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Labour Hire Contract Template for Malaysia

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Key Requirements PROMPT example:

Labour Hire Contract

"I need a Labour Hire Contract for temporary construction workers in Malaysia, specifically for a 12-month project starting March 2025, that includes provisions for overtime, shift work, and specialized safety requirements for working at heights."

What is a Labour Hire Contract?

This Labour Hire Contract is designed for use in Malaysia when establishing temporary or long-term workforce arrangements through a labor hire company. It is particularly useful when businesses need flexible staffing solutions while ensuring compliance with Malaysian employment laws, including the Employment Act 1955, Minimum Wages Order, and various social security requirements. The contract comprehensively addresses the complexities of the triangular employment relationship, including clear delineation of responsibilities between the labor hire company and host employer, worker protections, remuneration structures, and statutory compliance requirements. This document is essential for businesses operating in Malaysia that utilize external workforce solutions, ensuring proper documentation of employment terms while protecting the interests of all parties involved.

What sections should be included in a Labour Hire Contract?

1. Parties: Identifies the three parties to the agreement: the labor hire company (provider), the worker, and the host employer

2. Background: Sets out the context of the agreement and the intention to create a labor hire arrangement

3. Definitions: Defines key terms used throughout the agreement including 'Services', 'Assignment', 'Work Location', etc.

4. Nature of Relationship: Clarifies the triangular relationship and confirms the worker's employment status with the labor hire company

5. Term of Employment: Specifies the duration of employment, whether fixed-term or ongoing

6. Assignment Details: Outlines the specific role, duties, and responsibilities of the worker at the host employer

7. Remuneration and Benefits: Details the wage rate, payment frequency, and statutory benefits as per Malaysian law

8. Working Hours and Leave: Specifies standard working hours, overtime arrangements, and leave entitlements

9. Statutory Contributions: Covers EPF, SOCSO, and EIS contributions as required by Malaysian law

10. Workplace Health and Safety: Sets out safety obligations of all parties and compliance with OSHA requirements

11. Confidentiality: Protects confidential information of both the labor hire company and host employer

12. Termination: Details circumstances and procedures for termination of employment

13. Dispute Resolution: Establishes process for handling disputes between parties

14. Governing Law: Confirms Malaysian law as governing law and jurisdiction

What sections are optional to include in a Labour Hire Contract?

1. Foreign Worker Provisions: Required when engaging foreign workers, including visa and work permit requirements

2. Industry-Specific Compliance: Added for specialized industries with additional regulatory requirements

3. Non-Competition: Optional restrictions on working with competitors, if appropriate and enforceable

4. Intellectual Property: Required for roles involving creation of IP or access to proprietary technology

5. Performance Standards: Optional section detailing specific KPIs and performance expectations

6. Training Requirements: Include when specific training or certifications are required for the role

7. Vehicle/Equipment Provisions: Required when worker needs to use specific tools or vehicle for work

8. Insurance Requirements: Additional insurance requirements beyond statutory coverage

What schedules should be included in a Labour Hire Contract?

1. Schedule 1 - Position Description: Detailed description of the worker's role, duties, and responsibilities

2. Schedule 2 - Remuneration Details: Breakdown of salary, allowances, and benefits structure

3. Schedule 3 - Host Employer Workplace Policies: Key workplace policies and procedures of the host employer

4. Schedule 4 - Performance Metrics: Specific performance indicators and measurement criteria

5. Schedule 5 - Equipment List: List of any equipment or tools provided to the worker

6. Appendix A - Code of Conduct: Expected standards of behavior and professional conduct

7. Appendix B - Safety Procedures: Specific safety protocols and emergency procedures

8. Appendix C - Statutory Benefits Summary: Summary of all statutory benefits and entitlements under Malaysian law

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



































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Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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