Sunday, August 7, 2016

Wages : Travelling Allowance : My point of view

Section 2, Employment Act 1955 interpreted wages as basic wages and other cash payable for work done. It went further by excluding payment in cash such as traveling allowances, bonuses amongst other from the interpretation of wages.

Travelling allowance, for the purpose of payment to an employee is a form of payment that is payable not for work done.

In order to better understands why, we can use the workmen compensation model to show us why travelling  allowance is not payable for work done.

 The principle of "Going and Coming Rule", laid down by the law since the employer derives no
benefit from an employee’s ordinary commute to and from work. We can also simplified this principle as  punch in and punch out (clock-in clock-out), which during this interval an employer is liable to the action by employee or injury to the employee in the course of employment is one of the measurements weather cash payable is wages or not.

The master, or we call them employer has the right to control the servants or employee within time limited by law. Clearly if the employer wish to pay travelling allowance for the purpose of paying for the journey from home to the place of employment, the payment shall not for work done but outside of the "control period" that an employer has against his employee.

Different from basic wages, payable as a consideration for the whole duration of contract of service.
The Malaysian legislature has done justice to the interpretation of wages simply by acknowledging the existence of these dichotomy, namely basic wages and cash payable for work done.

In my opinion, if an employer has decided to name the travelling allowance as travelling allowance or simply naming it under "travelling" will the exclusion takes effect, other name in the form of petrol allowance, car or car maintenance allowance will have no effect as to exclusion from the interpretation of other cash payable for work done.

The value of travelling concession, is when an employer put a price tag to transport provided by him to commute his employee to the place of employment and shall also be excluded from the interpretation since no cash changed hand. If there is any, the cash shall be payable to a specific purpose or person namely the transportation provider.

In conclusion it is safe to say travelling allowance is not wages under section 2 Employment Act 1955.

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