Arbitrary salary deductions are illegal, says IR officer

An industrial relations officer says arbitrary salary deductions by employers are illegal, pointing out any such deduction must be authorised by the Ministry of Human Resources, and most times will require the employee's consent.

The officer, Peter Kandiah, was commenting on a joint report by Malaysiakini and Tempo yesterday about Maxim Birdnest (M) Sdn Bhd, a bird’s nest factory in Klang, that had been arbitrarily deducting the salaries of its Indonesian staff.

The company has denied employees overtime pay and deducted money from their monthly wages for meals, tax and when they applied for sick leave.

"Employers cannot arbitrarily deduct employees' salaries, unless they get written permission from the director-general of Human Resources," Kandiah, who is with the Malaysian Trades Union Congress (MTUC), said.

Indeed, even then, such permissions are rarely issued, he added pointing to provisions in the Malaysian Employment Act.

Kandiah encouraged victims to report cases of arbitrary salary deductions to the Labour Court or the MTUC.

“MTUC has received many cases of migrant workers who are victims of arbitrary salary deductions. We have taken cases up to the Labour Court and won compensation,” Kandiah added.

What does the law say about salary deductions?

Salary deductions are allowed under Section 4 (24) (2) of the Malaysian Employment Act 1955, which lists specific situations, but under strict conditions.

Referring to the Act, Malaysiakini has listed the reported salary deductions by Maxim Birdnest (M) Sdn Bhd that go against the relevant provisions in the Act.

-Mkini