On October 14, 2024, the Malaysian Dewan Rakyat passed amendments to the Sabah Labour Ordinance,

which were subsequently approved by Dewan Negara on December 2, 2024. The amendments, which were last

amended in 2005, include significant changes such as lowering weekly working hours to 45, increasing

the needs of the modern workplace. The amendment demonstrates a dedication to creating a just and equitable

workplace by tackling important issues like gender equality and work-life balance.

Behaviour.

Labour law, also known as employment law, is a set of rules that govern the relationship between the employer

and employees (Krishnan et al., 2022). In Malaysia, the Employment Act 1995 applies to Peninsular Malaysia

and the Federal Territories, whereas the Labour Ordinance of Sabah (Cap 67) governs employment matters in

Sabah, and the Labour Ordinance of Sarawak (Cap 76) is enforced in Sarawak (Che Shaari, 2020). The

primary purpose of these labour laws is to safeguard the rights and interests of the employees and employers

to legislate on issues typically falling under state jurisdiction, particularly in cases where uniformity of the law

is deemed necessary (Jayakumar, 1967). The stipulation that such laws must first be enacted by the State

Legislature before they can be enforced ensures the preservation of the distinction between Federal and State

powers (Lee, 1976). Article 76 reflects the principle of cooperative federalism, acknowledging that in certain

circumstances, the overlapping jurisdictions of Federal and State governments are an unavoidable reality

(Khalid & Jalil, 2018). With regard to labour law, Malaysia's approach strongly favours uniformity, a legacy of

the British colonial period, which placed a focus on centralising authority in the Federal government (Harahap

et al., 2024).

The SLO’s amendment in 2024 was finally materialised after 14 engagement sessions involving the Ministry

employee motivation, job satisfaction, productivity, and team dynamics. This study also examines the

importance of legal compliance in the context of labour laws to ensure organisational justice in the workplace.

Much of the literature on Malaysian labour law focuses on the Employment Act 1955, which applies only in

Peninsular Malaysia. For example, Ponniah (1988) traces back the history of labour laws in Malaysia during

colonial period and post-independence era, including the introduction of the Employment Act 1955 and the

Industrial Act 1967 to protect workers’ rights even in the wake of emergency. Mohd Nadzri (2012) outlines

key changes introduced by the Employment (Amendment) Act 2012, such as expanding the coverage of the

Act, introducing sexual harassment offences, defining the contractor for labour's role, extending employer

liability to company officers, recognising Malaysia Day as a compulsory holiday, and requiring reports to the

specific employment statutes apply respectively. More recently, Hassan et al. (2023) analyse the recent 2022

amendments to the Employment Act 1955, by benchmarking the statute with the international labour

standards. While the paper does not discuss the employment law in Sabah, in the concluding remark, the

authors suggest that the lawmakers must ensure that the same amendments be implemented in Sabah and

Sarawak to ensure equal protection towards employees throughout the Federation. With the lack of literature

written on labour laws in Sabah, particularly the SLO, it is the aim of this study to explore the recent changes

to the law in 2024 in alleviating the dignity and rights of the workers in Sabah private sector.

As regards the relationship between employment law and organisational behaviour, literature found is mostly

from other jurisdictions. For instance, Red and Teng-Calleja (2021) examine how legal compliance with

labour laws affects organisational justice and outcomes such as organisational citizenship behaviour,

towards organisational and individual needs. The study emphasises that labour law is essential for employees

in helping them to meet their basic needs, ensures decent working conditions, and provides social security

through various types of insurance. For employers, labour law allows employers to manage the labour process

effectively, ensuring the appropriate use of labour in line with enterprise objectives. Besides, for society,

labour law contributes to social peace by balancing the needs of employees and employers and supporting

economic development.

Storm (2007) discusses two conflicting views on labour laws and organisational growth. On the one hand, they

are seen as rigid and believed to hinder productivity growth by increasing adjustment costs and reducing

incentives for innovation. On the other hand, labour regulations can enhance productivity by improving worker

motivation and fostering a cooperative industrial relations system. The study concludes that labour market

regulation can positively impact productivity growth by fostering a cooperative industrial relations system and

careful review of scholarly articles on the topic. In addition to the doctrinal analysis, the research also takes a

comparative benchmarking approach. This entails a detailed comparison of labour laws in other regions that

share similarities with the provisions of the Sabah Labour Ordinance. The goal is to identify the benefits and

challenges of labour regulations in these areas. This comparative perspective not only enriches the

understanding of the Sabah Labour Ordinance but also provides useful insights into best practices and possible

issues in labour law enforcement. By employing this dual approach, the study aims to add to the academic

discussion on labour law and its practical impact on workers in Sabah.

The amendment to the Sabah Labour Ordinance (SLO) in October 2024 has been hailed as a transformative

step in aligning Sabah's labour laws with the Employment Act 1955, which governs Peninsular Malaysia. This

Bill, which passed in Parliament with unanimous support, marks a historic moment as it seeks to enhance the

protection of over two million private-sector workers in Sabah (Sokial, 2024).

This section explores the major changes introduced by the 2024 amendments to the SLO and examines their

potential implications for organisational behaviour. The analysis begins by outlining the original provisions of

the SLO prior to the 2024 changes, highlighting the rights and responsibilities of both employers and

employees under the previous legal framework. It then goes on to detail the specific amendments, explaining

the reasoning behind each change and the areas of labour law they address. Key areas such as employment

The 2024 SLO Amendment Bill contains an explanatory statement at the end of the Bill which underscores the

purpose of the amendment to bring SLO in line with the international standards and practices as required by

the Trans-Pacific Partnership Agreement, the Malaysia-United States Labour Consistency Plan and the

International Labour Organisation (ILO). To date, Malaysia has ratified 19 ILO conventions and one protocol,

including the Forced Labour Convention, 1930 (No. 29), the Equal Remuneration Convention, 1951 (No. 100),

the Minimum Age Convention, 1973 (No. 138), the Promotional Framework for Occupational Safety and

Health Convention, 2006 (No. 187), the Tripartite Consultation (International Labour Standards) Convention,

1976 (No. 144), the Employment Service Convention, 1948 (No. 88), and the Protection of Wages

Convention, 1949 (No. 95) (ILO, 2024). By being a member of the ILO and ratification of the above

Besides, the amendment was introduced as a commitment in fulfilling Malaysia Agreement 1963 (MA63)

gas, and timber, becomes the root of grievances among Sabahans and Sarawakians. For instance, Sabah is

entitled to 40% of the net revenue collected under MA63's 'Special Grants to the State of Sabah and Sarawak,'

Sabah with those in peninsula (Mohamed Radhi & Sallehuddin, 2024). The Malaysian Trades Union Congress

(MTUC) Sabah also welcome the amendment and described it as a gift to private sector employees in Sabah,

major step towards improving working conditions across the State (Sokial, 2024). Ensuring equal protection

and treatment before the law is a constitutional right enshrined under Article 8(1) of the Federal Constitution

(Amin & Afandi, 2021). It prohibits discrimination based on race, gender, religion, descent or place of birth

(Chin, 2019). Therefore, this study submits that ensuring equal protection for employees in Sabah falls within

the ambit of the equality clause. Besides, the right to work can also be invoked under Article 5(1) of the

Constitution which guarantees the right to life and personal liberty (Nik Saleh, 2020). In the case of Tan Tek

Seng v. Suruhanjaya Perkhidmatan [1996] 1 MLJ 261, the majority of the Court of Appeal ruled that the term

'life' in the right to life under Article 5(1) of the Federal Constitution encompasses all aspects essential to life

employers (Ensher et al., 2001) Nevertheless, it is suggested that the wage cap should be removed altogether,