Sarawak Labour Ordinance Reforms: What Employers and Employees Need to Know
The Sarawak Labour Ordinance reforms mark one of the most significant employment law updates for Sarawak in recent years. For a long time, employment law in Sarawak operated under its own framework, separate from the Employment Act 1955 applicable in Peninsular Malaysia. With the Labour Ordinance of Sarawak (Amendment) Act 2025, the law has now moved closer towards standardising key employment rights across Malaysia.
The reforms are important not only for lawyers and HR practitioners, but also for employers, employees, business owners and payroll personnel. Below is a practical Q&A guide on what the SLO reforms mean in everyday employment practice.
Q1: What are the Sarawak Labour Ordinance reforms?
The Sarawak Labour Ordinance reforms refer to amendments made to the Labour Ordinance of Sarawak, also known as Sarawak Cap. 76. The amendments update various parts of the Ordinance, including employee coverage, working hours, leave entitlements, sexual harassment, discrimination, flexible working arrangements, forced labour, public holidays, employment of children and young persons, and workers’ housing and accommodation.
In simple terms, the reforms modernise Sarawak’s employment law and bring it closer to the labour standards applicable in Peninsular Malaysia.
Q2: Why were the reforms introduced?
The reforms were introduced to strengthen employee protection and to harmonise labour standards across Malaysia. Before the amendments, some employees in Sarawak may not have enjoyed the same statutory protections as employees in Peninsular Malaysia. The amendments attempt to close that gap.
They also reflect Malaysia’s broader commitment to international labour standards, including protection against forced labour, workplace discrimination, and sexual harassment.
Q3: When did the amendments come into force?
The main amendments came into force on 1 May 2025. However, provisions relating to minimum standards of workers’ housing, accommodation and amenities should be separately checked against the relevant commencement notification, as different provisions may come into force on different dates.
Employers should therefore avoid relying only on general summaries and should verify whether a specific provision has already commenced before advising on compliance.
Q4: Who is protected under the amended Sarawak Labour Ordinance?
One of the biggest changes is the expansion of coverage. The amended Ordinance now generally extends protection to all private sector employees, regardless of wage level.
This is a major shift because the earlier position was more limited and often depended on wage thresholds or the type of work performed. Employers should not assume that an employee is excluded from statutory protection merely because the employee earns above a certain salary.
That said, certain specific monetary entitlements, such as overtime-related payments, rest day pay, public holiday pay and termination benefits, may still be subject to the limits and exclusions under the First Schedule. Therefore, employee coverage and employee entitlement must be considered separately.
Q5: What is the new weekly working hours limit?
The weekly working hours limit has been reduced from 48 hours to 45 hours.
This means employers must review their work schedules, shift systems, employment contracts, employee handbooks and payroll calculations. Employers should not reduce an employee’s salary merely because the law now limits normal weekly working hours to 45 hours. Any change to working arrangements should be handled carefully and documented properly.
For businesses operating on shift work, retail hours, manufacturing lines, logistics, plantations, construction or hospitality operations, this reform may require practical restructuring of manpower planning.
Q6: What has changed for maternity leave?
Female employees are now entitled to 98 consecutive days of maternity leave for each confinement, subject to the requirements under the Ordinance.
The reforms also strengthen protection for pregnant employees. Employers should be careful when dealing with termination, non-renewal, demotion or disciplinary action involving a pregnant employee or an employee suffering from illness arising out of pregnancy. Any employment decision in such circumstances must be properly justified and documented.
From a compliance perspective, employers should update maternity leave policies, payroll settings and HR templates to reflect the 98-day entitlement.
Q7: Is paternity leave now recognised in Sarawak?
Yes. The amended Ordinance introduces paid paternity leave.
A married male employee is entitled to 7 consecutive days of paid paternity leave for each confinement, subject to the statutory requirements. Generally, the employee must have been employed by the same employer for at least 12 months immediately before the commencement of the paternity leave and must notify the employer of the pregnancy within the required timeline or as early as possible after the birth.
The entitlement is limited to five confinements, regardless of the number of spouses.
Q8: What are the new sexual harassment obligations?
The reforms introduce specific provisions dealing with sexual harassment complaints in the workplace.
Employers are required to take complaints seriously, conduct inquiries where required, and display a notice at the workplace to raise awareness of sexual harassment. This means it is no longer sufficient for an employer to say that sexual harassment is only an internal disciplinary matter. There are now statutory procedures and obligations that must be observed.
Employers should have a proper anti-sexual harassment policy, complaint channel, investigation procedure and disciplinary framework. Managers and supervisors should also be trained on how to handle complaints fairly and confidentially.
Q9: What about discrimination in employment?
The amended Ordinance introduces provisions allowing complaints relating to discrimination in employment to be inquired into and decided by the Director of Labour.
This is important because discrimination may arise not only in salary matters, but also in work allocation, promotion, transfer, working hours, leave, rest days, accommodation, benefits and other terms and conditions of employment.
Employers should ensure that employment decisions are based on objective and documented reasons, such as performance, qualifications, business needs, misconduct or redundancy requirements.
Q10: How does the Ordinance deal with forced labour?
The reforms expressly prohibit forced labour. An employer must not threaten, deceive or force an employee to perform work while preventing the employee from leaving the place or area where the work is done.
This is especially relevant for industries involving foreign workers, on-site accommodation, labour contractors, remote work sites, plantations, construction sites and manufacturing facilities.
Employers should audit their recruitment practices, worker accommodation practices, passport-handling practices, wage payment systems and movement restrictions to ensure they do not create forced labour risks.
Q11: What are flexible working arrangements under the amended Ordinance?
Employees may apply for flexible working arrangements involving changes to working hours, working days or place of work.
The application must be made in writing and in the form or manner determined by the Director. Once an application is received, the employer must approve or refuse the application within 60 days. If the application is refused, the employer must give the reason for refusal in writing.
This does not mean every flexible working request must automatically be approved. However, employers should consider requests properly and respond within the statutory timeline.
Q12: What has changed for public holidays?
The reforms also clarify public holiday entitlements. Employers should review their public holiday policies and ensure that employees receive the minimum public holiday entitlement required under the amended Ordinance.
This is particularly important for businesses operating on public holidays, such as retail, restaurants, hotels, security services, logistics and healthcare-related services. Payroll teams must ensure that public holiday work is calculated correctly.
Q13: Are domestic employees affected?
Yes, domestic employees are now expressly recognised under the updated terminology. Certain exclusions may still apply under the First Schedule, especially in relation to termination benefits or wages in lieu of notice. However, domestic employees are now entitled to a weekly rest day.
Employers of domestic employees should ensure that employment terms are clearly documented and that rest day arrangements are properly respected.
Q14: What should employers do now?
Employers in Sarawak should take the reforms seriously and conduct an immediate compliance review. Key action items include:
- Update employment contracts and employee handbooks;
- Review working hours and shift arrangements to comply with the 45-hour limit;
- Update maternity and paternity leave policies;
- Display sexual harassment awareness notices at the workplace;
- Prepare a sexual harassment complaint and investigation procedure;
- Review discrimination, disciplinary and grievance policies;
- Prepare a flexible working arrangement application process;
- Review foreign worker and contractor-for-labour arrangements;
- Check payroll treatment for overtime, rest days and public holidays;
- Train HR personnel, managers and supervisors on the new requirements.
Employers should not treat the reforms as a mere HR formality. Non-compliance may expose the company to complaints, penalties, labour disputes and reputational risk.
Q15: What should employees know?
Employees should know that the reforms strengthen their statutory rights. Employees in Sarawak now enjoy broader protection under the Ordinance, including clearer rights relating to working hours, family-related leave, discrimination, sexual harassment, forced labour and flexible working arrangements.
However, employees should also understand that not every workplace disagreement is automatically unlawful. Claims should be supported by documents, employment contracts, payslips, messages, attendance records, medical certificates or other relevant evidence.
Conclusion
The Sarawak Labour Ordinance reforms represent a major step towards modernising employment law in Sarawak. The amendments bring wider protection to employees while imposing clearer compliance obligations on employers.
For employers, the key message is simple: update your documents, train your people and review your payroll and HR practices. For employees, the reforms provide stronger protection and clearer avenues to raise legitimate workplace concerns.
As employment disputes often depend on the facts, parties should seek proper legal advice where there is uncertainty, especially in cases involving termination, pregnancy, overtime, discrimination, sexual harassment, foreign workers or worker accommodation.