When a State Government announces a cuti peristiwa or special public holiday through an official statement, news report or social-media post, employers often ask:

“Must private-sector businesses close and grant employees a paid holiday?”

The answer is: not necessarily.

The legal position depends on the provision under which the holiday is declared, the employer’s annual public-holiday arrangements, and the terms of employment applicable to the employees.

Section 8 and Section 9 Holidays Are Different

Under the Holidays Act 1951, special or additional public holidays may be declared through different statutory mechanisms.

Holidays declared under Section 8

Section 60D(1)(b) of the Employment Act 1955 provides that a public holiday appointed under Section 8 of the Holidays Act 1951 must be observed as a paid public holiday.

Such a holiday is generally additional to the 11 paid public holidays employees are ordinarily entitled to receive each calendar year.

Where a holiday is declared under Section 8, a private-sector employer must generally do one of the following:

• grant employees the paid public holiday;
• require eligible employees to work and pay the applicable public-holiday rate; or
• grant another paid day in substitution.

Under Section 60D(1A) of the Employment Act, the employer may grant another day as a paid public holiday in substitution for a Section 8 holiday.

Holidays declared by a State Authority under Section 9

Section 9 of the Holidays Act 1951 allows a State Authority to appoint a day as a public holiday within that State.

A State announcement may be made through a Gazette notification, official statement, media announcement or another method considered appropriate by the State Authority.

However, Section 60D(1)(b) of the Employment Act specifically refers to holidays appointed under Section 8. It does not state that every State holiday declared under Section 9 automatically becomes an additional compulsory paid holiday for private-sector employees.

Accordingly, the fact that a State Government has announced a special holiday does not, by itself, mean that every private-sector business must close.

When a State Special Holiday May Still Be Binding

Although a Section 9 holiday may not automatically become an additional compulsory holiday under Section 60D(1)(b), an employer may still be required to observe it where:

• the holiday has been selected as one of the employer’s six chosen public holidays;
• the employment contract provides that employees are entitled to all State public holidays;
• the employee handbook or collective agreement provides for all gazetted State holidays;
• the employer has already announced that the company will observe the holiday;
• the employer has consistently observed similar holidays as part of an established employment practice; or
• a specific law, licence condition or official directive applies to the particular industry or business.

Employers should therefore review their annual public-holiday notice, employment contracts, employee handbook, collective agreements and previous staff announcements before deciding whether to operate as usual.

Substitution of a Public Holiday

The substitution rules depend on the type of holiday involved.

For a holiday declared under Section 8, Section 60D(1A) allows the employer to provide another paid day in substitution.

Where a State holiday has been selected as one of the employer’s six chosen public holidays, any substitution should be managed in accordance with Section 60D, the employer’s policies and the applicable employment terms.

As a matter of good practice, any replacement holiday should be communicated clearly to employees in writing.

Payment Where Employees Work on a Paid Public Holiday

Where an employee is entitled to statutory public-holiday premium pay and is required to work during normal working hours on a paid public holiday, the employee is generally entitled to:

Holiday pay plus an additional two days’ wages at the ordinary rate of pay.

Where the employee works beyond normal working hours, the excess hours must generally be paid at not less than three times the hourly rate of pay.

For monthly-paid employees, normal holiday pay is usually already included in the monthly salary. The practical additional payment for working normal hours on the public holiday is therefore generally two days’ wages at the ordinary rate of pay.

Employees Earning More Than RM4,000 Per Month

Employees earning more than RM4,000 per month are generally excluded from certain statutory premium-payment provisions under the Employment Act.

However, certain categories of employees may remain protected regardless of salary, including:

• manual workers;
• commercial vehicle operators; and
• employees who supervise manual workers.

For other employees earning more than RM4,000 per month, additional payment for working on a public holiday will usually depend on the employment contract, collective agreement, employee handbook or company policy.

What Should Employers Do?

Whenever a special holiday is announced, employers should not rely solely on the headline or social-media post.

They should first confirm:

1. whether the holiday was declared under Section 8 or Section 9 of the Holidays Act 1951;
2. whether the Ministry of Human Resources or the Labour Department has issued any clarification;
3. whether the holiday is already included in the company’s annual public-holiday list;
4. whether the employment contracts or company policies require the holiday to be observed; and
5. whether any industry-specific requirement applies.

Conclusion

A special-holiday announcement by a State Government does not automatically mean that all private-sector employers must close or grant employees an additional paid holiday.

The legal obligation depends on the statutory basis of the declaration and the employer’s existing contractual, policy and public-holiday arrangements.

Employers should verify the legal basis of the holiday and review their employment documents before issuing any announcement to employees.

Disclaimer: This article is for general information purposes only and does not constitute legal advice. Specific advice should be sought based on the facts and structure of each transaction.