Workmen Compensation

In the early 1990s, there was a great influx of foreign workers into Malaysia due to construction boom and industrialization. The growing presence of foreign workers in Malaysia can be explained by excess demand for labour combine with rapid economic growth. However, these huge influxes give a difficulty for employer to manage the compensation when many foreign workers employed frequently involved in the accident.

In order to cope with this problem, Ministry of Human Resources resurrected the Workmen’s Compensation Act, aimed to protect the interest and welfare of all foreign orkers in Malaysia. The Workmen’s Compensation Act was first enacted in 1952. It is a government scheme which was purposely designed to compensate an employee for incapacity flowing from an accidental personal injury sustained within the scope of his employment. Any compensation is valid to claim in two circumstances.

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First, when injuries, harm or death due to accident happens at the time the worker was working, or second, when injuries, harm or death due to accident happen outside working period, however there is causal relationship between the employment and the injury. This Act was dministered by Labour Department throughout Malaysia. Companies have to purchase insurance premiums to insure their workers in case workers meet an accident. Coverage Persons Covered under the Workmen’s Compensation Act, 1952 Initially, Workmen’s Compensation Act (1952) covers all Malaysian Employees.

However, in 1st July 1 992, all Malaysian workers have been exempted from provisions Of this Act as they will be covered under the Employees Social security Act 1969 (SOCSO). Starting from 1993, only foreign workers whose earnings are not more than RMSOO per month and who employed as manual workers, irrespective of heir wages, are protected under this Act. Previously, foreign workers were covered by the Employees’ Social Security Act (SOCSO).

This Act has been raised by Ministry of Human Resources due to high number of accidents occurring among foreign workers that were employed in high risk industries. Clause Act i) Duty of Employer under Workmen’s Compensation Act The Workmen’s Compensation Act 1952 was amended in August 1996. Under Section 26 (2) of the Amended Act, the employer is required to insure all foreign workers employed by them under the Foreign Workers Compensation Scheme (FWCS) through any insurance companies appointed by the Human Resources Minister.

Under the FWCS, employers of foreign workers are responsible to pay an insurance premium of RM86 per year per worker. They are not allowed to deduct the earnings of a worker for the payment of insurance premium. An employer found guilty of such action, shall be liable, on conviction to a fine of RM5, 000 or to imprisonment for a 1 year term or to both. Currently, there are 28 insurance companies being selected as insurer to issue insurance policy under the Foreign Worker’s Scheme, including:

Allianz General Insurance Malaysia Berhad AmG Insurance Berhad AXA Affin General Insurance Berhad Berjaya Sompo Insurance Berhad Chartis Malaysia Insurance Berhad Etiqa Insurance Berhad Etiqa Takaful Berhad Hong Leong MSIG Takaful Berhad ING Insurance Berhad Jerneh Insurance Berhad Kurnia Insurans (Malaysia) Berhad Lonpac Insurance Berhad MAA Takaful Berhad Malaysian Assurance Alliance Berhad MSIG Insurance (Malaysia) Berhad MUI Continental Insurance Berhad Multi-Purpose Insurance Berhad Oriental Capital Assurance Berhad Overseas Assurance Corporation (M) Berhad Progressive Insurance Berhad

Prudential Bsn Takaful Berhad QBE Insurance (M) Berhad RHB Insurance Berhad Syarikat Takaful Malaysia Berhad Takaful Ikhlas Sdn Bhd The Pacific Insurance Berhad Tokio Marine Insurans (M) Berhad Uni. Asia General Insurance Berhad Employers who fail to buy insurance protection for their workers or refuse to do so will liable to a fine not exceeding RM20, 000 or can be jailed not exceeding 2 years or both. Besides that, in the case of occupational accidents, the employer must provide a written notice to the nearest Labour Department within 10 days Of incident.

Failure to notify the Department of Labour in the event of an ccident is an offence and the employer shall be liable, on conviction to a fine of RM5, 000 for the first offence and RMI O, 000 for the second offence. ii) Notify and Claim Procedure Each worker involved in an accident must inform the employer within 7 days from the date of such accident except in the event of fatal accident. An employer must notify the nearest Department of Labour from the place of accident in writing. Such notice must be submitted within 1 0 days from the date of accident.

An employer then shall ensure that all information is with full details and upporting documents are enclosed such as medical certificate or death certificate. An employer must ensure that compensation settlement as determined by the Department of Labour is paid direct to the injured worker by depositing such payment to the Department of Labour as directed. However, compensation settlement cannot be paid direct to the wife, children or dependants, but to be deposited to the Department of Labour concerned.

If injured workman receiving a half-monthly payment intends to leave Malaysia in order to reside in another country, he shall give fourteen days revious notice of his Workmen’s Compensation to the Labour Department, otherwise he shall thereupon cease to be entitled to any benefits under this Act during his absence from Malaysia and he shall deemed to have received half-monthly payments under section 8 (e) during such absence. iii) Amount of Compensation The amount paid for death cases depending upon whether it was related with work or not.

Workers who died due to work-related accident or occupational disease inherited in occupations, he or she is entitled to maximum lump sum of RM25, 000 (RMI 8, 000 or equal to 60 months earning plus an additional RM7, 000). Payment will made by the insurance company to the employee’s dependants. Meanwhile the total amount of RM23, DOO will be paid to the employee’s dependants for death cases outside of working hours. If workmen has no dependants, insurance company must provide up to RMI, 000 or actual amount for funeral expenses.

In the case Of disablement, the amount paid also varies depends on the nature of disablement. Employees who suffer permanent total disablement results from the injury and incapable to perform any work permanently are entitled to RM23, 000 or 60 times monthly salary. Meanwhile, permanent partial disability means worker is not able to work in full capacity permanently due to the injuries he sustained from an accident. Such worker entitled to compensation which proportionate to the permanent loss of earning capacity caused by the injury. The maximum pay out for permanent partial disability cases is RM23, 000.

According to Section 8(e), temporary disablement worker which results from injury, whether partial or total are entitled to half-monthly payment of RM165 or amount equal to 1/3 of monthly salary during the disablement or during a period of five years. Any injury workers also entitle to maximum RM750 for hospitalization and medical expenses at approved hospitals. For occupational disease, no compensation shall be payable to a workman in respect of any disease unless the disease is directly attributable to a specific injury by accident arising out of and in the course of the relevant employment as stated in Second Schedule of the Act.

All claims for compensation are made via the Labour Department. Employees can make report to the Labour Department if there is disagreement with the amount to be paid and the case will be hearing from both side – employer and oreign worker before being decided by Labour Department. Conclusion Comments and Recommendations 1 . The Workmen Compensation Act (1952) is an old-age Act. The provision in this Act only been revised once in year 1982. Since the Act is outdated, it should be reviewed by the concerned party and modification or new provision should be made accordingly with current state. . Second, Workmen Compensation Act has been long enforced, yet many employers still not insure their foreign workers. Some Of employer might refuse to get insurance protection because it cost big amount of money for hem to insure each foreigner employed, and some of them wrongly deducted workers’ salary for Foreign Workers Compensation Scheme (FWCS) purpose. However, it is recommended for every employer to carry out worker compensation insurance for their foreign employees because it is employer duty to protect worker welfare regardless of their nationality status.

Besides, by abide this act, employer can avoid them from being prosecuted in court. Labor Department can also frequently monitor to ensure employer obligations toward this Act. 3. Third, many foreign workers in Malaysia did not know the existence of Workmen Compensation Act. It can be due to insufficient information or lack of workers understanding and awareness. Employers must educate and clearly expose their foreign employees with FWCS as they deserved to know what right they have when work in other country.

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Workmen Compensation. (2017, Jul 22). Retrieved from