EMPLOYMENT OF FOREIGN EMPLOYEES

6.1 LAW RELATING TO THE RIGHTS OF FOREIGN WORKERS

Foreign employees are entitled to protection provided by the Employment Act 1955.

Any employer who withholds the salary of a foreign employee unlawfully has

committed a crime which is punishable by law, and such crimes attract a fine of up to

RM10,000. Any employer who breaches the conditions of service as per the agreement

with any foreign employee, will be liable for prosecution in a court of law.

o Chong Wah Plastics Sdn Bhd v Idris Ali & Ors [2001] 1 ILR 598, the Industrial

Court held that "foreign employees in accordance with the definition of

"employee" under the Employment Act 1955 are also employees. No difference

is made between foreign and local employees".

Director General May Inquire Into Complaint

o Section 60L(1) provides that the Director General may inquire into any

complaint from a local employee that he is being discriminated against in

relation to a foreign employee, or from a foreign employee that he is being

discriminated against in relation to a local employee, by his employer in respect

of the terms and conditions of his employment; and the Director General may

issue to the employer such directives as may be necessary or expedient to

resolve the matter.

o Section 60L(2): An employer who fails to comply with any directive of the Director

General issued under subsection (1) commits an offence.

No employer is permitted to make a deduction from a foreigner employee unless

permitted according to the stipulations specified in the employment laws of Malaysia.

o Can be referred to section 24 of Employment Act 1955.

The employment of female foreign employees in Malaysia is subject to the same

regulations as that of female employees who are Malaysian citizens.

Duty To Furnish Information And Returns.

o Section 60K(1) requires that the employer must notify the nearest Director

General of Labour within 14 days of commencement of employment and

furnish him the details of the employee.

o Section 60K(3) stated that if the foreign employee's contract were terminated

by either party, the employer shall, within thirty days of the termination of service,

inform the Director General of the termination in a manner as may be determined

by the Director General.

o Section 60K(5) stated that any employer who contravenes subsection (1)

commits an offence and shall, on conviction, be liable to a fine not exceeding

ten thousand ringgit.

Prohibition On Termination Of Local For Foreign Employee

o Section 60M provides that no employer shall terminate the contract of service

of a local employee for the purpose of employing a foreign employee.

Termination Of Employment By Reason Of Redundancy

o Section 60N provides that here an employer is required to reduce his workforce

by reason of redundancy necessitating the retrenchment of any number of

employees, the employer shall not terminate the services of a local employee

unless he has first terminated the services of all foreign employees employed by

him in a capacity similar to that of the local employee.

All foreign workers earning less than RM2,500 per month are required to contribute to

EPF with the exception of certain categories such as foreign domestic maids, selfemployed foreigners and out-workers who do cleaning and alteration repair works.

Beginning from 1st January 2019, all employers are required to register their

documented foreign workers with SOCSO. Upon registration, the employees being the

foreign workers will then be able to enjoy the benefits provided under SOCSO

o Benefits under the scheme include medical benefit, permanent.disablement

benefit, constant-attendance allowance, dependant's benefit, as well as

repatriation cost including funeral.

o However, foreign workers will not be covered under Invalidity Pension scheme.

6.2 EMPLOYMENT (RESTRICTION) ACT 1968 (ERA 1968)

Section 5 of the ERA1968 stipulates the requirement of a valid employment permit.

o Section 18 ERA 1968: Failure to comply, the person shall be guilty of an offence and

shall on conviction be liable to a fine not exceeding five thousand ringgit or to

imprisonment for a term not exceeding one year or both.

o Section 18(2): Any person who forges, alters or tampers with any employment permit

shall be guilty of an offence and shall on conviction be liable to a fine not exceeding

one thousand ringgit or to imprisonment to a term not exceeding six months or both.

Section 6 of ERA 1968 stated that foreign employees shall before commencing his employment

apply for an employment permit to the Commissioner and the application shall be in such form

and shall contain such particulars as may be prescribed.

Section 7 of ERA 1968 provides that upon receipt of an application for an employment permit

or an application for renewal of an employment permit under section 6, the Commissioner of

Employment or any authorized person may in his discretion issue an employment permit in

such form as may be prescribed or renew such employment permit and may impose thereon

such terms, conditions and restrictions as he may think fit.

Section 10(1) of ERA 1968 stated that an employer of an employee of foreign employee shall

terminate the services of that employee within thirty days of his being notified in writing by the

Commissioner:

o that an employment permit has been refused in respect of that employee being a person

in his employment on the appointed date; or

o that the employment permit issued in respect of that employee has been cancelled,

suspended or not renewed.

o Section 10(2): Every employer referred to in subsection (1) who terminates the services

of an employee or ceases to employ such employee pursuant to subsection (1) or for

any other reasons whatsoever, shall notify the Commissioner in writing within fourteen

days of such termination.

o Section 10(3): The termination of the services of an employee pursuant to subsection(1)

shall not be:

capable of negotiation by a trade union representing the person affected; or

the subject matter of a trade dispute or of conciliation proceedings or any

method of redress whether under any written law or not.

Section 11(1) of ERA 1968 states that an employment permit issued shall be valid only in

respect of the particular employment and the employer specified therein.

o Section 11(2): An employment permit shall unless sooner cancelled or suspended be

valid for a period of not exceeding two years.

Section 15(1) of ERA 1968 states that when an employment permit has been lost, destroyed or

defaced, a person in respect of whom the employment permit has been issued shall forthwith

report the same to the Commissioner or any authorized person and shall apply for a replacement

employment permit.

Section 16 of ERA 1968: any person who makes any statement or furnishes any information

which he either knows or has reason to believe to be false in any material particular or omits

any particular which he either knows or has reason to believe is a material particular shall be

liable to a fine not exceeding one thousand ringgit or to imprisonment for a term not exceeding

one year or both.

Section 18(3) of ERA 1968: Every omission or neglect to comply with, and every act done or

attempted to be done contrary to this Act or of any regulations made thereunder, or any breach

of the conditions and restrictions subject to or upon which an employment permit is issued

under this Act, shall be an offence against this Act and the offender shall, if no penalty is

expressly provided, be liable on conviction to a fine not exceeding one thousand ringgit or to

imprisonment for a term not exceeding six months or both and, in the case of a continuing

offence, to a further fine not exceeding one hundred ringgit a day.

6.3: IMMIGRATION ACT 1969/63 (IA 1969/53)

Section 55B(1) of IA 1969/53: Any person who employs one or more persons who is

not in possession of a valid Pass shall be guilty of an offence and shall, on conviction,

be liable to a fine of not less than ten thousand ringgit but not more than fifty thousand

ringgit or to imprisonment for a term not exceeding twelve months or to both for each

such employee.

o Section 55B(2): A Pass lawfully issued to any person shall cease to be a valid

Pass when any of its terms and conditions is contravened.

o Section 55B(3): Where, in the case of an offence under subsection (1), it is

proved to the satisfaction of the court that the person has at the same time

employed more than five foreign employees that do not have a valid Pass, that

person shall, on conviction be liable to imprisonment for a term of not less than

six months but not more than five years and shall also be liable to whipping of

not more than six strokes.

o Section 55B(5): Where the offence under subsection (1) has been committed by

a body corporate, any person who at the time of the commission of the offence

was a member of the board of directors, a manager, a secretary or a person

holding an office or a position similar to that of a manager or secretary of the

body corporate shall be guilty of that offence and shall be liable to the same

punishment to which the body corporate is liable under subsection (1) or (3).

Section 55C(1) of IA 1969/53: It shall be a defence for any person

prosecuted pursuant to subsection 55B(5) if he proves:

that the offence was committed without his knowledge or

connivance; or

that he took all reasonable precaution; and exercised all due

diligence,

to prevent the commission of the offence as he ought to have taken and

exercised having regard to the nature of his functions in that capacity

and to all the circumstances

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Answer ALL questions.

1. With reference to Employment (Restriction) Act 1968, explain the situations where the employer is obliged under the Act to terminate the employment of foreign employee. 2. Discuss the solutions offered under Minimum Retirement Age Act 2012 if the employer prematurely retires his employee.

3. Discuss the situations where an employee can withdraw part of their contributions in Employees Provident Fund.

4. Discuss employer obligations under Occupational Safety and Health Act 1994.