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Chap2 HRM581 Oct Feb 2023

This chapter discusses the employment contract between employers and employees. [1] It covers types of employment contracts such as permanent, temporary, part-time and full-time contracts. [2] The terms and conditions of employment contracts include job duties, wages, working hours and notice period for termination. [3] Employment contracts can be written, oral or implied based on the conduct of both parties. Common express and implied terms of the contract are discussed.

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331 views

Chap2 HRM581 Oct Feb 2023

This chapter discusses the employment contract between employers and employees. [1] It covers types of employment contracts such as permanent, temporary, part-time and full-time contracts. [2] The terms and conditions of employment contracts include job duties, wages, working hours and notice period for termination. [3] Employment contracts can be written, oral or implied based on the conduct of both parties. Common express and implied terms of the contract are discussed.

Uploaded by

liana baha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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HRM 581

Chapter 2 : The employment


contract

By: Suhaila Mohamed,


Faculty of Business and Management, UiTM.
Oct_Feb 2023
Chapter Outline

1. Conceptualization of employer and employee relationship

2. Types of employment contract

3. Terms and conditions of employment contract

4. Changing the terms & conditions of employment contract

5. Duration of employment contract


The formation of
employer – employee relationships

Employer Employee
• Contract of employment / employment contract / contract of service

• An agreement which legally binding one party who provide paid work
and the other party carries out work as agreed.
What is the difference?

Employer Employee

Independent
Employer
contractor
Thinking cap

1. Why should an employer differentiate


between contract of service and contract
for service?

2. How to differentiate between contract of


service or contract for service?

Update: This semester, we will have 16 statutory laws and one subsidiary law.
Effective 1 Jan 2023
Sec. 101c of the Employment Act

Presumption as to who is an employee and employer

….it shall be presumed until the contrary is proved that a


person is an employee —

(a)where his manner of work is subject to the control or


direction of another person;

(b) where his hours of work are subject to the control or


direction of another person;

(c) where he is provided with tools, materials or equipments by


another person to execute work;
Effective 1 Jan 2023
Sec. 101c of the Employment Act (continued)

(d) where his work constitutes an integral part of another


person’s business;

(e) where his work is performed solely for the benefit of


another person; or

(f) where payment is made to him in return for work done by


him at regular intervals and such payment constitutes the
majority of his income.
Thinking cap

◦ Who is an employee?

◦ Who is an employer?
Types of employer
A. Private sector

1. For profit (e.g. GLC e.g. Petronas Bhd, TNB;


ABC Sdn. Bhd.; Enterprise / Sole proprietor)

2. Not for profit (e.g. NGO)

B. Public sector

1. _________________________________

2. _________________________________

3. _________________________________
Types of Employees
A.
Permanent vs. temporary/fixed-term

B.
Part-time vs. full-time vs. casual

C.
Probationer
Publication of federal legislation
Legal definition of part-time and casual employee

EMPLOYMENT
ACT, 1955

> 30% ≤ 70% of normal working hours per week of a full time employee doing the
same work in the same organization.

EMPLOYMENT
(PART-TIME
EMPLOYEES)
REGULATIONS
2010

≤ 30% of normal working hours per week of a full time employee doing the same work in
the same organization.
Writing exercise 2(a)
1. Justify if Airasia Ride drivers are employees of AirAsia
Berhad.

2. Ahmad is an undergraduate student. During semester


break, he was employed by Abc Sdn Bhd for a month.
His normal working hour is equal as Bala. Bala is a
permanent employee in the company. His normal
working hour is 8 hours per day and 6 days per week.
Justify if Ahmad is a part-time employee.

3. Jo Ann is an undergraduate student. While attending


classes, she is working during the weekends. Justify if
she is a part-time employee.
Terms and Conditions of Employment
1. Is a written contract compulsory?
(Refer to Sec. 10(1) of Employment Act)

2. Does an oral contract legally bind employer and employee?

3. Which of the following is/are the source(s) of a written


employment contract?

a) Offer letter
b) Appointment Letter
c) Company Policy
d) Company Handbook
e) Collective Agreement
TYPES OF TERMS OF
AN EMPLOYMENT CONTRACT

1. Express Terms

2. Implied Terms
Example of Common Express Terms

1. Job title

2. Remuneration and benefits (Note: the current minimum wage order has
changed. Please refer to the discussion under chapter 3)

3. Working hours

4. Probationary period

5. Notice prior to termination

6. Retirement age

7. Transfer / mobility
Implied terms of employment:
Employee’s implied duties

1. Obey all lawful and reasonable orders

2. Work with due care i.e. not be careless or negligent

3. Work faithfully for the employer i.e. acting to protect the


employer’s interests.
What is a lawful order ?

1. Legal

2. Not immoral

3. Not exposing employee to danger

4. Within the scope of employee’s contract


Implied terms of employment:
Employer’s implied duties

1. Providing a safe working environment for his


or her employees

2. A duty to provide work for the purposes of the


employment contract

3. Acting fairly and in good faith


Duration of employment contract
 Business needs vs employees' job security

 MINIMUM RETIREMENT AGE ACT 2012

1. Minimum retirement age shall be 60 years old

2. An employer shall not prematurely retire an employee before


the employee is 60 years old

3. An employee may retire following optional retirement age as


agreed in the contract of service or collective agreement

4. This ruling is not applicable for employee on a fixed term


contract of service of not more than 24 months, among
others.
Writing exercise 2(b)
1. Suggest one situation that could prompt an
employer to amend the terms of an
employment contract.

2. Imagine you are an employer in the retail


industry. Identify an implied term of
employment that you may want to write
down in a written form.

3. Identify the difference between ‘void’ and


‘breach’ employment contracts.
The end of Chapter 2

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