Littler Global Guide - Malaysia - Q4 2021

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Occupational Safety and Health Law

New Legislation Enacted

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On December 13, 2021, the Malaysian Parliament passed a legislative amendment (the Bill) to the Occupational Safety and Health Act 1994 (the Act). The amendment will become effective once it receives Royal Assent and is gazetted by the Government. The amendment will extend the application of the Act to all workplaces throughout Malaysia including in the public services and statutory authorities. The amendment will also make it mandatory for employers to formulate Occupational Safety and Health policies for their respective workplaces; for principal employers to ensure, as far as practicable, the safety of contractors and sub-contractors including those employed by them.

The amendment will also give employees the right to remove themselves from danger or the work in the event the employer fails to take action to remove such danger after being informed by the employee. Finally, the amendment also includes increased penalties and jail sentences for several offences under the Act.

Hiring Incentives by the Government

New Legislation Enacted

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On December 21, 2021, Budget 2022 was passed by the Parliament and amongst others includes a hiring incentive for employers who hire Malaysians who have not been actively employed. The incentive will consist of 20% of the monthly salary for the first six months and 30% for the next six months, subject to jobs with a salary of RM1,500 and above. As an incentive for targeted groups, such as the disabled, Indigenous people, ex-convicts, single mothers, housewives, and women who have been unemployed for more than 365 days, the Government will provide an incentive of 30% of the monthly salary for the first six months and 40% for the next six months for hiring from these categories, subject to jobs with a salary of RM1,200 and above.

Federal Court on Justifying Dismissal Before Industrial Court

Precedential Decision by Judiciary or Regulatory Agency

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On October 22, 2021, the Federal Court of Malaysia held that the Industrial Court does not have the right to inquire into reasons subsequently advanced by the employer to justify the dismissal via pleadings at the hearing stage of the inquiry before the Industrial Court. The employer is entitled to establish just cause or excuse in relation to the dismissal, but such cause or excuse is circumscribed to the time immediately prior to the dismissal. However, the employer may still adduce evidence and facts discovered post dismissal to counter the remedy afforded to the employee although it may not go to the basis or reason for the dismissal because it was not known at the particular time of dismissal.

Double-Deduction for Expenses Incurred in 2021 for COVID-19 Tests for Employees

New Regulation or Official Guidance

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On October 20, 2021, the Income Tax (Deduction for Expenses in relation to the Cost of Detection Test of Coronavirus Disease 2019 (COVID-19) for Employees) Rules 2021 (the Rules) came into force. The Rules allow for the cost of detection test of COVID-19 for employees within the period from January 1, 2021 to December 31, 2021 incurred by an employer who is resident in Malaysia to be claimed as a deduction for the purpose of ascertaining the adjusted income of that employer from its business in a basis period for a year of assessment.

The Rules further provide that the amount of deduction allowed under the Rules is an addition to any deduction allowed for cost of the COVID-19 Detection Test under section 33 of the Income Tax Act 1967. This means that a double deduction will be allowed for expenses incurred by an employer in COVID-19 Detection Tests carried out on its employees.

New Anti-Sexual Harassment Law and Establishment of the Tribunal for Anti-Sexual Harassment

Proposed Bill or Initiative

Authors: Selvamalar Alagaratnam, Partner, and Teng Wei Hun, Associate – Skrine

On December 15, 2021, a bill titled, Anti-Sexual Harassment Bill 2021 (the Bill) was tabled in the lower house of the Malaysian Parliament. The Bill seeks to set up the Tribunal for Anti-Sexual Harassment (Tribunal) and the office of Administrator of Anti-Sexual Harassment. The Bill, if passed, will see the Tribunal vested with the jurisdiction to hear and determine any complaint of sexual harassment made by any person, including an employee, and to make an award which includes an order for compensation or damages. The Bill also proposes that any non-compliance with the award will be punishable with a fine and/or imprisonment.

The second reading of the Bill will take place during the parliamentary session in 2022 where the Bill will be debated by members of Parliament.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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