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26/06/2009 01:45:12
Re: deduction of salary

hi there,

i'm a law student from one of the local universities in KL
currently im taking industrial relations as part of my elective course
i have a question with regard to one of my case studies and need some clarification regarding a rare matter which may not be covered by the employe ment act (Act 265)

my question is based on a case study.

the case is quite straightforward in its facts
- the employer entered into an agreement with an employee to sponsor the latter for his postgrad studies
- the agreement stated certain conditions of breach of contract
- the employee met some of the conditions and now are required by the employer to settle the full sum of the sponsorship (as agreed in the agreement)
- the employee refused but the employer decided that instead of terminating the former, the latter intended to deduct the monthly salary under a 10 year settlement period to set off the default

some notable facts include:
a) the basic wage for the employee is around RM 6200 per month
b) he takes home about rm2200 per month after deduction from certain expenses including
i) housing loan the employer provides
ii) a loan from one of the employer's Koperasi pekerja
iii) rent etc.

the question is:
can the company deduct the salary to set off the education sponsorship breach of contract?

i understood that under s24 of the employment act disallows the company from making deductions without the consent of the employee and/or othewise allowed by law and i believe that education sponsorship programme may not be covered by the Act. i might also need some explanation on whether the RM6000 salary band is covered by the employment act.

thank you.
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KL Siew
26/06/2009 09:14:19
To show that you know something about the Employment Act, you may look at it at two situations:

Situation #1. The employee is not covered by the Employment Act because he is a non manual employee with salary more than RM1500. In such a situation, Section 24 does not apply and the employer can make the deductions according to what were stated in the contract. Disputes may be dealt with in the civil courts.

Situation #2. Lets take the employee as a manual worker say a bulldozer driver earning RM6200 per month so that he is covered by the EA. So, in this case, Section 24 about salary deductions is clear and you can examine the clauses one by one whether the deductions were done accordingly. Should there be disputes, the employee concerned can seek redress at the Labour Department.

I can't comment on the agreement on the eduction programme sponsorship for post graduate studies. Consult a lawyer friend of yours.
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17/07/2009 14:31:08
hi there,
May i know did employer can reduce the employee salary by reason that employee not doing well or perform well in his job. the employee have appointment and confirmation letter as RM3,000.00, want to reduce to RM2,400.00. Employer by asking and wanted employee to agree or negotiable.??
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