labour are welcome. However, he noted that the proposed amendments to increase the role of the government in the pre-employment phase by encouraging the job seekers to approach the government for registration and by asking the private sector to seek government permission before organizing job affairs are unwanted.  

Ali also noted that allowing night work for female employees while ensuring their safety is a welcome step. Commenting on the proposed increase of maternity leave from the current 60 days to a minimum of 98 consecutive days will increase the cost of doing business, Ali noted.

The proposed amendments also introduce a stipulated mechanism for flexible work hours. Ali maintains that these arrangements should be left between the employer and employee instead of defining all kinds of unnecessary rules and regulations. Ali notes that the amendments not only bind the employee and employers to approvals by the labour department but also to workers unions thus restraining the freedom to work. The proposed amendments stipulate that any employer who refuses an employee to shift to a flexible work arrangement will be deemed to have committed an offence.  

Commenting on the shortage of foreign labour, Ali Salman said that the amendments are likely to exacerbate the shortage by making the approval process more difficult.   

Commenting on the proposed amendments in the Trade Unions Act 1959, Ali Salman recognised that trade unions are an important part of the labour market however an increased influence of trade unions may work against the individual interests of both employees and employers. He noted that the current legislation grants a degree of discretion to the director general to approve or not approve trade unions however the amendments will make it obligatory for the director general to approve all applications of trade unions, including duplicative applications of trade unions from the same firms.  

CEO of IDEAS Ali Salman has urged the government to conduct thorough and meaningful consultation as well as an impact analysis before legislating these amendments.