The Employment Act 1955 has been amended to make more employees eligible for overtime payments if they work beyond their contractual working hours. These changes are due to come into effect on 1 January 2023, and has resulted in much discourse as to how the overtime regime will work in practice. For example, can an employer “force” an employee to work overtime so long as overtime payments are made? Can an employee insist on going home at their contracted hours?

In determining whether it is justifiable for an employee to refuse conducting overtime work, the Industrial Court will generally take into account of factors such as the customary practice in the relevant industry (ie: whether overtime work is common in that industry) and whether the employer’s request for overtime work is reasonable. 

In Cathay Organisation (M) Sdn Bhd v D National Union of Cinema & Amusement Workers [1985] 1 ILR 721, the Company reduced the number of on-duty cinema operators for each shift and issued a new work timetable, which required the claimant to work half an hour of overtime once a week. The claimant refused to carry out such overtime work and was dismissed by the company.

In upholding the dismissal of the claimant, the Industrial Court had observed that the performance of overtime work for midnight shows and extra shows was customary practice in the cinema industry. Prior to the introduction of the new work timetable, the claimant had carried out overtime work without any objections. Given that the company’s request was reasonable and that the claimant’s plan was to “force the company to bow down to his wishes”, the claimant was found to have committed insubordination and his dismissal was justified. 

Despite the above, employers should still consider any reasons given by employees for their refusal to conduct overtime work on a case-by-case basis. 

In Syarikat Perniagaan Ocean (M) Sdn Bhd v Kesatuan Pekerja-pekerja Pembekal-pembekal Perkhidmatan Sampingan Pelabuhan [1988] 2 ILR 88, the four claimants did not carry out overtime work for various reasons (ie: family commitments, attending prayer day for late father, family visit from out-of-town and father was very ill). 

In holding that the claimants’ dismissals were unfair, the Industrial Court observed that employees are entitled to refuse to conduct overtime work if a reasonable excuse can be found. Even if the said employees’ excuses were not acceptable or reasonable, the punishment of dismissal should not be imposed for isolated incidents.  

In Subramaniam Mookayah v Nestle Products Sdn Bhd [2008] 2 ILR 223, the claimant was instructed to conduct overtime work. However, the claimant informed the company that he could not confirm his availability immediately, as he needed to consult his ill wife beforehand. This resulted in the claimant being dismissed for his refusal to do overtime. 

In holding that the claimant was unfairly dismissed, the Industrial Court noted that the claimant had merely requested for more time to confirm his availability and did not actually refuse to conduct such overtime work. Not only that, the claimant was generally willing to conduct overtime when called by the company to do so in his past 17 years of service. The present alleged misconduct was the only instance where his superiors had lodged a complaint against him for refusing to do overtime.  Therefore, the claimant had not acted unreasonably in requesting time to confirm his availability for overtime work, due to his need to attend to family matters (ie: wife who is sick in hospital). 

Key Takeaways

A business has the prerogative to require its employees to work additional hours to meet commercial needs, provided that it complies with the law in doing so. An employee who unreasonably refuses a lawful instruction to perform overtime work may be dismissed for insubordination. That being said, employers should not use their prerogative arbitrarily, and should consider these approaches:

  • Adopt a flexible approach in assessing the reasons offered by an employee for refusing to work overtime. If the reason is temporary in nature or due to genuine emergencies, it may be acceptable for an employee to refuse overtime work. 
  • The amount of overtime work should not exceed the limits prescribed by the Employment Act 1955 and/or the terms of the employment contract. 
  • An employee who is statutorily eligible to overtime pay, should be paid overtime pay no less than what is prescribed in the Employment Act 1955. 
  • If an employee repeatedly refuses to work overtime without legitimate reason, or is otherwise disruptive to the operational needs of the business, an employer can consider disciplinary action that is proportionate to the circumstances.

In essence, an employer’s right to direct employees to conduct any overtime work must be balanced against employees’ right to refuse such overtime work in reasonable circumstances.

***

This article was written by Leow Ho Eng (Associate) from Donovan & Ho’s employment law practice. 

Donovan & Ho is a law firm in Malaysia, and our employment practice group has built a reputation for providing strategic employment advice to local and global organisations.  Our team of employment lawyers provide advice on employment law and industrial relations including review of employment contracts, policies and handbooks, advising on workforce reductions, and managing dismissals of employees for poor performance or misconduct. We also represent clients in unfair dismissal claims and employment-related litigation. Have a question? Please contact us.

 

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