New Employment Act amendments may mean law pupils are entitled to minimum wage

A much-discussed issue in Malaysian legal circles for some time now has been the remuneration of pupils in the legal industry.

Many law graduates are grossly underpaid during their compulsory 9-month pupillage period, with reports of monthly pay as low as RM500. This is well below the current monthly minimum wage in Malaysia, which is RM1,100/1,200. However, pupils fall outside the scope of the Minimum Wages Order, as they are not “employees” under the existing Employment Act (EA).

Proposed amendments to the EA may change this position, and mean that pupils will be entitled to the national minimum wage.

The Employment (Amendment) Bill 2021, which contains significant amendments to the EA, was tabled for its first reading in Parliament on 25 October 2021.

The relevant amendment here is that the definition of “apprenticeship contract” will be changed. Currently, to qualify as an “apprenticeship contract”, the contract must be for a period of two or more years.

In my view, a pupillage is quite clearly an apprenticeship — it is a compulsory 9-month period in which law graduates are expected to be trained by pupil-masters (lawyers with at least 7 years experience) before being called to the Bar. However, the fact that pupillage contracts are for less than two years means that this relationship does not fall within the scope of the existing EA.

If the Bill is passed, the time period in the definition of “apprenticeship contract” will be changed to 6-24 months. The full revised definition would read: “apprenticeship contract” means a written contract entered into by a person with an employer who undertakes to employ the person and train or have him trained systematically for a trade for a specified period which shall be for a minimum period of six months and a maximum period of twenty four months in the course of which the apprentice is bound to work in the employer’s service.

This mean that pupils will fall within the scope of the EA (they would be “employees” for the purpose of the EA provided that they are paid RM2,000/month or below), and will be entitled to the minimum wage.

One potential sticking point is an argument that the meaning of “apprentice” and “apprenticeships” are traditionally intended to refer to craft, labour, or trade apprenticeships (such as woodworking). Can a pupillage relationship — training to be a lawyer — be said to be training “systematically for a trade”? In my view, there is a good case to say so.

Another interesting issue would be whether this then means that pupils who are paid RM2,000/month or below will be entitled to overtime compensation, and be subject to the working hour limits under the EA. This may then mean that law firms would have to pay pupils more than RM2,000/month to bring them outside of the scope of the EA.

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