Friday, 2 December 2022

3:00 pm – 4:00 pm Living Trust vs Testamentary Trust: What’s the difference?

About this talk

A living trust, sometimes called an inter vivos trust, involves the execution of a revocable or irrevocable trust deed. A testamentary trust arises from the terms of a deceased’s will. Which is better to protect your assets and your loved ones? Finding the right arrangements in your succession planning to suit your circumstances and needs is important.

Join us for this online talk where our speakers will explain trust deeds, testamentary trusts, the uses, advantages and problems with each.

The talk will be delivered over video conference using Zoom.us. You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Understanding living trusts, its uses and benefits
  • Revocable and irrevocable trust deeds
  • Understanding testamentary trusts and its limitations
  • Possible disputes and case studies

Speakers

  • Gan Chong Chieh, Partner, Individuals and Families Practice Group
  • Rachel Ng, Associate, Individuals and Families Practice Group
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Past Seminars

Wednesday, 30 November 2022

3:00 pm – 4:00 pm Company Directors and Fiduciary Duties

About this talk

Under common law and the Malaysian Companies Act 2016, directors owe the company a fiduciary duty in the exercise of their office. As directors are conferred with wide powers of management, directors are expected under law to (i) act with reasonable care, skill and diligence; and (ii) act in the best interest of the company, under a strict duty of loyalty. The consequences of breaching these fiduciary obligations may result in a director’s removal from office and/or compensation in the form of monetary damages for financial losses.

Join us for this online talk where our speakers will discuss the onerous statutory duties and the strict fiduciary responsibilities that are expected of a director.

The talk will be delivered over video conference using Zoom.us. You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Introduction to fiduciary duties
  • Types of statutory duties of a director
  • Directors duties and obligations when a company is being wound up
  • Fiduciary duties on other company executives

Speakers

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Past Seminars

Our partner, John Chan, was recently interviewed by iProperty.com.my for the article titled “When can you take a property developer to court in Malaysia?

In the article, John shared his views on a variety of issues including the grounds in which a buyer can take legal action against the developer, the steps that can be taken by a buyer if the buyer’s housing development is categorized as a “sick” property and the best way to approach a civil suit involving a developer.

You can read the full text of the article below.

[Read Full Article]


Over the years, there have been cases of frustrated buyers not getting their unit as what was promised in the SPA, or even not getting it at all when a developer falls behind schedule or goes bust. Many buyers are not aware of their legal rights and what avenues are available to them.

Should a property developer fail to carry out his responsibilities and duty of care as laid out in the HDA, homebuyers may consider taking legal action. Taking someone to court is serious business and usually means that one party has exhausted all means to get the other party to do what is expected of them. Going to court not only takes up a lot of time and energy but also requires financial resources. However, if the stakes are high, it is something that would be worth doing.

We speak to John Chan, Partner at MahWengKwai & Associates, for advice on when a buyer can take legal action against a developer.

On what grounds can you take legal action against your developer?

1. Non-delivery or late delivery of vacant possession of your purchased property

Under the HDA, a developer must deliver the vacant possession of the property to buyers within a stipulated time: 24 months for landed homes with an individual title or 36 months for strata-titled properties. Buyers can take legal action if the property is not delivered within this time frame.

2. Defects and latent defects to your property

When you purchase a new property, the property developer is required under the HDA to fix any defects which pop up in the property within 24 months from the delivery of vacant possession. This “warranty” period is known as the defect liability period or DLP. Defects include, but are not limited to, uneven tiles, paint cracks, scratched windows, leaking pipes, and bad workmanship. Latent defects, on the other hand, are defects that cannot be seen and will usually manifest themselves over time. More often than not, these latent defects will appear after the 24-month DLP period. Examples of latent defects are improper foundation works that cause sinking of soil, and cracks on walls due to substandard material used.

3. Property delivered not in compliance with the specifications provided in the SPA

The developer needs to deliver the housing unit exactly as specified in the Sale and Purchase Agreement (SPA). For example, the buyer can take legal action if there are only two bathrooms in the unit when the SPA specifies three bathrooms.

4. Failure to apply for the subdivision and strata titles of the project within time pursuant to the Strata Titles Act 1985

A strata title is a title issued for stratified properties such as condominiums and apartments. Developers have to apply for a strata title for the purchasers and the application can be done once the construction of the superstructure (the frame, walls and floors) has been completed. Under the Strata Titles Act 2013, the developer must apply for a Certificate of Proposed Strata Plan (CPSP) from the Department of Survey and Mapping Malaysia (JUPEM)’s Director of Survey. The application for strata titles has to be done within one month of the issuance of CPSP.

5. Failure to transfer the individual strata title for your property to you

Under the Strata Titles Act 2013, strata titles should be issued upon vacant possession of the property. If the developer is not able to transfer the strata title to purchasers due to reasons out of its control, the developer needs to apply to the Controller of Housing for an exemption. However, the developer would still have to transfer the strata titles within a timeframe determined by the Controller of Housing.

6. Failure to convene the 1st annual general meeting (AGM) of the joint management body (JMB) or management corporation (MC)

Under the Strata Management Act 2013 (SMA), a property developer has to convene the 1st AGM of the JMB not later than 12 months from the date of delivery of vacant possession and/or the 1st AGM of the MC not later than 1 month after ¼ of the aggregate share units of the strata titles have been transferred to the purchasers.

What can you do if your housing development is postponed or categorised as a “sick” property?

The Ministry of Housing and Local Government (KPKT) categorises a housing development as a ‘sick property project’ when the construction progress is delayed by more than 30% when compared to its scheduled progress or upon the SPA expiry/lapse of vacant possession.

A “sick” property could eventually lead to the housing development being abandoned before completion. Homebuyers will suffer because they will have to continue servicing their home loans and may never ever see their “new” property. According to KPKT – as of 7 July 2022, there are 239 property developers in Malaysia with abandoned housing developments

In summary, when a property development company is wound up, a liquidator is appointed to step into the shoes of the developer to perform the duties and functions of the developer, including completing the construction of the development, delivering vacant possession and applying for individual strata titles.

In the case of a delayed development, the buyer may bring a claim against the developer for LAD at the Tribunal for Home Buyers Claims or Court.

In the case of an abandoned development by an insolvent developer, the buyer may theoretically file a claim against the developer for termination and refund of the purchase price due to a breach of the sale and purchase agreement. However, in practice, buyers would have to wait a long time, or in some cases, never receive their refund from the insolvent developer/liquidator.

Another available alternative which is rarely carried out is the statutory termination of sale and purchase agreements provided for under the Housing Development (Control and Licensing) Act 1966. In summary, you would need to fulfil the following requirements:

(i) The developer must agree in writing to terminate the sale and purchase agreements;

(ii) The application must be submitted within 6 months after the execution of the first SPA;

(ii) At least 75% of all the purchasers must agree to terminate the SPA.

Ultimately, the discretion lies with the Minister on whether to approve the application.

In the case of a delay or failure to perfect the transfer of strata tiles to the buyer, the buyer may file a claim against the developer and the liquidator for an order to compel the liquidator (who is appointed to manage the affairs of the developer) to complete the perfection of the transfer.

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Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Wednesday, 16 November 2022

3:00 pm – 4:00 pm  Malaysian Citizenship: How the Federal Court in CTEB and CCH has changed citizenship rights

About this talk

The Federal Court in 2021 decided two landmark cases concerning the right to citizenship under the Federal Constitution. The decision in CTEB seems to restrict the right to citizenship whereas the decision in CCH seems to broaden citizenship rights for children.

Join us for this online talk where our speakers will discuss these Federal Court decisions and their impact on Malaysian citizenship law.

The talk will be delivered over video conference using Zoom.us. You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • The right to citizenship in Malaysia
  • Federal Court decisions in CTEB & CCH
  • Impact of the Federal Court decisions
  • The court’s current approach to citizenship issues

Speakers

  • Jasmine Wong, Senior Associate, Individuals and Families Practice Group
  • Eric Toh, Senior Associate, Individuals and Families Practice Group
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Past Seminars

The Covid-19 lockdowns resulted in the rapid growth of the e-commerce industry. Using the internet to promote your business or selling things online may now be the norm. However, online businesses must be aware of the various frameworks that regulate the industry. Business owners must ensure that regulations with regards to registration, advertisements and the handling of the clients’ data, amongst others, are complied with to avoid any sanctions or penalties imposed by the relevant authorities.

This article will explore the laws and regulations surrounding the e-commerce industry in Malaysia and how they regulate online businesses and protect consumers’ interests.

What is E-commerce?

Electronic commerce, more commonly known as e-commerce, is the buying and selling of goods or services on the internet. E-commerce is often divided into four types of business models, which are:

  1. Business to Consumer (B2C): This is where a business sells a product or service to an individual consumer. For example, Netflix provides its consumers access to a variety of movies and shows in exchange for a subscription fee;
  2. Business to Business (B2B): This is where a business sells a product or service to another business. For example, Amazon.com provides other businesses with an online platform to sell their products to consumers;
  3. Consumer to Consumer (C2C): This is where a consumer resells a product or service to another consumer. For example, online platforms such as Carousell or eBay allow individuals to sell their used goods to other individuals; and
  4. Consumer to Business (C2B): This is where a consumer sells or provides their products or services to a business or organisation. For example, online influencers provide their services by advertisements and promoting businesses in exchange for payments or benefits.

Business Registration

Online businesses can be carried out either by an individual or a legal entity. Such legal entities have to be registered with the Companies Commission of Malaysia (“CCM”). Vendors have the option to choose what type of business entity they wish to register, such as a business, company or limited liability partnership (LLP). Each business entity has its advantages and disadvantages.

Section 5 of the Registration of Businesses Act 1956 requires all businesses to be registered with CCM. It applies to e-commerce transactions, as ‘business’ is broadly defined under Section 2 of the Registration of Businesses Act 1956 to encompass all forms of trade, commerce, craftsmanship, calling, profession, or other activity carried on for the purposes of gain, but does not include any office or employment or any charitable undertaking or any occupation specified under the Registration of Businesses Act 1956.

CCM has issued Guidelines for Registration of New Business which includes sole proprietorships or partnerships under the Registration of Businesses Act 1956. The owner or the partner must be a citizen or a permanent resident in Malaysia and 18 years and above.

Online corporate merchants operating from another country and conducting cross-border business are not required to establish a local entity in Malaysia. Please also read our article titled “How Foreign Companies can carry on Business in Malaysia”.

Regulations governing online vendors and consumers

Although e-commerce is conducted online, it is necessary for the transaction to fulfil all of the elements of a legally binding contract. There must be an offer, acceptance of the offer, consideration, and the intention to create legal relations. Section 7(1) of the Electronic Commerce Act 2006 facilitates commercial transactions through electronic means by acknowledging the formation of a valid contract formed through an electronic message. These contracts are legally valid, binding and enforceable against the contracting parties as provided under Section 7(2) of the Electronic Commerce Act 2006.

Electronic signatures that fulfil the requirements of Section 9 of the Electronic Commerce Act 2006 or the Digital Signature Act 1997 are recognised in Malaysia and ease the creation of electronic contracts. However, e-signatures are not mandatory for online transactions.

There must be compliance with the Consumer Protection Act 1999. Initially, the Consumer Protection Act 1999 did not apply to electronic transactions. However, this position was changed after the 2007 amendment to include “any trade transactions conducted through electronic means”. Accordingly, the rights of e-commerce consumers are now protected under the Consumer Protection Act 1999, including the protection against false or misleading representations, the protection against baiting of prices, and the right to gifts if advertised.

The Consumer Protection Act 1999 also guarantees that the purchased product shall be of acceptable quality, as stated under Section 32. The goods must be fit for their purpose, acceptable in appearance, free from minor defects, and safe and durable. In addition, sellers are prohibited from oppressing the consumer by entering into a sales contract that is deemed to be procedurally or substantively unfair to the consumer.

Moreover, the Consumer Protection (Electronic Trade Transactions) Regulations 2012 requires sellers to provide sufficient and correct information to the customers, as the consumers rely solely on the information provided online. Under the schedule provided under the Regulations, the information that is required to be disclosed are:

  • Name of the business and the registration number (if any);
  • Email address and telephone number;
  • Descriptions of the main characteristics of the goods and services;
  • The total price of the goods and services, including transportation costs and taxes;
  • The method(s) of payment; and
  • Terms and conditions and the estimated time of delivery

Advertisements

All content that is advertised online must adhere to the Communications and Multimedia Act 1998 and the Malaysian Communications and Multimedia Content Code (“Content Code”). Under Section 211 of the Communications and Multimedia Act 1998, any content that is indecent, obscene, false, menacing, or offensive in character with intent to annoy, abuse, threaten or harass any person is prohibited.

The Content Code further sets out guidelines and procedures for responsible content creation and consumption across all digital media platforms. The Content Code is implemented and enforced by Malaysia’s Communications and Multimedia Content Forum (“Content Forum”). Part 3 of the Content Code provides various regulations regarding advertisements, such as advertisements must not include offensive or indecent content or material whereby sellers are prohibited from advertising content that may include cigarettes, tobacco, gambling, pornography and slimming products.

In recent years, the Content Forum has been actively consulting with the public and proposing amendments to the Content Code in order to keep up with the fast-changing e-commerce landscape. In September 2021, the Content Forum issued a public consultation paper titled “Revamp of the Malaysian Communications and Multimedia Content Code” which proposed certain amendments to the Content Code in which these amendments were later incorporated into the Content Code 2022 and came into effect on 30 May 2022.

The key changes include protecting the rights of persons with disabilities in content production. Any reference to disability must be expressed in neutral terms, and reasonable effort is to be made to deliver any content or information in accessible formats for persons with disabilities.

The Content Code 2022 also widens the scope of “advertisement” to include online marketplace operators and others involved in producing and transmitting advertisements, such as online influencers and content creators. In addition, an online influencer who receives payment to endorse particular products must disclose it to the public to ensure that the marketing or promotional material is not used to mislead consumers.

There are now stricter standards on advertisers’ claims with the aim to enhance accountability for claims, testimonials, and endorsements made in advertisements. All testimonials used in advertisements should be capable of substantiation and advertisers are required to hold such substantiation ready for scrutiny without delay if and when requested.

Data Protection and Privacy

One of the major concerns of e-consumers is in relation to the processing of their personal data and the importance of maintaining their privacy online. In Malaysia, the Personal Data and Protection Act 2010 governs the processing of personal data concerning commercial transactions. Personal information such as name, address, identity card number, mobile number, email address, and credit card details is commonly collected and processed online.

The collection and processing of personal data are permitted on the condition that consent is obtained from the individual subject of the personal data (“Data Subject”). This is supported by the General Principle as set out in Section 6(1) of the Personal Data and Protection Act 2010, which states that a data user (“Data User”) shall not process personal data, that is other than sensitive personal data, regarding a Data Subject unless the Data Subject has given his consent to the processing of the personal data.

The Data User must also give written notification to the Data Subject to inform, among others, that the data is being processed, the purpose for which the data is collected and further processed, the Data Subject’s right to access and alter the personal data, the class of third parties to whom the data may be disclosed to and whether it is obligatory or voluntary for the Data Subject to supply the personal data. This written notification must be given in Bahasa Malaysia, English and any other language that may be applicable to ensure the Data Subject’s understanding.

Payment

Financial Process Exchange (FPX)

E-commerce transactions often require consumers to make online payments using online platforms. The most common method is through Financial Process Exchange (FPX), an internet-based payment in which users use their bank credentials and allow for direct crediting from a user’s account into the merchant’s account. As long as the user is a member of any participating FPX bank, they may use the FPX platform without a need for registration to make payments via online access to their bank account.

E-Money and E-Wallet

Another form of online payment is the use of electronic money (“e-money”) which is stored in electronic wallets (“e-wallet”). Under the Payment Systems (Designated Payment Instruments) Order 2003, e-money is defined as a payment instrument, whether tangible or intangible, that stores funds electronically in exchange for funds paid to the issuer and can be used as a means of making payment to any person other than the issuer. It was reported that Malaysia has cumulatively recorded 1.87 billion e-money transactions amounting to RM45.2 billion from January to November 2021. Among the recognisable forms of e-wallet used in Malaysia are GrabPay, ShopeePay and Touch n Go eWallet.

E-money in Malaysia is governed under the Financial Services Act 2013. Pursuant to Section 11 of the Financial Services Act 2013, approval must be obtained by Bank Negara Malaysia (“BNM”) before issuing any designated payment instruments, which include e-money. An issuer of e-Money (“EMI”) is defined as any person that is responsible for the payment obligation and assumes the liabilities for the e-money being issued. Prior to 2005, e-money was only permitted to be issued by banks. However, this position changed after 2005 and non-banks were allowed to issue electronic money after obtaining approval from BNM.

BNM issued a Guideline on Electronic Money, which shall be adhered to by EMIs or those that are seeking approval to be an EMI. The Guideline provides for operational and specific requirements to be met or complied with by the EMIs. The Guideline’s main regulatory objective is to promote the safety and soundness of the e-money scheme, thereby strengthening users’ confidence in the usage of e-money. On 11 June 2021, BNM issued the Exposure Draft of the Policy Document on Electronic Money (“Exposure Draft”) to seek written feedback from the public on the proposals stated in the Exposure Draft. The scope of the Exposure Draft is more extensive than the Guideline and is anticipated to replace and supersede the Guideline once the finalised Policy Document comes into effect.

Conclusion

Online businesses in Malaysia must comply with the various different frameworks and guidelines that are applicable in relation to registration, advertisements, data protection and payment options accordingly. From a commercial perspective, it is crucial for business owners involved in e-Commerce to comply with the applicable laws to build trust among its e-consumers.

By Mira Mashor

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Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Thursday, 10 November 2022

3:00 pm – 4:00 pm Land Owners’ Rights against Trespass and Nuisance

About this talk

Any unlawful use of your land is trespass. This could be temporary, such as someone passing through; or permanent, such as buildings or dumping debri. Any unlawful interference with your use of your land is a nuisance, and can include noise and smells.

Join us for this online talk where our speakers will explain trespass and nuisance and what landowners, lessees and tenants can do to protect their rights

The talk will be delivered over video conference using Zoom.us. You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Understanding the law trespass
  • Private or public nuisance
  • Case studies on trespass and nuisance
  • Remedies- injunction and damages

Speakers

  • Vivien Fan, Senior Associate, Dispute Resolution Practice Group
  • Eric Toh, Senior Associate, Dispute Resolution Practice Group
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Past Seminars

Since publishing our article “FAQ on Drink Driving in Malaysia” in July 2020, there have been several important amendments to the law on driving under the influence of alcohol (commonly referred to as “drink driving”) in Malaysia. The key amendments concern the lower limits of alcohol allowed and the heavier punishment for drink driving following the Road Transport Act (Amendment) 2020, which came into force on 23.10.2020.

This article answers a frequently asked questions relating to these amendments to the law on drink driving in Malaysia

Please read this article together with our article “FAQ on Drink Driving in Malaysia” for a comprehensive understanding of the laws on drink driving in Malaysia.

1. What are the new prescribed limits of alcohol?

Under Section 45G of the Road Transport Act 1987, the prescribed limit of alcohol has been reduced as follows:

 

According to the Ministry of Transport, the reduced prescribed limits are in line with the current standards set by the World Health Organisation (WHO).

2. What are the revised penalties for drink driving offences?

 

 

3. What happens if a person does not comply with a police officer’s order to carry out a breath test?

A person commits an offence under Section 45B of the Road Transport Act 1987 if he fails to comply with a police officer’s order to carry out a breath test. The latest amendments to the Road Transport Act 1987 have seen Section 45B of the Road Transport Act 1987 imposing a heavier punishment on those who commit such an offence.

4. What happens if a person does not comply with a police officer’s order to provide a specimen of breath, blood or urine for testing?

A person commits an offence under Section 45C of the Road Transport Act 1987 if he fails to comply with a police officer’s order to provide a specimen of breath, blood or urine when required to do so. Section 45C of the Road Transport Act 1987 has also been amended to impose a heavier punishment on those who commit such an offence.

5. What happens if a person is arrested and detained by the police for drink driving?

You can read about the relevant procedures and one’s rights during a police arrest and detention in our article published on our website entitled FAQ on Arrest, Remand and Bail in Malaysia.

Conclusion

With the reduced prescribed limits of alcohol allowed and mandatory imprisonment for drink driving under Section 45A of the Road Transport Act 1987, the police have also ramped up enforcement of the law by increasing the frequency of police patrols and road blocks.

Hence it is essential to be aware of your rights and the procedures relating to police arrest and the criminal procedure in Malaysia in general.

We have briefly answered several other frequently asked questions relating to drink driving in Malaysia in our article “FAQ on Drink Driving in Malaysia“.

If you or your friends/family or loved ones are involved in any drink driving cases, please contact us for our services to represent you at the police station, advise you on your rights, to oppose remand, and/or mitigate for a lower sentence upon conviction.

By Wong Chee En and Vivien Fan

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Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Issue:  Mdm Y*, 55, a small-time business owner, was first admitted into a private hospital in Kuala Lumpur for a surgery known as a bilateral oophorectomy (First Surgery) to remove two ovarian cysts in July 2013. The surgery was performed by a Consultant Obstetrician & Gynaecologist, and a Consultant General & Colorectal Surgeon. Mdm Y was discharged, but was rushed to the Emergency Department a few days later due to severe pain in her abdomen. A CT scan revealed that Mdm Y had a perforation of the sigmoid colon in the abdominal wall. This and further complications from various perforations and infections resulted in Mdm Y needing three more open surgeries in the course of 37 days.

Mdm Y had to live with two stoma bags for over a year, the procedures of which were later reversed. The whole experience caused her much trauma, anxiety and frustration, as it greatly affected her quality of life. Prior to the incident, Mdm Y was a very active and independent person – running her business, caring for her 16-year-old daughter, enjoying her gardening. However, after her four surgeries, Mdm Y spent most of her time in bed, in pain, and needed a caregiver. Her two businesses – a mini-market and a milk powder distribution – also suffered greatly, and she was forced to sell off her mini-market to settle her medical bill of about RM200,000.

“This incident has turned my life upside down. My abdomen is full of cuts, holes and surgery scars. Until now, I am either having diarrhoea or constipating every day. I can only take a very plain diet. I cannot eat the normal foods that people take,” Mdm Y said.

In July 2019, Mdm Y commenced a civil suit against the Gynaecologist and the Colorectal Surgeon to claim for damages for the pain and suffering that she had suffered due to the four laparotomies performed on her. The matter was called to trial at the Kuala Lumpur Sessions Court.

*Name abbreviated to respect our client’s privacy

Approach/Strategy:  Mdm Y was represented by MahWengKwai & Associates (MWKA). We engaged an expert witness, a general surgeon and professor of surgery at a medical university to explain what went wrong during surgery. The expert testified that the patient had suffered from a vascular injury (an injury to the blood vessel) during the First Surgery. This injury resulted in a lack of blood supply to Mdm Y’s colon, which eventually caused the colon tissue to become necrotic (dead tissue) and subsequently led to the perforations in her colon.

The expert witnesses for the Gynaecologist and the Colorectal Surgeon gave evidence that it was not possible to pinpoint the cause of Mdm Y’s injuries, but did not discount the possibility of a vascular injury as testified by our expert witness.

Result: In August 2021, the Sessions Court allowed Mdm Y’s claim and ordered the Defendants to pay her damages in the sum of RM823,172.

  • ​​RM200,820 for special damages;
  • RM148,000 for the pain and suffering suffered as a result of the First Surgery;
  • RM414,352 for the costs of the future treatment and surgeries;
  • RM30,000 for the pain and suffering arising from future treatments and surgeries; and
  • RM30,000 as costs to be paid by the Gynaecologist and the Colorectal Surgeon to the Plaintiff.

Both Defendants have appealed the Judgement and the matter is now pending the hearing of the appeals in the Kuala Lumpur High Court.

Impact:

The award for damages, particularly the damages for future treatment and surgeries, is welcomed for our client who has suffered and continues to suffer as a result of the negligence. The importance of having a credible and competent expert witness to explain what went wrong cannot be overstated. Allegations must be properly supported by evidence and expert opinions. Once this burden is achieved, it is for the defence to show that the injury suffered was not their fault. In the case, the court accepted on a balance of probabilities that the surgeons caused a vascular injury to the patient’s colon during surgery and that this could have been avoided had greater care been taken during the operation.

Cases like this matter to ensure that patients have legal recourse when the standard of care has not been afforded to them. It holds medical professionals to account – to accept liability for their actions, to raise their standards and improve their safety processes, and to prevent this from happening to others.

Our Medical and Personal Injury team deals with medical malpractice and negligence, and personal injury. For more information, please contact our team or Request a Free Consultation.

 

 

Jasmine Wong, Senior Associate

Tel: 03-7887 2702

jasmine.wong@mahwengkwai.com

 

 

Wong Chee En, Associate

Tel: 03-7887 2702

cheeen.wong@mahwengkwai.com

 

By Jasmine Wong, Wong Chee En and Lisa Goh

Click here to download PDF file.

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Note: This case study does not constitute legal advice. As the facts and circumstances of every case will differ, it is best that you obtain legal advice suited for the issues that you may be facing. Feel free to contact us for a complimentary legal consultation.

Wednesday, 19 October 2022

3:00 pm – 4:00 pm Forced Resignation vs Constructive Dismissal

About this talk

Forced resignation and constructive dismissal are often confused. While both result in a loss of employment, it is important to correctly identify the claim before initiating or defending the claim at the Industrial Court.

Join us for this online talk where our speakers will discuss the differences between forced resignation and constructive dismissal how these claims are handled by the Industrial Court.

The talk will be delivered over video conference using Zoom.us. You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Differences between forced resignation and constructive dismissal
  • Case studies on forced resignation
  • Case studies on constructive dismissal
  • How to avoid claims for forced resignation and constructive dismissal

Speakers

  • Naveen Joshua, Senior Associate, Dispute Resolution Practice Group
  • Carolyn Ng, Associate, Dispute Resolution Practice Group
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Past Seminars

Effective administration of construction contracts is critical for a productive business relationship between the parties involved. The construction process is one that is complex, specific, long-drawn and requires detailed documentation. It is also a project in which so many things can go wrong resulting in serious losses all around. In order to reduce risk and maximise profits, a focus on effective contract administration is important.

Contract Administrator

A contract administrator is a professional appointed, typically by the employer, to provide contract administration services on the terms of the construction contract. Despite being appointed by the employer, contract administrators must exercise independent and impartial judgement when carrying out their duties. A contract administrator must have the knowledge, skill and expertise to ensure that the parties’ obligations are fulfilled in accordance with the terms of the construction contract.

The architect, lead consultant or quantity surveyor is commonly appointed as the contract administrator. In theory, a director or employee of either the employer or contractor may serve as the contract administrator. This may be cost-effective as it avoids the need to hire a professional. However, parties must consider the possibility of bias, or even the perception of bias, which may lead to potential disputes between the parties.

While most roles and responsibilities of a contract administrator are quite standard, some duties will vary depending on the agreed terms of the contract and the type of project undertaken between the parties.

Roles and Responsibilities

Generally, the role of a contract administrator is to oversee the entire project, analyse, prevent or mitigate errors, risks and disputes. Overall, the objective is to ensure that the contract is carried out in the best possible manner. A contract administrator assists with discerning whether a project is progressing according to the terms of the contract in proportion to, amongst others, procurements, supervision and site records, milestone achievements, valuations, payments assessments, submissions of claims for additional payments, variations, extensions of time and rectifications.

Contract administrators occupy a dual-capacity role: they operate as an agent of the employer whilst acting as a decision-maker between the parties, ensuring that any evaluation or decision is carried out or made impartially and objectively. As expert skills are required for these evaluations, professionals are often the first to be considered for this role. It is important for a contract administrator to exercise reasonable standards of care carrying out their responsibilities in administering the project.

The role of a contract administrator may begin from the contract award stage, if not upon execution of the contract, until the expiry of the contract. The commencement of his role may be pre-contractual if the employer requires such pre-contractual services for the project.

Examples of a contract administrator’s scope of duties include:

  • Ensuring that the works are carried out and are progressing in accordance with the contract terms;
  • Liaising with and reporting the progress of the works to the relevant authorities, bodies or departments;
  • Managing the commissioning of works;
  • Managing the timelines and milestones of the project in view of its targeted completion date;
  • Managing the costs of the project, including adjusting the contract sum;
  • Supervising and inspecting tasks that are to be, or are already, completed;
  • Liaising with and instructing the main contractor of the project;
  • Ascertaining variations and determining applications or requests for an extension of time;
  • Inspecting and managing the defects and ensuring that such defects are remedied within the stipulated time frame;
  • Record keeping such as records of site visits, site inspections, correspondences, invoices and payment slips; and
  • Certifying works and issuing the relevant certificates (if applicable).

Contract Administration in Standard Form Contracts

In the construction industry, there are various forms of construction contracts that are widely used in Malaysia, such as the Pertubuhan Arkitek Malaysian (PAM) Contract, Institute of Engineers Malaysia (IEM) Contract, Jabatan Kerja Raya (JKR) Contract, and the International Federation of Consulting Engineers (FIDIC) Contract. The PAM Standard Forms of Contract and IEM Standard Forms of Contract are typically used in the private sector, the JKR Standard Forms of Contract for government or public sector projects and the FIDIC Standard Forms of Contract in international or cross-border construction contracts.

PAM Contract 2018

Pertubuhan Arkitek Malaysia (PAM), or the Malaysian Institute of Architects, introduced the fourth version of their standard forms of contract, known as PAM Contract 2018. The architect is typically appointed as the contract administrator under the PAM Contract 2018. Some of the duties of the architect as the contract administrator include:

  • The architect will set out the quality and standard of materials, goods and workmanship (if applicable) in addition to those described in the contract documents.
  • The architect will use the works programme to monitor progress and rely on the progress of the works as a basis for the assessment of extension of time and the effect of the delay and/or disturbances to the progress of the works.
  • The architect will determine all levels required for the execution of the works and provide the contractor with the relevant information and drawings to carry out the works.
  • The architect will inspect any work covered up, or arrange for, or carry out any test on any materials and goods already incorporated in the works.
  • The architect can order a variation, or sanction any variation, made by the contractor.

JKR Contracts

The Jabatan Kerja Raya, otherwise known as the Public Works Department of Malaysia, provides standard forms of contract for involving public agencies, including building and infrastructure works. The JKR Standard Forms of Contract, also referred to as the PWD Standard Forms of Contract, have different forms, such as:

  • Form 203: Where drawings and specifications form part of the contract;
  • Form 203A: Where bills of quantities form part of the contract;
  • Form 203N: Where there is a nominated supplier where the main contract is based on Form 203 or Form 203A;
  • Form 203P: Where there is a nominated supplier where bills of quantities form part of the contract in conjunction with Form 203A; and
  • Form DB: The standard form of design and build contract.

Under Form 203 and Form 203A, the contract administrators are referred to as superintending officers. Superintending officers can be any person who is a full member of a professional body associated with the construction industry, such as an engineer, architect or quantity surveyor. A superintending officer is tasked with ensuring the successful completion of the project. The roles include:

  • Being responsible for the overall supervision and direction of said works.
  • Being responsible for finding out the principal authority responsible for monitoring the environmental aspects of construction and ensuring that construction activities align with the laws and regulations meant to protect the environment.
  • Assessing the situation and coming up with efficient and effective solutions to ensure the project reaches the completion stage.

Meanwhile, Form 203N is a standard form of contract for a nominated sub-contractor that will comply with the main contract, i.e. either Form 203 or Form 203A. The superintending officer will also be responsible for the subcontracted works rendered and completed by the nominated subcontractor in line with the main contract. On the other hand, the contract administrator in Form DB is referred to as the project director, who will issue all instructions, notifications, consent or approvals to the contractor of the contract, and such instructions, notifications, consent or approvals shall be complied with by the contractor.

FIDIC Contracts

The International Federation of Consulting Engineering Contracts (FIDIC Contracts) has been around for 50 years as an international standard for the engineering industry, being recognised globally in many jurisdictions. The key to their long-standing success in the construction industry is attributed to their balanced approach to the roles and responsibilities of the relevant parties and effective allocation and management of risk.

FIDIC Contracts include four standard forms, namely FIDIC Conditions of Contract for Construction (Red Book), Plant and Design/Build (Yellow Book), EPC Turnkey Projects (Silver Book) and FIDIC Short Form of Contract (Green Book). The engineer is typically the contract administrator when it comes to a FIDIC Contract is tasked to:

  • Assess projects on a case by case basis as FIDIC acknowledges special conditions may be necessary for specific issues since no two projects are the same.
  • Offer assistance on the practice of Particular Conditions and provide examples of areas that require special provisions.
  • Inspect all works while carrying out routine testing.
  • Issue Notices regarding any errors to be corrected.
  • Issue Taking-Over, Performance and Payment Certificates.
  • Assess and make a neutral determination.
  • Ensure that personnel behave accordingly and remove them from the site if they are not.

Conclusion

The primary responsibility of ensuring a project is completed and executed properly is borne by the contract administrator. Contract administrators add value to a construction project by ensuring that the construction contract will be carried out and administered effectively and impartially, by assisting in the execution of the contract, management of the works, and mitigation or prevention of disputes, all of which contribute significantly to the timely completion and success of the project.

By Christine Toh, Tommy Wong and Wee Xing Yi, Jasmine

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Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

Wednesday, 21 September 2022

3:00 pm – 4:00 pm Inheritance and Estate Administration Disputes

About this talk

Wills and estate planning are intended to allow the person to have a say on how his or her estate is handled and distributed. However, disputes often arise from poor planning, unenforceable wills or when administrators or executors don’t act in the best interests of the beneficiaries. Join us for this online talk where our speakers will discuss common estate administration disputes and how these problems can be resolved.

The talk will be delivered over video conference using Zoom.us. You can either view the talk from your web browser or download the Zoom app.

Talk Points

  • Estate planning and administration
  • Disputes on the  enforcement of wills
  • Disputes on the administration of estates
  • Avoiding and resolving disputes

Speakers

Daphne Rethual, Associate, Corporate Practice Group

Aaron Liew, Associate, Corporate Practice Group

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Past Seminars

The landmark Federal Court decision in Semenyih Jaya Sdn Bhd v Pentadbir Tanah Daerah Hulu Langat & Another case [2017] 5 CLJ 526 held that in land acquisition proceedings, an aggrieved party has the right of appeal against the decision of the High Court on questions of law. The Federal Court said that the bar to appeal in Section 49(1) of the Land Acquisition Act 1960 is limited to appeals on the quantum of compensation and is not a complete bar on all appeals to the Court of Appeal even if the appeal affects the quantum of compensation.

Following Semenyih Jaya, however, the Federal Court in the two following cases appear to have narrowed the scope of possible appeals by a restrictive meaning to what amounts to a “question of law” for the purposes of an appeal under section 49(1) of the Land Acquisition Act 1960:

1. Amitabha Guha (as beneficiary for the estate of Madhabendra Mohan Guha) v Pentadbir Tanah Daerah Hulu Langat [2021] 4 MLJ 1 (Federal Court)(“Amitabha Guha”); and

2. Pentadbir Tanah Daerah Johor v Nusantara Daya Sdn Bhd [2021] 7 CLJ 1 (Federal Court) (“Nusantara Daya”).

Amitabha Guha on “Question of Law”

The Federal Court in Amitabha Guha made the following observations as to what is a “question of law” that justifies an appeal under the Land Acquisition Act 1960:

1. A question of law is an issue involving the interpretation of law (statutes or legal principles) and the application of the law to the facts of each individual case;

2. Questions of law are questions about what the correct legal test is. Questions of mixed law and fact are questions about whether the facts satisfy the legal tests;

3. A question of law is a question concerning the legal effect to be given to a set of undisputed facts. This includes an issue which involves the application or interpretation of a law;

4. The question of whether a decision-maker has jurisdiction to determine a particular matter is usually considered a question of law reviewable by a court on a standard or correctness;

5. Questions of law involve errors of law committed by a decision-maker. Errors of law includes the application of the wrong law, or a finding of fact in complete absence of any evidence;

6. Questions where there is real doubt as to the law on a particular point;

7. Questions of law includes the correctness of (a) pure statements of law (eg, as to correct interpretation of a statutory provision), and (b) the inferring of a conclusion from the primary facts (where the process of inference involves assumptions as to the legal effect of consequences of the primary facts).

Questions raised in Amitabha Guha

In Amitabha Guha, the following seven questions were raised and argued at the Federal Court. The Federal Court decided that questions 1 and 2 were not questions of law while the remaining questions were:

1. Question 1: Whether in accordance with paragraph 1(1A) of the First Schedule of the Land Acquisition Act 1960, the principle of equivalence and the decision of the Federal Court in Semenyih Jaya Sdn Bhd v. Pentadbir Tanah Daerah Hulu Langat & Another Case [2017] 5 CLJ 526; [2017] 3 MLJ 561 (Semenyih Jaya), the High Court was right to disregard some of the appellants’ comparables including the acquisition comparables – that is, the amount of compensation awarded by the Land Administrator for lands (which were situated within the vicinity of the acquired lands) when assessing the market value of the acquired lands?

Federal Court:

  • Question 1 is not a question of law;
  • There is nothing to indicate that the High Court or the assessors had committed any error of law or fact in not properly considering the evidence or in failing to apply the principles relating to the determination of compensation;
  • It is for the assessors in their professional assessment and judgment to decide on the suitability of the comparables; and
  • Similarly, the judge is vested with the discretionary power to consider and decide on the most suitable comparables.

2. Question 2: Whether the High Court was legally obliged to award injurious affection for all the four contiguous lots (adjacent to the acquired lands) owned by the appellants in view of the following factors:

(a) injurious affection was awarded for the remainder of the acquired lands (owned by the appellants, of which a portion was compulsorily acquired by the respondent under the of the Land Acquisition Act 1960 1960);

(b) the said four contiguous lots suffered from the same negative impact as the remainder of the acquired lands and were restricted to only one inadequate access road hence significantly impairing its development potential; and

(c) both assessors awarded injurious affection for the four contiguous lots?

Federal Court:

  • Question 2 is a question of fact; and
  • The learned judge’s findings are not unsubstantiated by the evidence and facts.

3. Question 3: Whether for the purpose of computation of late payment charges under section 32 of the Land Acquisition Act 1960, the phrase “taking possession of the land” in section 32(1C) of the Land Acquisition Act 1960 means taking physical possession of the land or taking formal possession of the land under section 22 of the Land Acquisition Act 1960?

4. Question 4: Whether for the purpose of computation of late payment charges under section 48 of the Land Acquisition Act 1960, the phrase “taking possession of the land” in section 48 of the Land Acquisition Act 1960 means taking physical possession of the land or taking formal possession of the land under section 22 of the Land Acquisition Act 1960?

Federal Court:

  • The phrase “taking possession of the land” in section 32(1C) of the Land Acquisition Act 1960 means taking physical possession of the subject lands; and
  • The phrase “took possession of the land” in section 48 of the Land Acquisition Act 1960 means taking formal possession of the subject lands by the Land Administrator under section 22 of the Land Acquisition Act 1960.

5. Question 5: Whether the provisions of the Land Acquisition Act 1960, that is the Amending Act No. A1517 (2016 Amending Act ) – in particular, the amended rate of late payment charges, that is, 5% per annum under sections 32 and 48 of the Land Acquisition Act 1960 – which came into force on 1 December 2017, apply to land reference proceedings pending before the High Court on 1 December 2017 in view of section 43 of the Amending Act?

Federal Court:

  • The 2016 amendments to sections 32 and 48 of the Land Acquisition Act 1960 are not retrospective so as to deprive the appellants of their substantive rights to late payment charges; and
  • The appellants acquired the right to late payment charges when they initiated the land reference proceedings in the High Court prior to the amendments coming into force.

6. Question 6: Whether the High Court ought to have awarded compound interest in order to adequately compensate the appellants for the loss suffered in accordance with the principle of equivalence?

Federal Court: Pursuant to section 32 of the Land Acquisition Act 1960, the appellants are entitled to late payment charges at 8% per annum.

7. Question 7: Whether the High Court ought to have awarded costs to the appellants.

Federal Court: The High Court was not wrong in refusing costs to the appellants.

Nusantara Daya on “Question of Law”

In Nusantara Daya, the Federal Court again had to consider the interpretation of Section 49(1) of the Land Acquisition Act 1960 and whether the appellant’s appeal was barred by the proviso to Section 49(1) of the Land Acquisition Act 1960.

The Federal Court in Nusantara Daya found that Semenyih Jaya did not define what is a “question of law” for the purpose of Section 49(1) of the Land Acquisition Act 1960. As a starting point, the Federal Court in Nusantara Daya adopted the general proposition set down in Amitabha Guha that “a question of law is an issue involving the interpretation of law (statutes or legal principles) and the application of the law to the facts of each individual case”.

However, the Federal Court stated that the general proposition must be appreciated, understood and applied in the context of the proviso to Section 49(1) of the Land Acquisition Act 1960. This general proposition should not be taken as suggesting that section 49(1) of the Land Acquisition Act 1960 is to be given a liberal reading to render nugatory the clear intent of precluding appeals from decisions of the High Court on compensation. This proposition is not to be read as allowing in any way, appeals on compensation.

Accordingly, the Federal Court held that what may amount to a “question of law” under the proviso to Section 49(1) of the Land Acquisition Act 1960 must be narrowly and strictly construed. The Federal Court then opined that the suggestions or examples cited in Amitabha Guha are purely general suggestions, examples or illustrations and are not indicative of what a “question of law” is under section 49(1) of the Land Acquisition Act 1960.

Questions raised in Nusantara Daya

After explaining that a “question of law” must be narrowly and strictly construed,, the Federal Court looked at the ten questions of law raised at the Court of Appeal:

1. Whether the High Court is permitted to use or rely on a Government valuation report when it is proven that the report is misleading and failed to disclose material information?

2. Whether the failure to disclose material information in a valuation report prepared in connection with land acquisition cases renders the report unreliable and that consequently such a tainted report ought to be disregarded?

3. Whether the High Court in a land acquisition case is entitled to embark upon its own assessment of the market value of the land acquired, disregarding the valuation reports prepared by professional valuers and disregarding evidence of comparable sales referred to therein by professional valuers?

4. Whether the High Court erred in law in failing to apply the “mean principle” when faced with evidence from competent valuers of a range of price a property might fetch in the open market?

5. Whether the High Court erred in law in failing to hold that the respondent’s conclusion (that Lot 20952 Township of Johor Bahru was not transacted at RM42,000,000 but was instead the proceeds of a joint-venture) was wrong and that the respondent had thereby disregarded an appropriate comparable on an erroneous assumption?

6. Whether the High Court erred in law in failing to hold that the Government valuer had improperly rejected a comparable by the appellant’s valuer simply on account that the comparable was not in the immediate vicinity of the subject land?

7. Whether the High Court erred in law in holding that the potential development value of the scheduled land had already been factored into the transacted value of a comparable that had no development potential?

8. Whether the High Court erred in law in concluding that a deduction should be made to the scheduled land because of its larger size on the basis that it would attract lesser potential buyers?

9. Whether the High Court erred in law in holding that the proximity of a closed water treatment plant and a house of worship to the scheduled land is a negative factor that would impact potential buyers when there was no such evidence before the High Court?

10. Whether the High Court erred in law in failing to order the respondent to refund the deposit to the appellant despite the increase in the award?

After examining the questions, the Federal Court held that the questions are all about the award of compensation made by the High Court, how the final amount was arrived at and how that amount was wrong.

The High Court, as the land reference court, was entitled to make various deductions in order to arrive at the market value of the land. The deductions are fact-based decisions based on evidence adduced. The analysis of such evidence involves the court’s appreciation and impression of such evidence when applying principles of valuation to the facts. The Federal Court held that room must be given for a divergence of opinion on the evaluation of such evidence; more so when the appeal is statutorily limited.

The Federal Court further held that the issues raised were all complaints against the award of compensation, what the learned judge did, what the learned judge should not have done, and what the learned judge ought to have done in order to arrive at the award that the High Court finally did.

The Federal Court also held that the allegations of acting without evidence or acting against the evidence of a particular witness or report; or how a particular piece of evidence is to be treated, are actually complaints generally made in order to meet the general principles for appellate intervention.

Such complaints are generally correct in relation to (non land reference) appeals. Without the proviso to Section 49(1) of the Land Acquisition Act 1960, such appeals on points of law may be entertained even if the appeal is on compensation or the amount of compensation. However, in the presence of the proviso, and the restrictive reading given to the meaning of question of law as allowed in Semenyih Jaya, such complaints or grounds do not make the questions posed, questions of law.

The Federal Court reiterated that the complaints in the appeal essentially concerned issues of fact or application of valuation principles when computing the amount of compensation to be awarded for the acquisition. The aforementioned are not questions of law and not within the narrow and limited remit of what or how such a question of law may be properly and validly taken on appeal under section 49(1) of the Land Acquisition Act 1960.

Allowing questions of law to be posed in appeals on compensation, in the Federal Court’s opinion, should not mean or entail the same process of re-hearing where the Court of Appeal or the Federal Court “review the inferences and conclusions of the High Court and to draw its own inferences and conclusions” in relation to valuation. Otherwise, it would undermine the plain intent of the proviso to section 49(1) of the Land Acquisition Act 1960, render the intent of Parliament meaningless and the courts be accused of rewriting the law.

Based on the above, the Federal Court concluded that none of the questions posed, in any sense, and certainly not in the limited sense of Semenyih Jaya, were questions of law.

Misappreciation of evidence v. No evidence

The Federal Court in Nusantara Daya also held that any complaints regarding the wrong appreciation or application of evidence by the High Court are also not sufficient to constitute “questions of law” for the purposes of an appeal under section 49(1) of the Land Acquisition Act 1960.

However, it remains to be seen whether the Federal Court will in future decide that a question of law exists where there is a finding of fact by the High Court in the absence of any evidence. The Federal Court in Amitabha Guha had held that questions of law involve errors of law committed by a decision-maker which include a finding of fact in complete absence of any evidence.

There is arguably a difference between a misappreciation of evidence by the High Court and a finding of fact in absence of any evidence altogether

Conclusion

The Federal Court in Amitabha Guha and Nusantara Daya have taken a restrictive definition on what amounts to a “question of law” for the purposes of an appeal under section 49(1) of the Land Acquisition Act 1960. If an appeal concerns issues of fact or application of valuation principles when computing the compensation sum in acquisition proceedings, it is likely that the appeal will not be entertained as those issues are not “questions of law” for the purposes of section 49(1) of the Land Acquisition Act 1960.

Appeals against the decision of the High Court in a land reference remains an uphill challenge. This is especially so when the question of law to be raised on appeal relates in some way to the quantum of compensation awarded.

To find out more about the law on land acquisition in Malaysia, click here to read our article titled “Compulsory Land Acquisition in Malaysia, Compensation and Disputes” or click here to watch our online talk titled “Land Acquisition Appeals From the High Court to the Court of Appeal”

By Eric Toh

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Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.

The Employment Act 1955 is the main legislation governing the employer-employee relationship in Malaysia. Updates to the Employment Act 1955 have been long overdue as there have been many concerns and gaps in relation to the protection afforded to employees. On 30 March 2021, the Employment (Amendment) Bill 2021 was passed by the Dewan Rakyat where several key amendments were tabled.

The Employment (Amendment) Bill 2021 was passed with the objective to increase and improve the protection and welfare of workers in the country in line with international labour standards as outlined by the International Labour Organisation. Given that the First Schedule of the Employment Act 1955 prescribes the application of the Act to certain categories of employees, there are uncertainties on whether the amendments would alter such categories once coming into force. As such, Malaysian employers and employees have been eagerly waiting for revisions to the First Schedule to be gazetted in relation to the categories of employees that fall within the purview of the amendments.

After a long wait, the Human Resources Minister, M Saravanan announced that the Employment (Amendment) Act 2022 will come into force on the 1 September 2022 simultaneously with the Revised First Schedule of the Employment Act 1955 (“Revised First Schedule”) that was gazetted on 15 August 2022. These amendments are widely perceived to be far-reaching as the scope of the amended Employment Act 1955 covers all employees, irrespective of their monthly wages. However, it is subject to the Revised First Schedule which will be explored further below.

Key Amendments to the Employment Act 1955

The amended Employment Act 1955 offers employees more protection in line with standards prescribed by the International Labour Organisation. Some of the key amendments include the following:

Revised First Schedule of the Employment Act 1955

We will now explore the amendments made to the First Schedule of the Employment Act 1955 by virtue of the Ministerial Order. Prior to the amendments, the Employment Act 1955 only applied to employees earning up to RM2,000 per month and/or to a specified group of employees regardless of monthly wages.

However, the First Schedule has been revised and the Employment Act 1955 is now applicable to all employees irrespective of wages, with the exception that certain provisions do not apply to employees earning more than RM4,000 per month. A brief comparison between the pre and post-amendments of the First Schedule is shown in the table below:

Employees whose monthly wages exceed RM4,000 are excluded from certain provisions and/or benefits under the Revised First Schedule. These provisions are listed below:

The Revised First Schedule also prescribes that the above provisions will continue to be applicable to the following categories of employees, regardless of their salary:

(a) Paragraph 2(1):  Employees engaged in manual labour including such labour as an artisan or apprentice;

(b) Paragraph 2(2):  Employees engaged in operation or maintenance of any mechanically propelled vehicle operated for the transport of passengers or goods or for reward or for commercial purposes;

(c) Paragraph 2(3):  Employees supervising or overseeing other employees engaged in manual labour employed by the same employer in and throughout the performance of their work;

(d) Paragraph 2(4):  Employees engaged in any capacity in any vessel registered in Malaysia and who is not an officer certificated under the Merchant Shipping Acts of the United Kingdom as amended from time to time, is not the holder of a local certificate as defined in Part VII of the Merchant Shipping Ordinance 1952, or has not entered into an agreement under Part III of the Merchant Shipping Ordinance 1952; and

(e) Paragraph 2(5):  Employees engaged as a domestic employee.

Conclusion

The amended Employment Act 1955 now offers protection to a much larger category of employees irrespective of wages or occupation in Malaysia. Employers should note that since the effective date of the amended Employment Act 1955 is fast approaching, they should review and revise their employees’ employment contracts and policies to ensure compliance. Employers are also urged to take the necessary steps to comply with the Amended Act as well as the Revised First Schedule. For instance, the requirement to put up a notice conspicuously in the workplace to raise awareness on sexual harassment as well as to prepare the necessary application forms for flexible working arrangements and the process involved in hiring foreign employees before the Amended Act comes into force. During this process, employers should also remain vigilant while reviewing policies or revising terms of employment contracts which may have set out clauses which are contrary to the amended Employment Act 1955 as they will be deemed void and of no effect under Section 7 of the Employment Act 1955.

Please contact us should you require our services and advice on your company’s compliance with the amended Employment Act 1955.

By Naveen Joshua Solomon & Thineshvary Maniselvam

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Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each and every case will differ and therefore will require specific legal advice. Feel free to contact us for complimentary legal consultation.
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