Categories of Employees Prior to the amendments, most of the provisions of the Employment Act were applicable to persons earning not more than RM1,500 per month. The minister has made an order amending RM1,500 to RM2,000. This means that all persons, irrespective of whether they are employed as managers or executives earning RM2,000 or less, now become entitled to all the benefits under the Employment Act and Regulations, such as payment for overtime, work on rest days and public holidays, limits to hours of work and termination benefits. Payment of salaries The amendments will require employers to pay the entire salary of employees into their bank account, finance company, financial institution or other institutions licensed or established under the Banking and Financial Institutions Act 1989 unless otherwise requested by an employee. Additionally, for domestic servants, consent from the Director General of Labour (“DG”) to pay their salary in cash or by cheque i...

Retrenchment Exercise – A Rule Of Thumb Introduction   I was tasked to complete two major retrenchment exercises in the past few months. Both the companies have to take this radical step to end the employment service of their loved employees in the interest of the company. Unlike dismissal for poor performance or on the ground of misconduct, dismissal for redundancy is a “no fault” dismissal and employees must be given all possible assistance to deal with the situation. While the court generally will not interfere with the bona fide exercise of power given to the management to conduct this exercise, it is important to note that the employer must provide a proper cause or reason before terminating the employees. Hence, in this article I highlighted some vital guide to help ensure that a retrenchment exercise is handled appropriately so that the objectives of restructuring can be better achieved and that employees’ interest will not be compromised...

There are more than 800,000 SME’s in Malaysia providing employment to almost 56% of our nation’s workforce, which makes it the biggest employer in Malaysia. Although being the largest employer in our country, HR management is not seen as priority by most businesses in the SME sector. In fact most SME enterprises do not have a HR function or a designated HR person to oversee the people management issues. In most cases the HR function is managed by the finance department and it is limited mostly to payroll management.  In some SME organizations they do not even have written HR policies and procedures in place and this has led to unnecessary employment and legal disputes. The good news though, a lot of SME enterprises are beginning to see the importance of good HR management and trying to improve but the question most are stuck with is where to start. Well our recommendation is, start with an employee handbook.  Why start with an employee handbook? An empl...

"I can't understand la this new generation. They keep changing their work, they don't listen, ask too many questions and are so stubborn". Sounds familiar? I should think so. These are comments and whining that we usually hear about the so called Generation Y workforce. But before we start taking out the whip and begin to b**** them, maybe we should try to understand this generation as the generation before us has done with us.   Who is Generation Y? There is no consensus over the exact birth dates that define Generation Y, also known by some as echo boomers and millennials. The broadest definition generally includes millions that are born in 1977 to 2002. Generation X was born roughly between 1965 to 1976. Narrower definitions put Generation Y as those aged 16 to 27, born from 1978 to 1989. This narrower view is based on the thinking that as the pace of change in society accelerates, the time frame of a generation gets shorter.   Ab...

A Look At HR Today As a staff function, HR is expected to perform a broad range of activities across numerous areas, making it difficult to focus on those people issues that are important to the business. Despite an obvious emphasis on reducing spending on HR, the overall trend line for HR costs continues to creep north. HR continues to provide the traditional set of products and services, spending 50% of its time in three functional areas: staffing/recruiting, workforce relations/communication, and HRMS/workforce administration in contrast to activities important to business acumen such as leadership development, succession and workforce planning, performance management, career development, competency development, organizational planning and design, process reengineering, mergers and acquisitions, and measurement. On average 43% of HR?s time is devoted to program administr...

One of the most important elements of resourcing is manpower planning where an organizations work force requirements is planned. The prime objective of manpower planning, is to have the right number of people, at the right place, right time, doing the right things for which they are suited for the achievement of goals of the organization. In order to develop a manpower plan, HR would require the contribution and support of everyone staring from the line supervisors right up to the CEO and the manpower plan must be business driven.   Why Manpower Planning? Manpower planning does not only look an organization current workforce needs, it also looks at an organizations future workforce needs. Manpower planning is important to a organization or business due to the following: Workforce shortage can be identified Effective recruitment and selection based on manpower plan Better management of labour cost as overstaffing can be avoided Ident...

The macro environment in which we operate is constantly changing. This has been highlighted to the extreme in the past few months due to the economic situation brought about by the sub-prime situation in the USA. Whilst Malaysia may seem well insulated, the trickledown effect will undoubtedly affect the whole world and ultimately you and your firm.   So how should you stay ahead of the game as an HR Manager? As the year end approaches you're probably thinking about performance appraisals right? But what about your strategic HR plan for 2009 and 2010? If you have started it or haven't even thought about it your time is running out! To operate with the same HR strategies as in the past few years will be suicide. The macro environment has change permanently and as a leader you should be taking the helm and using the HR functions to support and drive the business goals. If you haven't heard of PESTEL then it's a great tool to use to analyse the macro e...

The Importance of Retention Retaining good workers is critical. Literature and best practices indicate that if employers treat their employees as valued contributors, the employees will stay. To this end, companies train, their managers, offer competitive compensation plans, and increase benefits to secure their employees' loyalty. Despite these efforts, many organizations experience a shortage of employees and high turnover rates. A retention strategy should specify a quantified problem and measurable objectives. Good managers use a process approach to solving problems. To achieve worthwhile results, recruiting and retaining good employees should be treated the same way. A retention strategy should include a business plan, a value proposition, progress measures, and management influences. Business Plan The first step in developing a retention strategy is to create a business plan. The purpose of the plan is to help managers understand the cost and co...

I visited the Ministry of Education (Kementerian Pelajaran Malaysia) twice this year - once in January and again, in the second week of November ? both for the same reason - to accompany my sister-in-law in obtaining placements into boarding school for her children. During the January visit, I was overwhelmed by the number of visitors they had who obviously had traveled from all parts of Malaysia, bearing their children?s UPSR/PMR/SPM certificates and other academic and non-academic papers of achievements in their quest to place their children in the best boarding schools possible. It was apparent that some parents were agitated, having had to wait for quite some time, and the attending officer did his best to explain and appease them. We left the premises slightly disillusioned, with an instruction to write in, which we did, and did not receive any response from them till this date. My November visit was different. The waiting area was empty and we were ...

Changing Labour Laws Recent months have seen moves by the Ministry of Human Resources to respond to the demands of employers for increased flexibility when it comes to managing their workforces. Here's how the scenario has unfolded thus far:   The key issues as addressed in the current law: According to the Employment Act 1955, compensation for employees who are made redundant is calculated based on years of service and wages. Probationary workers have the same rights as other workers with regards to retrenchment.   The proposed changes: The changes would see a cap placed on compensation payments that can be awarded to retrenched workers, and a review of rights of probationary workers (i.e. they would no longer be able to legally challenge their dismissal). The government has also proposed a 'safety net' for retrenched workers, to be paid for through fund contributions by employers.   The major players & their views: The Ministry of Human Resource...