(iii) Employees\' Social Security Act 1969 PDF

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(iii) Employees' Social Security Act 1969 Halsbury's Laws of Malaysia - Employment (Volume 8)

Halsbury's Laws of Malaysia - Employment > 200 – Employment > (2) Rights and Obligations Arising During Employment > (2) Statutory Duties > C. Other Statutes (iii) Employees' Social Security Act 1969

[200.062] In general The Employees' Social Security Act 19691 applies to all industries2 having one or more employees including employees employed by the immediate employer3. The term ‘employee’ for the purposes of the Act means any person who is employed for wages under a contract of service4 or apprenticeship with an employer and:

(1) who is directly employed by the principal employer5 on any work of, or incidental or preliminary to or connected with the work of, the industry, whether such work is done by the employee on the premises of the industry or elsewhere; or (2) who is employed by or through an immediate employer on the premises of the industry or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the industry or which is preliminary to the work carried on in or incidental to the purpose of the industry; or (3) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service6.

Under the Act, all employees in industries to which it applies7, are to be registered with the Social Security Organisation and be insured in the manner provided under the Act8. 1

Ie the Employees' Social Security Act 1969 (Act 4). 2 ‘Industry’

means any business, trade, undertaking, manufacture or calling of employers, and includes any calling, service, employment, handicraft or industrial occupation or avocation of employees: Employees' Social Security Act 1969 s 2(10). 3 Employees'

4 As

Social Security Act 1969 s 3. For meaning of ‘immediate employer’ see [200.063] note 5.

to contracts of service see [200.002].

5 ‘Principal

employer’ means the owner of an industry or the person with whom an employee has entered into a contract of service or apprenticeship and includes:

(1)

a manager, agent or person responsible for the payment of salary or wages to an employee;

(2)

the occupier of a factory;

(3)

the legal representative of a deceased owner or occupier;

(4)

any government in Malaysia, department of any such government, local authority or statutory body and, where an employee is employed with any such government, department, authority or body or with any officer on behalf of any such government, department, authority or body, the officer under whom such employee is working,

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Page 2 of 11 (iii) Employees' Social Security Act 1969 provided that no such officer will be personally liable under the Employees' Social Security Act 1969 for anything in good faith done or omitted to be done by him as an officer of such employer: s 2(19). 6 Employees'

Social Security Act 1969 s 2(5). Note that s 2(5) is subject to s 3 (as amended by the Employees’ Social Security (Amendment) Act 2012 (Act A1445) s 2(a) which came into force on 1 January 2013).On the other hand, where an employee has become liable to pay contributions, although the employee's wages subsequently exceeded RM2,000 a month, that employee's wages will be deemed to be RM2,000 for the purposes of the Act and he will still fall within the purview of the Act: s 7(1), Sch 1. See RR Chelliah Brothers v Employees Provident Fund Board [1971] 1 MLJ 131, PC , where an interpretation of a similar provision under the Employees Provident Fund Ordinance 1951 (FM Ord 21 of 1951) (repealed) was given. In Boustead Trading Sdn Bhd v Employees Provident Fund Board [1970] 2 MLJ 56, ‘wages’ was construed to include both the wages received from the employee's permanent employment and the employee's part time employment which were below the statutory limit. 7 The

Act applies to all industries having one or more employees: Employees' Social Security Act 1969 s 3(1). In s 3, ‘employees’ include any employee employed by the immediate employer: s 3(2). However, the Employees' Social Security Act 1969 does not apply to persons described in Sch 1: s 3(3) (as inserted by the Employees’ Social Security (Amendment) Act 2012 s 3). The Minister may, by order published in the Gazette, amend Sch 1: s 3(4) (as inserted). Every industry to which the Act applies must be registered with the Social Security Organisation: s 4. The employer of every industry must furnish to the appropriate office a declaration in Form 1: see the Employees' Social Security (General) Regulations 1971 (PU (A) 99/1971) reg 10. 8 Employees'

Social Security Act 1969 s 5.

[200.063] Contributions The employer and the employee1 are required to make monthly contributions to the Social Security Organisation at the end of each month2. A principal employer3 must pay the employer's and the employee's contribution in respect of every employee4 employed directly by him or through an immediate employer5 for each month in respect of the whole or part of which wages6 are payable to the employee7. In the case of an employee directly employed by him, the principal employer will be entitled to recover from the employee, that employee's contribution by deduction from his wages, provided it relates to the period or part of the period in respect of which the contribution is payable or in excess of the sum representing the employee's contribution for the period8. Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer will be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise recover it from him9. Any sum deducted by the principal employer from wages will be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted10. A principal employer who has paid contribution in respect of an employee employed by or through an immediate employer will be entitled to recover the amount of contribution so paid (that is to say the employer's and employee's contribution) from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payable by the immediate employer11. In such a case, the immediate employer will be entitled to recover the employee's contribution from the employee employed by or through him by deduction from wages and not otherwise12. The method of making contributions is set out in the Employees Social Security (General) Regulations 197113. The punishment for, inter alia, failing to pay any contribution which is liable to be paid under the Act is imprisonment for up to two years or a fine not exceeding RM10,000 or both14. Upon a person being found guilty, the court will order such person to pay to the Social Security Organisation the amount of any contribution together with any interest credited thereon due and payable to the Social Security Organisation and certified by the authorised officer of the Organisation to be due from such person prior to the date of such finding of guilt15 and such arrears need not be confined to the subject matter of the charge16.

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Page 3 of 11 (iii) Employees' Social Security Act 1969 1

For the meaning of ‘employee’ see [200.062]. 2 Employees'

Social Security Act 1969 (Act 4) s 6. The contribution rates specified in Sch 3.The contributions fall into the following two categories, namely: (1) the contributions of the first category, being the contributions payable by or on behalf of the employees insured against the contingencies of invalidity and employment injury; and (2) the contributions of the second category, being the contributions payable by or on behalf of employees insured only against the contingency of employment injury: s 6(2). The contributions of the first category will be shared by the employer and the employee in the ratio specified in Sch 3 Pt 1 (s 6(4)) whilst the contributions of the second category will be paid wholly by the employer (s 6(5)). 3 For

the meaning of ‘principal employer’ see [200.062] note 5.

4 Employees'

Social Security Act 1969 s 7(1).

5 ‘Immediate

employer’ means a person who has undertaken the execution on the premises where the principal employer is carrying on his trade or business, profession, vocation, occupation or calling, or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the trade or business, profession, vocation, occupation or calling, of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such trade or business, profession, vocation, occupation or calling, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily lent or on hire to the principal employer: Employees' Social Security Act 1969 s 2(9). 6 ‘Wages’

means all remuneration payable in money by an employer to an employee including any payment in respect of leave, holidays, overtime, and extra work on holidays but does not include:

(1)

any contribution payable by the principal employer or the immediate employer to any pension fund or provident fund, or under the Act;

(2)

any travelling allowance or the value of any travelling concession;

(3)

any sum paid to an employee to defray special expenses incurred as a result of his employment;

(4)

any gratuity payable on discharge or retirement;

(5)

annual bonus;

(6)

any other remuneration as may be prescribed: Employees' Social Security Act 1969 s 2(24).

7 Employees'

Social Security Act 1969 s 9(1).

8 Employees'

Social Security Act 1969 s 7(2) and proviso.

9 Employees'

Social Security Act 1969 s 7(3).

10 Employees'

Social Security Act 1969 s 7(4).

11 Employees'

Social Security Act 1969 s 8(1).

12 Employees'

Social Security Act 1969 s 8(2). This is subject to the conditions set out in s 7(2) (see text to note 8 above): s

8(2). 13 See the Employees' Social Security (General) Regulations 1971 (PU (A) 99/1971) Pt II (regs 10–44F) and the Employees' Social Security Act 1969 ss 6–14.

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Page 4 of 11 (iii) Employees' Social Security Act 1969 14 See

the Employees' Social Security Act 1969 s 94(a).

15 Employees'

Social Security Act 1969 s 94A(1). Note that the certificate of the authorised officer is prima facie evidence of the amount due and payable: s 94A(1). 16 PP

v KATS Cleaning Services (S) Sdn Bhd [1988] 1 MLJ 133.

[200.064] Benefits Upon employment injuries1 occurring, insured employees2 or their dependants3 are entitled to the following benefits:

(1) periodical payments in case of invalidity4; (2) periodical payments for suffering due to disablement; (3) periodical payments to dependants where the insured person dies; (4) payments for funeral benefit or expenses to the persons5 on the death of an insured person as a result of an employment injury sustained as an employee; (5) periodical payments to insured person who is in receipt of invalidity pension or disablement benefit (if he is so disabled as to need constant personal attendance)6; (6) medical treatment; and (7) periodic payments to dependants of an insured person who dies which in receipt of invalidity pension7.

For an employee to be eligible for benefits, the injury must arise in the course of and out of the employment, and for this purpose, the Act presumes that where an injury arises in the course of an employment, it also arises out of that employment, unless the contrary is proved8. An accident happening to an insured person is deemed to arise out of and in the course of his employment if the accident happens while the insured person:

(a) is travelling on a route between his place of residence9 or stay10 and his place of work11; (b) is travelling on a journey made for any reason which is directly connected to his employment; or (c) is travelling on a journey between his place of work and the place where he takes his meal during any authorised recess12.

However, if the accident occurs during any interruption of, or deviation from, the insured person's journey made for any of the purposes stipulated above, the accident is not deemed to arise out of and in the course of his employment13. Where an insured person dies his dependants would receive benefits as prescribed by the dependants’ benefit rates14. Benefits will be paid to widows or widowers during life15, and in the case of children, until the age of 21 or until marriage, whichever is earlier16. 1

‘Employment injury’ means injuries or diseases arising out of and in the course of employment in an industry to which this Act applies: Employees' Social Security Act 1969 (Act 4) s 2(6). In Ketua Pengarah Pertubuhan Keselamatan Sosial, Kuala Lumpur

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Page 5 of 11 (iii) Employees' Social Security Act 1969 v Philip bin Felix @ Philip bin Sintik [2004] 5 MLJ 251, it was held that the purpose of the Employees' Social Security Act 1969 is to provide social security; accordingly, it follows that s 2(6) should not be given a restrictive and literal interpretation. 2 For

the meaning of ‘employee’ see [200.062]. For the meaning ‘insured person’ see [200.065] note 5.

3 Under

the Employees' Social Security Act 1969 s 2(3), ‘dependant’ means any of the following relatives of a deceased insured person, namely:

(1)

a widow or widower or a child; and

(2)

if there is no widow or widower or child:

(a)

a daughter, if married and a minor, or if widowed and a minor;

(b)

an unmarried minor brother or sister or a widowed minor sister;

(c)

a widowed daughter-in-law;

(d)

a minor child of a pre-deceased son;

(e)

a minor child of a pre-deceased daughter where no father of the child is alive;

(f)

a parent; or

(g)

a grandparent if no parent of the insured person is alive; and

provided that the Minister may give such direction as appears to him to be necessary for the removal of hardship to any other relative of a deceased insured person including an invalid widower.‘Minor’ means a person who has not attained 21 years of age: s 2(13). 4A

person is considered as suffering from invalidity if he becomes incapable of engaging in any substantial gainful activity due to a specific morbid condition of a permanent nature: Employees' Social Security Act 1969 s 16(1), (2). It is insufficient merely to show that he is suffering from an incurable illness without showing that he is incapable of engaging in any substantial gainful activity: S Constantine v Social Security Organisation [1998] 1 MLJ 160. An employee is entitled to invalidity pension only when the medical board (and to the appellate medical board when necessary) concludes that he is an invalid. The medical board must so certify, if by reason of a morbid condition of a permanent nature, the employee is incapable of engaging in any substantially gainful activity. The medical board and the appellate medical board have the exclusive right to decide on issues of invalidity or disablement, as they involve medical questions which would best be answered by the medical profession and jurisprudence. The Social Security Appellate Board, comprising of legally qualified persons, would not be competent to decide on such issues: Ketua Pengarah Pertubuhan Keselamatan Sosial v Rahim Darus [2001] 5 MLJ 689. 5 Ie

as mentioned in the Employees' Social Security Act 1969 s 29 (as amended by the Employees’ Social Security (Amendment) Act 2012 (Act A1445) s 4 which came into force on 1 January 2013). 6 This

is provided that the existence of the degree of incapacity qualifying an invalid or disabled insured person for constantattendance allowance must be verified by a duly appointed medical board or the appellate medical board or any other authority specified in this behalf by the regulations, in such manner as is prescribed by the regulations: Employees' Social Security Act 1969 s 15(e) proviso. 7 See

the Employees' Social Security Act 1969 s 15.

8 Employees'

Social Security Act 1969 s 23. If an employee who is employed in any occupation listed in Sch 5 (as substituted by the Employees’ Social Security (Amendment of Fifth Schedule) Order 2008 (PU (A) 32/2008) O 2) contracts any disease within 60 months of ceasing his employment, the disease will be deemed to have arisen out of and in the course of the employment, unless the contrary is proved; provided that the period of 60 months may, at the discretion of the Social Security Organisation, be further extended upon production of medical and other relevant evidence in support thereof: s 28 and proviso.

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Page 6 of 11 (iii) Employees' Social Security Act 1969 9 The

term ‘residence’ can be described as the permanent or habitual home of a person: Ketua Pengarah Pertubuhan Keselamatan Sosial v Rajaparameswari Marimuthu [2004] 4 CLJ 528. A weekend retreat home does not constitute a place of residence or stay in relation to his place of work for purpose of the Employees' Social Security Act 1969 s 24(1)(a): Ketua Pengarah Pertubuhan Keselamatan Sosial v Jusoh Abu Bakar [2003] 1 CLJ 383. 10 The

term ‘stay’ connotes a meaning that the person would stop at the place only for a short while, ie, a temporary stop: Ketua Pengarah Pertubuhan Keselamatan Sosial v Rajaparameswari Marimuthu [2004] 4 CLJ 528. 11 An

injury suffered by an employee due to an accident when he was travelling from his weekend retreat to his home to change into his uniform and proceed therefrom with his employer's van to work was found not to be an employment injury: Ketua Pengarah Pertubuhan Keselamatan Sosial v Jusoh Abu Bakar [2002] 7 MLJ 17, [2003] 1 CLJ 383. However, an injury suffered by an employee in a road accident while travelling from her daughter's house, where she stayed the night, to the bus station to catch the factory bus was found to be an employment injury: Ketua Pengarah Pertubuhan Keselamatan Sosial v Rajaparameswari Marimuthu [2004] 4 CLJ 528. 12 Employees'

Social Security Act 1969 s 24(1). In Ketua Pengarah Pertubuhan Keselamatan Sosial v Vadivelan a/l Sandara Saigara [2009] 1 MLJ 238, the High Court held that in order to satisfy s 24 of the Act the accident must arise out of and in the course of his employment. The words ‘in the course of his employment’ must necessarily mean ‘in the course of his work’ which the workman is employed to do and includes some risks incidental to the duty of the service (see Mackinnon Ma...