Secondment Agreement Template for Malaysia

A Secondment Agreement lets one company temporarily loan their employee to work at another organization while keeping their original employment terms intact. Under Malaysian employment law, this arrangement helps businesses share expertise and fill skill gaps without creating new permanent positions.

These agreements spell out key details like work duties, duration, confidentiality rules, and which company handles salary and benefits. They're especially common in Malaysian multinational corporations, government-linked companies, and professional services firms. The Industrial Relations Act 1967 and Employment Act 1955 continue to protect the seconded employee's rights throughout their temporary assignment.

Use a Secondment Agreement when your organization needs specialized skills or expertise from another company's employee for a specific project or duration. This arrangement works perfectly for Malaysian companies launching new departments, managing knowledge transfer between subsidiaries, or filling temporary leadership gaps during parental leave or sabbaticals.

The agreement becomes essential when sharing technical experts across group companies, implementing new systems, or training local staff through international assignments. Malaysian law requires clear documentation of these arrangements to protect both employers and maintain compliance with immigration rules, especially when the secondment involves foreign workers under the Employment (Restriction) Act 1968.

• Secondment Letter From Employee To Employer: Employee-initiated request for temporary assignment, often used for career development or special projects
• Cross-Border Secondment: Involves international assignments with additional provisions for immigration, tax implications, and compliance with Malaysian foreign worker regulations
• Intra-Group Secondment: Used between related companies or subsidiaries in Malaysia, focusing on knowledge transfer while maintaining group employment benefits
• Project-Based Secondment: Shorter-term agreements specifically tied to project completion, common in IT and construction sectors
• Skills Transfer Secondment: Structured agreements emphasizing training and expertise sharing, popular in Malaysian GLCs and multinational corporations

• Home Organization (Original Employer): Initiates or approves the secondment, maintains the employment contract, and often continues handling payroll and benefits
• Host Organization: Receives the seconded employee, provides day-to-day supervision, and typically covers operational costs or pays fees to the home organization
• Seconded Employee: Performs duties at the host organization while maintaining employment ties with their original employer
• Human Resources Departments: Coordinate between both organizations, manage documentation, and ensure compliance with Malaysian employment laws
• Legal Teams: Draft and review agreements, ensure protection of intellectual property, and address cross-border requirements when applicable

• Basic Details: Gather full names and addresses of both organizations, employee details, and secondment duration
• Role Specifics: Document job title, duties, reporting lines, and performance evaluation criteria at the host organization
• Financial Terms: Clarify salary arrangements, benefits continuation, and cost-sharing between organizations
• Compliance Check: Review Malaysian employment laws, especially for foreign workers or cross-border arrangements
• Operational Logistics: Define working hours, leave policies, and workplace arrangements
• Document Generation: Use our platform to create a legally-sound agreement that includes all mandatory elements and minimizes drafting errors

• Identification Details: Full legal names and addresses of home organization, host organization, and seconded employee
• Duration Clause: Clear start and end dates, extension options, and early termination provisions
• Scope of Work: Detailed job description, reporting structure, and performance metrics at host organization
• Employment Status: Confirmation of continued employment with home organization under Employment Act 1955
• Remuneration Terms: Salary arrangements, benefits continuation, and cost allocation between parties
• Confidentiality Provisions: Protection of trade secrets and intellectual property for both organizations
• Governing Law: Explicit reference to Malaysian law and jurisdiction for dispute resolution

A Secondment Agreement differs significantly from an Agency Agreement in several key aspects, though both involve one party performing work for another. Understanding these differences is crucial for Malaysian businesses to choose the right agreement for their situation.

• Employment Relationship: Secondment maintains the original employment relationship with benefits and tenure intact, while agency creates an independent contractor relationship
• Control and Supervision: Seconded employees work under the host company's daily supervision while maintaining their primary employer, whereas agents operate independently with more autonomy
• Legal Obligations: Secondment involves shared responsibilities between two employers under Malaysian employment law, while agency relationships fall under commercial law and the Contracts Act 1950
• Duration and Purpose: Secondments are typically temporary and project-specific, while agency agreements often establish ongoing business relationships without fixed end dates