Employment Act: Procedure If Employer Did Not Pay Employee Salary On Time

Ever come across a scenario where an employee does not receive their wages/ salary on time? If that happened, what are the recourse that is available to the employee?

The general rule is that an employer must pay their employee’s salary within 7 days after the last day of the month. For example, the employer must pay for the March salary to the employee latest by the 7th of April. However, as mentioned above, late payment or non-payment of an employee’s salary is not uncommon.

Today, we will be discussing two scenarios:

Scenario 1: Salary RM5000 and below

Any employee who earns RM5,000 and below1 can pursue their grievances with the Director-General of Labour under the Employment Act2.  The right is guaranteed under the Employment Act and the employer cannot prevent their employee from appearing before the Director-General if they choose to do so3.

Once you lodge your grievances, the Director-General will then inquire, hear and decide the complaint. Below is a brief procedure of the inquiry process4:

  1. The employee is to prepare a statement of his complaint and the remedy he seeks;
  2. Director-General will then examine the employee on oath/ affirmation;
  3. Director-General will then make the necessary inquiry and summon the employer if he thinks he ought to look into the complaint;
  4. Require the employer to attend or if he refuses to do so, issue a summons to compel him to attend;
  5. Examine the employer on oath/ affirmation; and
  6. The Director-General will make a decision based on his findings, even if the employer chooses not to show up for the inquiry after the Director-General summon them.

Any person who fails to adhere to the decision given by the Director-General at the end of the inquiry can be liable to a fine not exceeding RM10,000.00 and a daily fine not exceeding RM100.00 each day after being convicted for non-compliance until the person complies with the decision5. The decision can even be enforced upon by the Session Court if any person refuses to comply with the decision given6.

If an employee is dissatisfied with the decision of the Director-General, he can still file an appeal to the High Court7.

employment act

Scenario 2: Salary RM5000 and above

Alternatively, any employee who earns RM5,000 and above (or for that matter, any employee at all) can pursue their grievances with the Director-General of Industrial Relations under the Industrial Relations Act8.

The brief procedures are as follow:

  1. The employee will first try to negotiate and settle the matter with his employer9;
  2. If the matter is not settled/ resolved, the employee can then refer the matter to the Director-General10;
  3. The Director-General will then take the necessary steps to promote a settlement between the employee and employer11;
  4. If they can’t resolve the matter, the Director-General will direct both parties to attend a conference presided by him. At this stage, both parties will be required to furnish information to the Director-General as and when it is required by the Director-General12;
  5. The Director-General could also refer the matter to Minister of Human Resources if both parties cannot arrive at a consensus/ settlement13;
  6. The Minister will then refer the matter to the Industrial Court14 if they too fail to settle the matter between both parties15; and
  7. The court will then proceed with inquiring, hearing and deciding the matter in a manner that is similar to those mentioned above16.

Finally, the court will make a decision and give the appropriate award. The award does not need to be restricted to the relief claimed by the parties in the matter17. The award granted by the court is final18. No appeal can be made to the High Court unless the appeal concerns a question of law and not the award itself19.

Both processes can be time-consuming. Therefore, as an employee, it is always prudent to first try and settle the matter amicably with the employer. Only when all else fails should an employee bring the matter to their respective Director-General to settle the matter.

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1. First Schedule, Section 1 and Section 69B (1), Employment Act 1955.

2. 1955.

3. Section 81, Employment Act 1955.

4. Section 70, Ibid.

5. Section 69 (4), Ibid.

6. Section 75, Ibid.

7. Section 77, Ibid.

8. 1967.

9. Section 18, Industrial Relation Act 1967.

10. Section 18, Industrial Relation Act 1967.

11. Ibid.

12. Section 19, Industrial Relation Act 1967.

13. Section 18 (5), Ibid.

14. Section 26, Ibid.

15. Section 19A, Ibid.

16. Section 29, Ibid.

17. Section 30 (6), Industrial Relation Act 1967.

18. Section 33B, Ibid.

19. Section 33A, Ibid.

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