Malaysia Employment Relations

Introduction and Overview of the Country

Malaysia, located at south-east Asia, consisting of two geographical regions separated by the South China Sea: Peninsular Malaysia (West Malaysia) and Malaysian Borneo (East Malaysia) (nationsonline.org, n.d.). West Malaysia shares the borders with Thailand, Singapore, Vietnam, and Indonesia (nationsonline.org, n.d.). East Malaysia shares borders with Brunei, Indonesia, Philippine and Vietnam (nationsonline.org, n.d.). Malaysia covers a total area of 329,847 Km2, consisting of 13 states and three federal territories. Kuala Lumpur is the capital city of Malaysia. The population of Malaysia is estimated at 32 million in 2019 (nationsonline.org, n.d.).

Map of Malaysia (http://ontheworldmap.com/malaysia/)

According to the Department of Statistics Malaysia (2019), the Malaysian labor force was 15.3 million with an employment rate of 68% and an unemployment rate of 3.3% in 2018. The male labor force participation rate is 80.4% (9.3 million), and the female labor force participation rate is 55.2% (6 million). Moreover, high-skilled employment occupies 27.2% of Malaysian total employment, semi-skilled employment occupies 60.4%, and low-skilled employment accounts for 12.4% of Malaysian total employment.

Employment law in Malaysia is generally governed by the following Acts (Tan & Prashant, 2019):

The recognition of trade unions in Malaysia is governed by the TUA 1959 and the IRA 1967. There are 875,193 (6% of 14.5 million) workers are currently union members, and the number of unions and unionized workers are decreasing. The unions have weakened positions to support the workers through pickets, strikes or campaigns against employers. What’s more, the unions lodge complaints with relevant government institutions, which processes can last for many years (Hector, 2017).

Recruitment Practices

There are several hiring methods that can be used in Malaysia. The traditional recruitment methods are printed advertisements. And the most popular recruitment methods are online portals, and social media recruiting. Moreover, the internal transfer, referral program, on-campus hiring, the social/business network, and recruitment agencies are other alternative methods for recruitment.

Top online job search sites are below (Mudhakkir, 2017):

  • JobStreet
    • considered as the largest online employment company in Southeast Asia
  • Monster
    • Paid job postings start at USD118
  • MauKerja
    • Paid job postings start at RM400
  • SPA Malaysia
    • A portal owned by Malaysia government
  • Glassdoor
  • LinkedIn
  • Indeed

Selection Practices

Malaysia organizations follow the Western practice of selecting managerial employees from both internal sources and external sources. The internal sources are promoted employees or transferred employees, whereas the external sources are candidates from the outside of the company (Othman, 2001).

Malaysia organizations preferred to use the hurdle approach, which applicants have to meet minimum requirements in order to the next stages. Applicants who don’t meet the requirements are not qualified for further consideration. Compare to the multiple regression approach, the hurdle method is to save more costs and shorten the process of selection (Othman, 2001).

The preferred tools using for selection in Malaysia are interviews, resume, application forms, biodata, recommendations and references (Othman, 2001).

The process of selection has the following stages (sgs.my, n.d.):

  1. Scanning applications
  2. Telephone interview
  3. First-round interview
  4. Assessment
  5. Second-round interview
  6. Reference check
  7. Selection decision and offer

Miscellaneous Information

1. Work Visas

In order to get a work visa, the applicant should have a passport valid for at least 18 months. The applicant must be 27 years old above (minimum of 23 years old in the IT sector). The applicants usually get work permits validated for a period between 6 months to 5 years (Just Landed, n.d.).

There are three types of work passes depend on the different types of job and skills (Just Landed, n.d.):

  • Employment Pass: employees with specific skills normally get the pass for more than 2 years’ validity.
  • Temporary Employment Pass: the pass is usually issued for less than 2 years, and the monthly salary is less than RM 5000.
  • Professional Visit Pass: the pass is issued for a foreigner who is required to provide services to a Malaysian company for a period of up to 6 months. In addition, the person has already been employed at home country, and will return to the home country after six months.

2. Working Conditions

the Employment Act of 1955 restricts that an employee may have a maximum 48-hour working week with a maximum of 8 hours per day and six days a week.

Employers must pay the monthly salaries before the 7th day after the last day of any wage.

The minimum pay in Malaysia is RM1000 per month is Peninsular Malaysia, and RM920 per month in Sabah, Sarawak, and Labuan. What’s more, the minimum wage for domestic helps is RM900.

Employers have to pay 1.5 times of salary if the employers work overtime on normal working days, two times of hourly salary on the rest day, and 3 times on public holidays (Balakrishnan, 2017).

3. Holidays and Leave Entitlement

3.1 Public Holidays

There is 11 minimum paid holidays per year, including:

Chinese New Year, Maulidur Rasul, The Yang di-Pertuan Agong’s Birthday, Wesak Day, Labour Day, Awal Muharram, Hari Merdeka (National Day), Hari Raya Puasa (2 days), Hari Raya Qurban, Deepavali, Christmas, and Malaysia Day.

3.2 Annual Leave

-8 days paid annual leave for employees have worked with the same employer for a period of one to two years.

-12 days paid annual leave for employees who have the same employer for a period of three to five years.

-16 days paid annual leave for employees who have worked with the same employer for a period of more than 6 years (Balakrishnan, 2017).

3.3 Sick Leave

-Employees should have 14 sick leave days if they have been employed with the same employer for a period of one to two years.

-Employees should have 14 sick leave days if they have worked with the same employer for a period of one to two years.

-18 sick leave days if they have worked with the same employer for more than three years but less than five years.

-22 sick leave days if they have worked with the same employer for more than 6 years.

In addition, there are 60 days for hospitalization, and 60 consecutive days with Maternity Leave (Balakrishnan, 2017).

4. Termination of Employment

Four weeks, six weeks, and eight weeks notice should be given to the employees who have been employed for less than two years, two to five years, and more than five years respectively (Balakrishnan, 2017). 

Bibliography

Balakrishnan, N. (2017). Annual Leave Days And Other Legal Rights You Have As An Employee In Malaysia. [online] SAYS. Available at: https://says.com/my/lifestyle/your-rights-as-an-employee-in-malaysia [Accessed 13 Nov. 2019].

Dosm.gov.my. (2018). Department of Statistics Malaysia Official Portal. [online] Available at:https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=126&bul_id=ekU0SG1yQk1wcExKUDhvN2RHTlhjZz09&menu_id=U3VPMldoYUxzVzFaYmNkWXZteGduZz09

Hector, C. (2017). The state of the labour movement in Malaysia. [online] Malaysiakini. Available at: https://www.malaysiakini.com/news/402157 [Accessed 13 Nov. 2019].

Just Landed. (n.d.). Work Visas. [online] Available at: https://www.justlanded.com/english/Malaysia/Malaysia-Guide/Visas-Permits/Work-Visas [Accessed 13 Nov. 2019].

Mudhakkir, A. (2017). The Different Types of Job Search Sites in Malaysia and Their Advantages. [online] RinggitPlus. Available at: https://ringgitplus.com/en/blog/Career/The-Different-Types-of-Job-Search-Sites-in-Malaysia-and-Their-Advantages.html [Accessed 13 Nov. 2019].

Nationsonline.org. (n.d.). Malaysia – Country Profile – Nations Online Project. [online] Available at: https://www.nationsonline.org/oneworld/malaysia.htm [Accessed 13 Nov. 2019].

Othman, Z. (2011). Critical study of the managerial selection practices in Malaysian business organisations. [ebook] Available at: https://ro.ecu.edu.au/cgi/viewcontent.cgi?article=1151&context=theses_hons [Accessed 13 Nov. 2019].

Sgs.my. (n.d.). Recruitment Process. [online] Available at: https://www.sgs.my/en/our-company/careers/recruitment-process [Accessed 13 Nov. 2019].

Tan, J. and Prashant, J. (2019). Employment & Labour Law 2019 | Malaysia | ICLG. [online] International Comparative Legal Guides International Business Reports. Available at: https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/malaysia [Accessed 13 Nov. 2019].