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Labour Hire Agreement for Malaysia

Labour Hire Agreement Template for Malaysia

A Labour Hire Agreement governed by Malaysian law establishes the legal framework for the provision of temporary workers from a labor hire company to a client organization. This agreement addresses key aspects including worker provision, payment terms, workplace safety obligations, and compliance with Malaysian employment legislation including the Employment Act 1955 and Industrial Relations Act 1967. It defines responsibilities for both the labor hire provider and client company, covering crucial elements such as worker management, insurance requirements, dispute resolution, and termination provisions while ensuring alignment with Malaysian labor laws and regulations.

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Labour Hire Agreement

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What is a Labour Hire Agreement?

This Labour Hire Agreement is designed for use in Malaysia when a company needs to engage temporary workers through a licensed labor hire provider. The document is essential for businesses requiring workforce flexibility or specialized labor on a temporary basis, ensuring compliance with Malaysian employment laws including the Employment Act 1955, Industrial Relations Act 1967, and Private Employment Agencies Act 1981. It comprehensively covers worker provision terms, payment structures, workplace safety requirements, and regulatory compliance obligations. The agreement is particularly relevant in the current Malaysian business environment where labor hire arrangements are increasingly common across various industries, especially in manufacturing, construction, and services sectors. It includes specific provisions for both local and foreign worker engagement, workplace safety compliance, and social security requirements under Malaysian law.

What sections should be included in a Labour Hire Agreement?

1. Parties: Identifies and defines the Labor Hire Company, the Client Company, and their respective legal details

2. Background: Sets out the context of the agreement, including the Labor Hire Company's business and the Client's requirements for workers

3. Definitions: Defines key terms used throughout the agreement, including 'Workers', 'Services', 'Charges', etc.

4. Scope of Services: Details the labor hire services to be provided, including worker categories and roles

5. Term and Termination: Specifies the duration of the agreement and circumstances for termination

6. Payment Terms: Outlines fees, charges, payment schedules, and invoicing arrangements

7. Responsibilities of Labor Hire Company: Details obligations including worker screening, compliance with employment laws, and maintaining insurance

8. Responsibilities of Client: Specifies client obligations regarding workplace safety, supervision, and treatment of workers

9. Workplace Health and Safety: Sets out safety obligations and compliance with OSHA requirements

10. Confidentiality: Provisions for protecting confidential information of all parties

11. Insurance and Indemnity: Details required insurance coverage and indemnification obligations

12. Dispute Resolution: Procedures for handling disputes between parties

13. General Provisions: Standard boilerplate clauses including notices, governing law, and entire agreement

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

1. Foreign Worker Provisions: Required when foreign workers are to be supplied, including visa and work permit obligations

2. Conversion Fee: Terms for when a hired worker is offered permanent employment by the client

3. Industry-Specific Compliance: Additional compliance requirements for specific industries (e.g., construction, manufacturing)

4. Intellectual Property Rights: Required when workers may create or have access to IP during their assignment

5. Non-Competition: Restrictions on client hiring workers directly or through other agencies

6. Performance Metrics: Specific KPIs and service levels for worker performance and replacement

7. Training Requirements: Specific training obligations for either party regarding supplied workers

What schedules should be included in a Labour Hire Agreement?

1. Schedule 1 - Service Charges: Detailed breakdown of all charges, rates, and payment terms

2. Schedule 2 - Worker Categories and Specifications: Details of different worker categories, qualifications, and experience requirements

3. Schedule 3 - Service Locations: List of approved work locations and site-specific requirements

4. Schedule 4 - Special Conditions: Any special terms or conditions specific to the engagement

5. Schedule 5 - Workplace Policies: Key workplace policies that hired workers must comply with

6. Appendix A - Required Forms: Standard forms for worker requisition, timesheets, and performance evaluation

7. Appendix B - Insurance Certificates: Copies of required insurance certificates and coverage details

Authors

Alex Denne

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

Jurisdiction

Malaysia

Document Type

Employment Contract

Cost

Free to use
Relevant legal definitions



































Clauses



































Industries









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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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