Employee Perspective
“The contract looked fishy, the offer came in a simple Word doc no company logo, no letterhead”
“Typos & clauses were general, like copied from somewhere.”
“It stated work hours as 48/week but I thought Malaysia’s limit was 45 hours?”
“Nothing about my probation, bonus, EPF or even how I’d get paid, when I asked for clarification, they just said, ‘This is our standard template, just sign it.”
Employer Perspective
“Why pay for something I can download for free?”
Many businesses or HR teams think…
“A contract is just paperwork, no need to complicate it, we found one online, good enough.”
“If anything goes wrong, we’ll just sort it out with common sense.”
Here’s what happens with generic, outdated contracts with Titanic Epic sized Icebergs!
⚠️ You accidentally break Malaysian labor law, Statutory Authorities come knocking
👩⚖️ You lose in court or tribunal on technicality
😡 Staff misunderstand their entitlements
🤦♂️ You risk disputes over salary, OT, termination, benefits
The Truth :
Contracts aren’t about formality they’re PROTECTION
A solid, legally compliant employment contract
✅ Protects your business in case of disputes
📌 Sets the right expectations from day one
🛡️ Acts as evidence in case of legal claims
🤝 Builds trust with employees, shows you’re serious and transparent
What businesses should include in a proper employment contract
1️⃣ Working hours, probation and leave entitlements
Must follow the latest Employment Act at minimum, 45-hour workweek limit, annual leave, etc
2️⃣ Salary breakdown
Basic salary, allowances, OT rates, bonus eligibility
3️⃣ Termination and resignation terms
Notice period, dismissal procedures, and any non-compete clauses
4️⃣ Statutory obligations
EPF, SOCSO, EIS, and compliance with EA 1955 (amended)
5️⃣ Customized clauses relevant to your business
Confidentiality, remote work rules, training bonds, etc.
A Real Example :
I was asked to review an employment contract and obviously it was ChatGPT’d or downloaded somewhere.
The clause on commissions was vague “Subject to management approval” no clarity, six months later, a dispute arose over RM8,000 in unpaid commissions.
Fortunately, the employee was kind enough to discuss & the company made amends.
If it went to the Labor Office, penalties, legal advice & the staff’s compensation would have cost more.
Good thing is, they now use contracts prepared by a qualified HR consultant.
Final Thought
Contracts are not “just paperwork” they’re your first line of defense & your credibility.
If you think compliance is expensive, try non-compliance.
I am Kevin Goh, Empowering People & Businesses | Building Modern HR for the Evolving Workplace
This article originally appeared on LinkedIn by Kevin Goh – Director. You can read the full post here. Adapted and shared with permission.
