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Notice to Terminate Service Contract document sample
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Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
Recruitment and Contract
There is no legal provision on probationary period.
Probationary period is usually stated as one of the
Probationary Period General and prevalent practice - 3 months. 3 months 3 months
terms and conditions in the letter of appointment or
employment contract
Probationary Period No provision in law, but this is normally specified in General and prevalent practice - a further 3 months
3 months extension
Extension if unsatisfactory the contract of service. extension if the performance is unsatisfactory
1 week for non
Notice Period during No provision in law, but notice of termination by
Generally from 24 hours to one month 2 weeks for all executives executives, 2 weeks for
probationary period. either party is specified in the contract of service.
executives
Follow the terms of contract of service in writing,
one month for non one month for non
and the length of notice must be the same for both Generally the period of notice of termination is stated in
Notice Period for normal executives and junior executives and junior
employer and employee. But in the absence of the contract of service or general terms and conditions
contract executives, 2 months for executives, 3 months for
such a provision in the contract of service, then the of employment
senior executives senior executives
law governs that:
one month for non
one month for non executives and junior executives, 2- executives and junior
<2 years service 4 weeks
3 months for senior executives executives, 3 months for
senior executives
one month for non
one month for non executives and junior executives, 2- executives and junior
2 - 5 years service 6 weeks
3 months for senior executives executives, 3 months for
senior executives
one month for non
one month for non executives and junior executives, 2- executives and junior
> 5 years service 8 weeks
3 months for senior executives executives, 3 months for
senior executives
Either the employer or employee may terminate a
contract of service, if the notice has already been
given accordingly, without waiting for the expiry of
Termination of contract
that notice, by paying to the other party an indemnity as in law as in law as in law
without notice
of a sum equal to the amount of wages which would
have accrued to the employee during the unexpired
period of such notice.
Either the employer or employee may terminate a
contract of service without notice in the event of any
wilful breach by the other party of a condition of the
contract of service.
1 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls 5/5/2011
Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
Fixed Term Contract No provision in the law Contract terminates upon expiry unless renewal
A contract of service for an unspecified period of
Indefinite Contract time shall continue until terminated in accordance as in law
with the provisions for termination
Generally 55 for both males and females with an option
Retirement Age M/F No provision in the law to retire early at 50 specified under the employment 55 60
contract. Some company's retirement age is 60
Employment Conditions
Unless otherwise provided or under specical
conditions approved by the authorities, the Generally 40 to 48 working hours per week. 9am to Weekdays 9am - 5pm Weekdays 8:30am -
Working Hours (Day Work)
employee shall not be required under his contract of 5pm or 8:30 to 5:00pm Saturday 9am - 1pm 5pm for 5-day week
service to work ----
more than 8 hours in one day
more than 5 consecutive hours without a period of
leisure of not less than 30 minutes duration
in excess of a spread over period of 10 hours in one
day
more than 48 hours in a week
Three working shifts Three working shifts
Shift workers may be required to work for more than
Night 23:00 - 0700 Night 22:00 - 0600
Working Hours (Shift Work) 8 hours a day or more than 48 hours a week under As in law
Morning 0700 - 1500 Morning 0600 - 1400
the following conditions:
Afternoon 1500 - 2300 Afternoon 1400 - 2200
for every 5 consecutive hours of work, there must
be a break of 30 minutes
the average number of hours over any period of
three weeks should not exceed 48 hours per week;
and
they should not work for more than 12 hours in any
one day
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Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
Overtime
overtime after normal hours
1.5 times employee's hourly rate of pay as in law as in law as in law
of work
if work less than half his normal hours of work - 1
working on a rest day as in law as in law as in law
day's wages at ordinary rate of pay
if work more than half his normal hours of work but
does not exceed his normal hours of work - 2 days' as in law as in law as in law
wages at ordinary rate of pay
If work in excess of his normal hours of work - not
as in law as in law as in law
less than 2 times hourly rate of pay
Work on a Public Holiday regardless that the period
working on a Public Holiday of work done is less that the normal hours of work - as in law as in law as in law
2 days's wage at ordinary rate of pay
Any hour in excess of the normal hours of work - 3
as in law as in law as in law
times hourly rate of pay
Generally annual leave benefits are better in the
Paid annual leaves will be entitled only after every
Vacation (Annual Leave) general labour market. Senior executives may be
12 months of continuous service
given more annual leave benefits.
Year of service
< 2 years 8 days for each year as in law and usually better for executives 14 days as in law
more than 2 years but less
12 days for each year as in law and usually better for executives 18 days as in law
than 5 years
5 years and more 16 days for each year as in law and usually better for executives 22 days as in law
Sick Leave
Year of service
< 2 years 14 days for each calendar year as in law as in law as in law
more than 2 years but less
18 days for each calendar year as in law as in law as in law
than 5 years
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Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
5 years and more 22 days for each calendar year as in law as in law as in law
When hospitalisation is necessary - 60 days in
aggregate, but the total number of paid sick leave in
a calendar year shall not be more then 60 days.
as in law as in law as in law
Any sick leave granted immediately after
hospitalisation leave for the purpose of recuperation
should be treated as hospitalisation leave.
Generally practised in most companies as special
compassionate paid leave, and will be stated as terms
Special Leave No provided in the law
and conditions in the contract of service or collective
agreeement
As stated in the terms and conditions of employment 3 days but limited to 5
Birth of Child No provided in the law
contract children
As stated in the terms and conditions of employment
Death of Spouse or child No provided in the law 3 days
contract
As stated in the terms and conditions of employment
Death of Father or Mother No provided in the law 3 days
contract
As stated in the terms and conditions of employment 5 days once only in the
Marriage No provided in the law
contract service
As stated in the terms and conditions of employment
Marriage of a child No provided in the law 2 days
contract
Fire/flood directly affecting the
As stated in the terms and conditions of employment
employee and/or his/her No provided in the law 1 day
contract
property
10 days with 4 compulsory fixed Public Holidays, the As in law, but most companies follow all the 15 Public
Public Holidays 15 days as in law
other 6 days are to be selected by the employer Holidays in Malaysia
4 compulsory fixed Public Holidays are: King's
Birthday, The National Day, The Workers' Day, If a Public Holiday falls on a rest day, the next working
Birthday of the Ruler of the State in which the day will be a paid substituted holiday
employee works under the contract of service
Maternity Leave 60 days as in law as in law as in law
Paternity leave is same as Birth of Child for fathers and
Paternity and Parental
No provision in the law parental leave is considered as annual leave or no-pay
Leave
leave
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Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
Remuneration
Generally covered in the terms and condition of
employment contract or collective agreeement. If
there is no such provision in the terms and conditions 1 month plus ex gratia
Bonus No provision in law 1 month
of employment, it will be the discretion of the employer incentive
to grant a bonus based on the performance of the
company in the year.
No provision in labour law, but there are some
The market rate is much higher than the minimum
minimum wage guidelines for employees of certain
wage guidelines. Thus the guidelines do not serve any
Minimum Wage industries - shop assistant, cinema workers, port
purpose to protect employees under those categories
handlers, hotel and restaurant workers that are
of the workforce.
covered by Wages Councils Act.
Vacation bonus No provision in law none
12 months with a bonus (if any) paid on the end of 12th
month or on the 13th month. Normally the contractual
amount in the contract of service or collective
Months of salary payment 12 months
agreement, if bonus is given, is one month of basic
salary. Employers may give more during a year of
good profitability performance.
Company directors given
No provision in law. But any housing allowance Normally none for junior employees, but some
housing allowance,
Housing Allowance provided to employees will be considered as benefit companies provide this benefit for executives or senior
executives given interest
that is subjected to income tax exectuives
subsidised housing loan
Employers (with more than 10 employees) have to
contribute 0.5% to1% (depending on the paid up
capital) of total payroll to a Human Resource
Employers are responsible and pay for the training of
Development Fund (HRDF). HRDF is managed by
employees, and training expenses will be subsidised by
Training reimbursement a division of the Human Resource Ministry.
the HRDF grants for companies that are contributing to
Expenses incurred in training of employees may be
the HRDF.
reimbursed by this fund from 50% to 100% of the
training expenses, up to the limit of the full amount
of contributions for a year.
Social Coverage Describe with Employer and Employee Costs
5 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls 5/5/2011
Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
Covered under sick leave and hospitalisation leave
Payment of salary after
and the Employees' Social Security Insurance (see
accident or sickness
below)
Some companies may insure senior executives for life,
Life insurance No provision in law
and insurance premium paid by companies
Early retirement No provision in law Optional beneift in some companies.
This is a benefit option only for government
Pension
employees
Principle of the pension
50% of last drawn pay if retirement is at 56.
arrangements
The widow and ophan shall be entitled to the
Widows and orphan
pension in the event of a death of government
pensions
employees
Financial relief and social security protection of
employees are provided for under compulsory
savings in the Employees Provident Fund (EPF).
S.A.R. Retirement Savings Both employers and employees have to make
Scheme monthly contributions to the EPF (12% of wages for
employers and 11% of wages for employees).
Employees may make partial withdrawal at age of
50 and full withdrawal at age of 55.
Employer and Employee
as in EPF above
Pension Contributions
Under the Employees Social Security (SOCSO)
Accident Insurance
Insurance Scheme (see below)
Employer may partial or fully subsidise the premium of Group health insurance
Health Insurance No provision in law such health insurance in a group covered by insurance premium for executives
companies. are fully subsidised
Childcare No provision in law
Long Term Care Insurance No provision in law
Covered by Employees' Social Security (SOCSO)
Disability Insurance
Act
Child Allowance No provision in law
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Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
Social Insurances
This is covered under than Employees' Social
The SOCSO Insurance covers a broad category of
Security (SOCSO) Act as a protection for
protection benefits for employees. These are Invalidity
employees and their families in event of disability
pension, temporary and permanent disability
out of accidents or sickness arising during
benefits,Dependents' benefits, Medical treatment and
employment. The schemes of payment are
Survivors' pension. The pension quantum for
Pension and disability financed by compulsory contributions from
employees certified by a medical baord to be invalid
employers and employees (earning below RM2000
amounts to not more than 65% of the last earned
per month) at a rate based on the wages.
wages. Medical expenses for treatment of
Employees earning over RM2000 may opt for this
employment injury by a panel of appointed doctors will
insurance scheme. The beneifts provided under the
be compensated.
SOCSO Act are shown in the right column
Retirement Savings Sceme
This is the same as the Employees' Provident Fund
(SAR)
No provided in the law, but there is a provision of
compensation for layoff benefits in the labour law.
- 1 year to 2 years' service - 10 days' wages per
year
Unemployment insurance
- 2 years' to 5 years' service - 15 days' wages per
year
- 5 years or more years' service - 20 days' wages
per year
Professional and non-
professional accident not provided in law
insurance
Loss of earnings insurance
covered by the SOCSO Act as above
for sickness
Generally companies may have Group Hospitalisation
Health Insurance no provision in law
insurance for executive staff.
Retirement Medical Benefits no provision in law
Day Care no provision in law
Termination Indemnities
7 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls 5/5/2011
Bunge 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls
Market Conditions Summary - MALAYSIA
LAW MARKET MARKET Example 1 MARKET Example 2
general information
After completion of 10
years service - 7 days' last
drawn pay per year of
service.
Some employers may indemnify long service After completion of 20
Employee termination employees who voluntarily resign, except to avoid years service - 14 days'
no provision in law
benefit (voluntary) dismissal, a quantum of resignation indemnity depends last drawn pay per year of
on the length of service upon termination. service.
After completion of 30
years service - 20 days'
last drawn pay per year of
service.
-
1 year to 2 years' service - 10 days' wages per year Unless the business is ceased, most employers
Employee termination - 2 years' to 5 years' service - 15 days' wages per practise voluntary separation scheme (VSS) to layoff 30 days for each year of
as in law
benefit (Layoff) year employees giving employees a higher benefits than the service for VSS
- 5 years or more years' service - 20 days' wages law requires.
per year
Payroll Services in Malaysia
Payroll Provider Price per paysheet etc Services Performed
There are HR application
Payroll management, web enabled HR workflow
service providers that provide
applications, employees self service,
outsource HR services
Benefits Providers Provider Cost
Health Insurance Insurance companies premium depends on the amount insured
Pension Government for government employees
Life Insurance Insurance companies premium depends on the amount insured
Personnel accident insurance Insurance companies premium depends on the amount insured
8 9405acbc-7f87-41b9-bc80-cc8b155ac0b0.xls 5/5/2011
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