Know Your Leave Policy
As an employee in Malaysia, you are entitled to six (6) different kinds of statutory leave provided under the Employment Act 1955. Statutory leave is the legal minimum amount of paid leave that all employees are entitled to from their employer in a year.
Besides the minimum leave outlined in the act, other types of leave, determined by industry practice and policy, vary among companies. Leave policies are typically specified in the employment contract. This article explains leave entitlement provisions in the Malaysian Employment Act and non-statutory leaves common in the private sector.
*Effective from 1st January 2023, the Employment Act will now apply to all employees irrespective of their wages, with some specific sections not applying to employees earning more than RM4,000 monthly.
(1) Sick Leave [Section 60F]
In Malaysia, depending on the years an employer has been in the service, each employee is entitled to the following number of sick leave:
- Employed for less than two years:14 DAYS
- Employed for more than two years but less than five years: 18 DAYS
- Employed for more than five years: 18 DAYS
Sick Leave vs. Hospitalisation Leave
It is important to note that hospitalisation leave is differentiated from sick leave. Sick leave is granted when an employee is ill but does not require hospitalisation. Every employee, regardless of the length of their service, is eligible for 60 days of hospitalisation leave annually.
Requirement of Medical Certificate (MC) by Panel Doctor
It is important to note that employees who take sick leave must provide a medical certificate (MC) from a registered medical practitioner or a government hospital. Per Section 60F (1) of the Act, employees must be declared unfit by a panel-appointed doctor to get paid sick leave. If a non-panel doctor certifies sickness, the employee may not be entitled to paid sick leave.
There are two exceptions to the above rule, which are:
- If the panel doctor’s services are not available at the time or place when the employee falls ill, they may visit any doctor and be entitled to paid sick leave if they are certified unfit for work.
- In a medical emergency, the employee can visit any doctor, not necessarily those on the employer’s panel.
What happens if you exhaust your paid sick leave?
When employees exhaust their paid sick leave, they may be required to take unpaid leave if they need to continue taking time off work due to their sickness. This is because the act only provides 14-22 days of paid sick leave, depending on the year of service. If employees need more time to recover from their sickness, they may need to negotiate with their employer to extend their leave.
(2) Public Holidays [Section 60D]
Every employee is entitled to paid public holidays at their ordinary rate of pay on the following days in any one calendar year;
- Eleven (11) gazetted public holidays, five (5) of which shall be National Day, the Birthday of Yang Di-Pertuan Agong (YDPA), the Birthday of the Rulerin the respective state where the company is located, Labour’s Day and Malaysia Day; and
- The other six public holidays can be chosen from any day appointed as a public holiday for that particular year under Section 8 of the Holidays Act 1951
(3) Annual Leave [Section 60E]
Under the act, employees are entitled to a minimum of 8-16 days’ annual leave. The leave entitlement will depend on an employee’s duration of service. At a minimum, the number of days’ leave is as follows:
- Employed for less than two years: 8 DAYS
- Employed for more than two years but less than five years: 12 DAYS
- Employed for more than five years: 16 DAYS
Employees working less than a year
For an employee who has yet to complete 12 months of continuous service with the same employer, his entitlement to paid leave shall be pro-rated. In the context of leave entitlement, pro-rated refers to the calculation of an employee’s entitlement to leave based on the length of time they have worked for the company.
For instance, a person will be entitled to four (4) days of annual leave if they serve at the company for only six (6) months during that year. If the employer falls sick during their annual leave, the annual leave will be replaced with sick leave, and the annual leave shall be deemed to have not been taken.
How to Apply for Annual Leave
The act does not provide for procedures by which employees may apply for annual leave. Therefore, an employer must explain such procedures and make them known to employees. It is usual for business planning purposes to require employees to apply for annual leave in advance of taking the leave. The employer must decide:
- To whom the employee must apply for permission to take leave;
- How many days advance notice must be given when applying for leave and
- What documentation needs to be furnished by the employee applying for annual leave
Employees may only commence annual leave if the employer permits them. Employees who take leave without permission have committed misconduct, and disciplinary action may be taken against them.
Unused Annual Leave
The employee must utilise their annual leave within the period of 12 months. However, if they still have unused annual leave by the end of the year, there are two following options available for them:
- Carry forward – Unused annual leave can be carried forward to the following year, subject to the employer’s policy.
- Encashment– Alternatively, the employer may pay the employee for the unused annual leave. This payment should be made at the employee’s ordinary rate of pay.
The above two options are not required under the act and are subject to the employer’s discretion and the terms and conditions set by the company. For employees, planning your annual leave and applying in advance is best. Annual leave is your entitlement, but approving the leave is subject to the final approval and discretion of the company.
(4) Maternity Leave [Section 37]
Following the Maternity Protection Convention 2000, Malaysia’s lawmaker has increased the maternity leave applicable to all female employees from 60 to 98 consecutive days. Every female employee is entitled to paid maternity leave if they fulfil two conditions, namely:
- They have worked for the employer for at least 90 days continuously in the four months before they give birth, and
- They have no more than five surviving children
A pregnant female employee can commence their maternity leave 30 days before their expected due date with the recommendation of a registered medical practitioner under the Ministry of Health. Still, at the latest, they must start their leave on the day they give birth.
Apart from that, the act allows female employees to return to their employment before the completion of 98 days, subject to approval by their employer. They must also be certified fit to return to their employment after childbirth.
Under Section 40 of the Act, a female employee who fails to notify her employer of her maternity leave may lose her entitlement to receive any maternity allowance from the employer. Therefore, she is advised to notify her employer as soon as she knows about her pregnancy so the employer can make necessary arrangements during her absence.
(5) Paternity Leave [Section 60FA]
Paternity leave is a fresh addition made to the newly amended Employment Act 1955 in which a married male employee is now entitled to a paid paternity leave for a period of 7 consecutive days under the following conditions:
- The same employer has employed them for at least 12 months before the commencement of the paternity leave, and
- They have notified their employer of the pregnancy at least 30 days from the expected birth date or as early as possible after the birth.
However, the grant of paternity leave is only restricted up to 5 confinements irrespective of the number of spouses.
(6) Optional Leave
Other than those explained above, no other types of leave are provided for in the act. In addition to the above, employers may also provide other types of leave depending upon what has been agreed in the employment contract and their generosity and consideration. Several other types of leave are commonly granted to employees, such as:
- Marriage leave is granted to employees who are getting married so they can have ample time to plan for their wedding and potentially go on a honeymoon
- Study leave is granted to employees who wish to pursue further education or training that is relevant to their job
- Compassionate or bereavement leave is granted to employees who need to take time off work for personal reasons, such as caring for a sick family member or attending to a personal matter.
- Pilgrimage leave is a special leave granted to Muslim employees who wish to perform the Hajj or Umrah in Mecca, Saudi Arabia.
- It is helpful to be aware of the rules surrounding paid entitlement to leave in Malaysia so that you can negotiate terms that are on par with or better than those provided by law in your employment contract.
- It is important for employees to be aware of their entitlements and for employers to communicate their policies clearly and transparently.
- If you need clarification on your leave options under the terms of your employment contract, consult a lawyer.