Employment Law and Industrial Relations

Industrial Relations Act 1967

Industrial Relations Act 1967 is an Act to regulate the relationship between the employers and workmen and their trade union. It deals with differences or disputes arising from the employer-employee relationship. It establishes the principles on which these relations are founded, namely:-

(i)                 trade unionism – the principle that employees and employers have the right to organize  themselves in trade unions in order to protect and promote their respective interests;

(ii)               union recognition – the principle that employee unions must be registered with the relevant authority and being recognized as the proper representatives of the employees.

(iii)             collective bargaining – the principle that employee unions and the employers may negotiate on periodic basis, the terms and conditions of employment. Collective agreement if achieved may be binding upon the parties.

(iv)             dispute resolution – the principle recognizes variety of ways available to employers and the unions to peacefully resolve differences and disputes between them.

New Minimum Retirement Age of 60 Years Old in the Private Sector

With the coming into force of the Minimum Retirement Age Act, the retirement age for employees in the private sector will be increased from the existing age of 55 to 60 commencing from 1st July 2013. However, such minimum retirement age shall not have any implication on those contracts whereby the employees are granted the option to retire early at age 55.

Those employers who wish to be exempted from the implementation of the minimum retirement age for their workers must submit their application for exemption to the Ministry of Human Resource before or on 31 December 2013. Nonetheless, the employers must provide strong and valid reasons to support their application.

Immigration: Foreign Workers in Malaysia

Types of Passes

There are basically four (4) types of ‘passes’ available to foreign nationals for work-related purposes. These passes are as follows:-


(i)                 Employment Pass

An employment pass is issued to a foreigner who is categorized as an Expatriate who works for a company, government, or non government agency or statutory body. There is a minimum salary, and the contract of employment should be for a period of no fewer than two (2) years. Although there is no specific definition as to who will qualify as an expatriate, typically it applies to investors, skilled workers, professionals, and senior management in corporations.


(ii)               Visit Pass (Temporary Employment)

A Visit Pass (Temporary Employment) is issued to skilled and semi-skilled foreign general workers. This pass is for short term employment of fewer than two (2) years, issued on a year-to-year basis, for the sectors such as manufacturing, construction, plantation; and service (eg. Domestic maid, pump attendants, and restaurants).


(iii)              Visit Pass (Business)

An expatriate who enters the country for short term work related purposes. The BusinessPass is usually valid for three (3) months and renewable upon departure and re-entry.


(iv)               Visit Pass (Professional)

A Visit Pass (Professional) is issued to a foreigner on a short term (9 to 12 months) visit who enters the country on specific professional purposes i.e, as:

  • Artist, musician, performer, sportsman
  • Experts in installation and commissioning of machineries
  • Missionaries and mission workers; and
  • Academics, researcher, or speaker.


Approval of Employment Pass of Expatriate


(a)                The sponsor/employer company will have to be approved with expatriate post. The approval is made by a committee comprised of the respective ministries/agencies and the immigration Department. The Committee will evaluate if such a post should be held by an expatriate based on the job specifications, functions and feedback from the Ministry of Labour on the available workforce in Malaysia.


(b)         The sponsor company may then proceed to apply for the Expatriate candidate to be issued an employment pass. The Immigration Department will issue the employment pass to the candidate upon being satisfies that the candidate fulfills all the criteria set out for that expatriate post.


(c)                Upon obtaining the above approval, an application for the issuance of the employment pass may be made by submitting an application form accompanied by a cover letter addressing the following information :


  • Particulars of the applicant company;
  • The company’s employee date according to category/ salary;
  • Particulars and job functions of expatriate post applied for;
  • Justification for the expatriate candidate to hold the post; and
  • Organization chart.

Employment Law and Industrial Relations

Employment law has become increasingly complex in view of numerous status which protect the rights and interest of workers / employees. In view of such complexities, we are focused in practical outcomes which benefit both the Employer and the Employee.

We offer practical solutions by providing “hands on” advise in respect of disputes which arise in the work place.

The scope of work extends to:-

  • Reorganisations and retrenchment of work force to ensure companies operate profitably and efficiently.
  • Drafting of Contracts of Employment and HR Policies to ensure that they are in compliance with local legislation.
  • Preparation of performa letters to assist in management of indiscipline and misconduct which is consistent with the legal requirements for fairness and just cause.
  • Assisting with setting up of a domestic inquiry panel to investigate any allegations of misconduct.
  • Drafting of necessary documentation for the performance improvement process within organisations.
  • Industrial Court/Labour Court Representation