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Malaysia Labour Contract Drafting

Update Date:2015-9-28 19:38:45 Source:Tannet (Malaysia) Sdn Bhd Views:570

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Malaysia Labour Contract Drafting, the Act requires an employer to issue a letter of appointment to his prospective employee, stating the terms and conditions of employment which will become the basis of the contract of services and obligations between the employer and the employee, before such employee commences employment. The contract is deemed to have been accepted by the employee once he reports for work. However, under such circumstances the employee will be at the extreme disadvantage as specific terms of service are not given in writing. It is important that the employee receives his letter of appointment first before reporting for work.


S67 provides that such letter of appointment must also be made available for inspection by the officer of the Malaysia Labour Department, to determine whether the terms and conditions of such appointment are less favourable than the terms specified in the Act.


The express terms of the contact of employment:

1. Name of employee and NRIC number (Identified Card Number)

2. Occupation or appointment

3. Salary or Wage rates (excluding other allowances)

4. Other allowance payable and rates

5. Rates for overtime work

6. Other benefits (including any approved amenity or approved service)

7. Agreed normal hours of work per day

8. Agreed period of notice for termination of employment or wages

9. Number of days entitlement to public holidays and annual leave with pay

10. Duration of the wage period (weekly or monthly salary)


In the case of large companies a separate booklet is required for disciplinary procedures and grievance procedures. (this required is not needed for companies that have less than 20 employees- Section 9 Employment Act 1995).If the employee does not follow the grievance procedure that has been set by the company, then any award he is entitled to may be reduced.


Large companies must also provide a separate statement of the Health & Safety requirements that it adheres to (this is not required for companies that have less than 5 employees)


Note: if there any changes of these contractual terms, a written statement of the change must be given to the employee within one month of the change to make it effective.


Unfavourable terms for Malaysia Labour Contract Drafting

1. Total deductions in one month

2. Entitlement to paid sick leave

3. Overtime

4. Holidays

5. Annual leave

6. Hours of work


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