Special Public Holidays in Malaysia: Does the Private Sector Have to Follow?

Special Public Holidays in Malaysia                                Does the Private Sector Have to Follow?

Special public holisdays are usually announced at short notice — a royal event, a polling day, a national sporting victory — leaving a company a few days, sometimes a few hours, to decide what to do.

The questions are always the same. Do we have to close? If we close, is it paid? If we open, what do we pay the staff who come in?

The Short Answer

The short answer is that it depends on which section of the law the holiday was declared under.

There are two possibilities:

• Declared under section 8 of the Holidays Act 1951 — the private sector must It is an extra paid holiday, on top of the eleven public holidays your employees already get. But you are allowed to give a replacement day instead.
• Declared under section 9 — as a general position, the private sector in Peninsular Malaysia is not legally required to follow it. The Government encourages employers to observe it, but it is not compulsory.

That is the general rule. In practice, though, there are several situations where an employer ends up being bound anyway. Those are set out under Important Things to Note below.

What Does the Law Say?

The Holidays Act 1951 is the law that creates public holidays. It says who can declare a holiday and for which part of the country.

The Employment Act 1955 is the law that decides which of those holidays your employees are actually entitled to be paid for.

The Eleven Paid Public Holidays

Under section 60D(1) of the Employment Act 1955, every employee is entitled to eleven paid public holidays a year. These come from the official list published in the Gazette — commonly called gazetted public holidays.

Five of the eleven are fixed by law: National Day, the Yang di-Pertuan Agong’s birthday, the birthday of the Ruler or Yang di-Pertua Negeri of the State where the employee mainly works (or Federal Territory Day), Workers’ Day and Malaysia Day. The employer chooses the remaining six from the gazetted list, and must put up a notice at the workplace before the start of each year stating which six it has chosen.

The Extra Holidays

Section 60D(1) then adds one more entitlement: any day appointed as a public holiday for that year under section 8 of the Holidays Act 1951.

The Employment Act mentions section 8. It does not mention section 9. That single omission is the whole reason the two are treated differently.

What Does This Mean in Practice?

The law: Employees are entitled to a paid holiday on any day declared under section 8.

What this means: It is an additional day. You cannot treat it as one of the eleven your employees are already entitled to, and you cannot ask them to take annual leave for it.

The law: The employer may grant any other day as a paid holiday in substitution for a section 8 holiday — section 60D(1A).

What this means: You do not have to shut down on the day itself. A factory, a clinic, a restaurant or a logistics operation can keep running and give the day back later. For a section 8 holiday the employer may substitute on its own; changing one of the six chosen holidays needs the employee’s agreement. The Act does not prescribe when or how the replacement must be notified — but tell your staff before the day and put it in writing, because a replacement announced after the event is far harder to defend.

The law: Section 9 is not mentioned in the Employment Act.

What this means: If a State Government declares a holiday for its own State, employers in Peninsular Malaysia are not legally obliged to close, and the Ministry of Human Resources has consistently said so. Many employers still observe it, which is a business decision rather than a legal one. Some commentators argue that section 9 holidays bind employers too; the better view follows the wording of the Employment Act, which names only section 8 — but an employer relying on that should be able to show it has taken the same approach consistently and gave clear advance notice.

The law: If an employee works on a paid public holiday, he is entitled to extra pay.

What this means: In addition to his normal holiday pay for that day, he is entitled to two days’ wages at his ordinary rate of pay. If he works beyond his normal hours that day, those extra hours are paid at three times his hourly rate.

Three Short Examples

Example 1 — A section 8 holiday, and the business cannot close

On 20 August the Prime Minister announces an extra public holiday on 28 August, later gazetted under section 8. A logistics company in Pasir Gudang cannot stop work that day. On 21 August it notifies staff in writing: the yard works as usual on 28 August, and 5 September is granted as a replacement paid holiday. That is a valid substitution under section 60D(1A), and giving clear written notice in advance helps minimise uncertainty and potential disputes.

Example 2 — A section 9 holiday the employer has already promised

A State Government declares a holiday for Johor under section 9, so there is no statutory obligation to observe it. But this employer’s handbook promises “all gazetted public holidays declared by the Federal or State Government”, and the company has closed for every such declaration for eight years. The handbook wording is a contractual entitlement in its own right, and the practice reinforces it. This company should observe the day, or renegotiate the term properly — not simply stop.

Example 3 — One company, two answers

The same company has a branch in Kuching. When Sarawak declares an additional State holiday, the Kuching staff are entitled to it — the Sarawak Labour Ordinance extends the entitlement to holidays declared by the State Government. On the same facts the Johor office would not be. One company, two payrolls, two answers.

What to Do When a Special Holiday Is Announced

Step 1 —  Find out which section it was declared under. Look at the Gazette notification or the Ministry of Human Resources statement. A news headline saying “public holiday declared” does not tell you whether it is section 8 or section 9. Section 8 allows a declaration to be made in the Gazette or in such other manner as the Minister thinks fit, so a press announcement can already be effective; plan on it, and confirm against the Gazette afterwards.

Step 2 —  Check your own annual notice. If the day is one of the six you already chose for the year, you are bound by your own choice, whichever section it falls under.

Step 3 —  Check the contract and handbook. What you have promised in writing may be more generous than the law requires.

Step 4 —  Check where your employees work. Peninsular Malaysia, Sabah and Sarawak are governed by different legislation, and branches in different States can get different answers.

Step 5 —  Decide, then tell your staff in writing before the day — whether you are closing, giving a replacement day, or working as usual, and how those who work will be paid.

Important Things to Note

1. You may already have committed yourself

Many days declared under section 9 come from the same gazetted list as the six holidays you choose for yourself. If you have selected such a day in your annual notice, you are bound by your own selection — the obligation comes from the notice you put up, not from the declaration, and the fact that the day was declared under section 9 does not release you from it.

The position is similar, though less clear-cut, where your practice has been to observe every gazetted public holiday. A benefit given openly and consistently over a long period may be treated as an implied term of the contract; whether it is depends on how consistent the practice has been and how both sides have understood it.

2.Your contract may say more than the law

Wording such as “all gazetted public holidays” or “all public holidays declared by the Federal or State Government” in an employment contract, handbook or collective agreement creates a separate contractual entitlement. The Employment Act sets a minimum, not a maximum, and a more generous contract term will prevail.

Withdrawing a benefit that has been given consistently for years is not simply a management decision. Doing it unilaterally may amount to a fundamental breach of contract, which the employee can treat as a constructive dismissal and take to the Industrial Court under section 20 of the Industrial Relations Act 1967. Change it by agreement, or with proper notice and a clear reason.

3.Sabah and Sarawak are different

The Employment Act 1955 and the Holidays Act 1951 apply to Peninsular Malaysia and the Federal Territory of Labuan. Sabah has its own Holidays Ordinance (Cap. 56) and Labour Ordinance (Cap. 67); Sarawak has its Public Holidays Ordinance (Cap. 8) and Labour Ordinance (Cap. 76).

In Sarawak, section 104 of the Labour Ordinance entitles employees to the gazetted public holidays and to any additional holidays declared by the State Government, so a State declaration does bind the private sector there. Sabah has its own scheme under the Labour Ordinance read with the Holidays Ordinance, and the number of days actually payable has been publicly debated. The section 8 and section 9 distinction in this article should not be applied to a Sabah or Sarawak payroll — take the position separately for each.

What Should You Do?

If you are an employer:

• Put up the annual notice of your six chosen public holidays before the start of each year — this is a statutory requirement and it decides many of these questions in advance.
• Include a clause in your employment contract or handbook reserving the right to give a replacement day for any special holiday declared during the year.
• Review your position separately for any Sabah or Sarawak operations.

If you are an employee:

• Check the annual notice at your workplace to see which six public holidays your employer has chosen.
• If you are asked to work on a public holiday, check that your payslip reflects the correct additional pay.

Conclusion

A special public holiday is not automatically a day off for everyone. Declared under section 8, the private sector must observe it, although a replacement day may be given. Declared under section 9, there is generally no legal obligation to follow it in Peninsular Malaysia — but check your annual notice, your contracts and where your staff work before assuming that.