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26/09/2007 12:19:52
Re: Payment of Salary Through Bank

I wish to enquire whether it is compulsory or good practice to procure employees' consent in order to pay them salary through bank (i.e. direct credit)?

Section 25 of the Employment Act 1955 says that it is required to do so if it is relating to "truck system". By the way, what is truck system?

Your advice is highly appreciated.

Many thanks
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KL Siew
26/09/2007 12:53:51
For payment of wages through bank, Section 25A of the Employment Act has all the info you need.

Actually Section 25 stipulates that all wages must be paid in legal tender, that is to say in money and not in the form of goods, foodstaff, coupons and so on. "Truck system" is a term that refers to payment of wages in kind or goods. In the olden days, labourers especially the Indian labourers who were brought into the country as "indentured labour" to work on rubber plantations, were not paid wages in money but in goods like foodstaff etc. Section 25 does not allow such practice anymore.
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