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An Expert Discussion On The Labour & Employment Landscape In Malaysia

Posted: 14th December 2021 14:28
With the borders still closed and the government enforced lockdowns fresh in recent memory, the labour and employment landscape continues to be impacted by COVID-19 in Malaysia. To get a clearer picture of the on-going ramifications for employers and employees, we spoke with Suganthi Singam, Partner at Shearn Delamore.

Suganthi specialises in employment related legal issues and workplace strategic areas, addressing both contentious and non-contentious matters. In particular for newly incorporated companies and foreign investments in Malaysia, she advises on the drafting of employment agreements, policies and handbooks. In relation to workplace risk management and safety, she provides legal advice on occupational health and safety issues as well as sexual harassment policies and procedures. She also handles trade union recognition issues, labour disputes and strikes.

How Should Companies Approach The Vaccination Status Of Its Employees?

Mandatory vaccination has not been implemented in Malaysia adopting the approach of several other countries globally. With the emergence of new variants of COVID, this position may see changes if the situation escalates. However, as of December 2021, this remains an individual’s personal right. Given that the right to vaccinate remains voluntary, companies have instead approached a soft stance towards vaccination drives to encourage employees to vaccinate. The request for information relating to the individual employee’s vaccination status has been confined largely to confirmation of the status (i.e. whether one has been vaccinated or otherwise given data privacy laws).

Is It Possible To Enforce Mandatory Vaccination And What Other Potential Challenges (Such As Data Protection) Exist?

As vaccination has now been made readily available and is accessible, companies are implementing policies mandating vaccination towards the physical return to the work premises save for those exempted by reason of medical conditions. This includes policies requiring the daily disclosure of the health status at the point of entry and the introduction of self-testing prior to entry in tandem with other safety measures implemented at the onslaught of COVID-19 which includes but is not limited to the usage of face masks (which is already mandated in Malaysia), observance of social distancing, temperature readings at the point of entry and regular sanitisation.

The refusal of entry or denial to the work premises could potentially see claims of constructive dismissal being brought about against employers whilst the ultimate punishment of dismissal for refusal to vaccinate could see a rise in representations of claims of unfair dismissal. This has yet to be tested before the Industrial Courts in Malaysia. The determination of such matters should however be viewed against balancing the right of an employee to vaccinate and the statutory safety obligations imposed upon employers by the Occupiers Safety and Health Act 1954 to provide a safe working environment.

What New Challenges Have Emerged As A Result Of The Shift Towards Remote Working And What Steps Should Companies Take To Remediate These Risks?

The principal challenge remains ensuring that employees deliver what is required of them and respecting the work hours where there is the inability to confine communications to the stipulated contractual times under the terms and conditions of employment. Where previously issues could be quickly resolved through face-to-face discussions with team members present, the coordination and scheduling of availability of individuals has been met with challenges where remote working has come in to play. This however is not something which is insurmountable, and requires flexibility on the part of both the employer as well as the employee. These were initial challenges that were faced when there was the shift to remote working however these have gradually been managed over the course of time.
Although the employment relationship is governed under the contractual terms and conditions of employment, strict adherence to such contractual provisions is no longer possible where one no longer has the ability to control or dictate the presence of an employee. Whilst it is expected of an employee to be available during their workhours the reality of the situation is that when one is working from home, the rigidity of adherence to operational hours is no longer possible given the extraneous factors which are present in any form of remote working. As such there needs to be a mind-set change on the part of both employer and employee in addressing the work relationship and flexibility that is required in present times. This coupled together with connectivity issues depending on the location of an individual has also proven to be a challenge which has required employers to be progressive in addressing such issues. In these instances, employers have opted to utilise co-working spaces at designated areas where employees are able to utilise such facilities remotely without hindrance. Data security and confidentiality of ICT systems have taken priority where most organisations have enhanced security measures in place to cater towards the remote working model.

What Considerations Need To Be Factored Into The Implementation Of Any New Working Model?

At the forefront is the ability to have the flexibility to adapt to the rapidly changing environment. Those whom have been able to move towards the hybrid working model – with a mix of work from home and physical work premises – have had to balance not only the security considerations in connection with the internal systems of an organisation but enhanced data confidentiality measures implemented in efforts aimed at protection of the Company’s data.
In the implementation of any new model the lines between work hours and non-work hours are often blurred as there is no clear demarcation from a practical perspective when one no longer steps in and out of the office. This being the case, that flexibility to adapt and adjust is a two-way approach where the employer will need to recognise that when an employee works from home it is not possible to have the undivided attention of his or her employee during the regular work hours as there will be additional considerations to factor in such as balancing the family front particularly with those having young children or caring for the elderly. Therefore, what some organisations have done is enable the individual employee to determine the hours that best fit the individual’s schedule whilst still maintaining the adherence to the requisite number of hours in any given day. In this manner it allows the employee to give his best at a pace set by themselves whilst adhering to the delivery of the objectives set by the employer.
There is also the need to respect the personal time of an employee to avoid a situation where an individual’s mental health becomes affected in the absence of clear demarcation of work hours and personal time. The emphasis to work life balance has come to the forefront where financial considerations no longer take primary consideration. The job satisfaction, fulfilment and the recognition of an individual’s contributions have played a greater role which necessitates such considerations in any form of working model.

What Role Does Immigration Play In Filling Labour Shortages And Skill Gaps In Your Jurisdiction?

The closure of Malaysian borders resulted in acute shortages in several segments of businesses where Malaysia is largely dependent on foreign labour, both skilled and unskilled. This includes but is not limited to the agricultural and plantation sector, hotel and food industry.
The border has remained closed for almost two years now. However, the impact was not as severe at the onset of COVID-19 as there were several periods of complete lockdowns that had been imposed by the government to arrest the spread of the virus which resulted in a surplus of labour for those periods.
With a growth in vaccination rates and the lifting of such restrictions, the economy is in dire need of such foreign labour. Businesses are seeing an improvement but are unable to cope with the demands as there is a labour shortage due to immigration policies not permitting the entry of foreign labour. As several retrenchments also took place over the course of the last 18 months on account of the pandemic, several measures relating to hiring expatriates were also put in to place through immigration policies. This included the need to first advertise and open up available positions to Malaysian citizens for a period of 30 days. Only in the event of the inability to source for such local talent would the prospective employer be permitted to recruit an expatriate. However, recognising the need for high talent, the policy also allows automatic exemptions for the intended hire of expatriates earning a minimum monthly salary of RM15,000 and above.

How Has COVID-19 Impacted Health And Safety In The Workplace?

The Occupational Safety and Health Act 1954 (“OSHA”) governs the statutory requirements imposed on both employers and employees in addressing health and safety at the work place. Section 15 of the OSHA encompasses the duty on an employer to provide a safe working environment. This duty is further extended even to persons whom are not its employees by virtue of Section 17 of OSHA where the employer has to ensure that there is no exposure to risks to their safety or health at the workplace. Hence with COVID-19, employers in particular have had to put in place stringent measures towards regular sanitisation, temperature readings and maintaining social distancing as a basic minimum requirement towards compliance with the statutory obligations imposed upon employers.
Where previously individuals irrespective whether as employees, visitors or contractors would be able to have relatively free access to a premises or organisation, this is no longer permissible in most establishments unless the individual is prepared to subject themselves to COVID testing, self-declaration health forms, as well as the sharing of information relating to his or her vaccination status. This has brought about internal vaccination related policies being imposed by private companies on its employees, contractors or visitors as part of its measures introduced towards the discharge of its statutory duties imposed under the OSHA. The underlying threshold being in the absence of vaccination there is a denial of entry into the premises.
The duty however is not confined to employers only as it is a shared and joint responsibility even on employees. Section 24 of the OSHA mandates that an employee must take reasonable care for his own health and safety as well as others who may be affected by his acts and omissions which may cause risk to others. Hence arguably the refusal to vaccinate notwithstanding the absence of any law mandating vaccination and the absence of medical reasons to vaccinate, would potentially constitute a breach of the statutory duty imposed on an employee under the OSHA.
For more information, please visit www.shearndelamore.comor contact Suganthi via email at

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