The Employee Outsourcing Agreement serves as a crucial legal framework for companies operating in Malaysia who wish to engage external workforce through professional employment organizations. This document is essential when a company needs to supplement its workforce while delegating employment administration and statutory compliance to a specialized service provider. The agreement encompasses all aspects of the outsourcing relationship, including recruitment, payroll management, statutory benefits, and workplace regulations in accordance with Malaysian law. It's particularly relevant in situations where companies need flexibility in workforce management, require specialized skills on a project basis, or wish to focus on core business activities while outsourcing human resource management. The document ensures compliance with Malaysian employment legislation while clearly delineating the rights, obligations, and liabilities of both the outsourcing provider and the client company.
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1. Parties: Identification of the outsourcing company (service provider) and the client company, including full legal names, registration numbers, and registered addresses
2. Background: Context of the agreement, including the client's need for outsourced employees and the provider's capacity to provide such services
3. Definitions: Definitions of key terms used throughout the agreement, including 'Outsourced Employees', 'Services', 'Work Location', etc.
4. Scope of Services: Detailed description of the outsourcing services to be provided, including recruitment, placement, and management of employees
5. Term and Termination: Duration of the agreement, renewal terms, and circumstances under which either party may terminate the agreement
6. Service Provider Obligations: Key responsibilities of the outsourcing company, including recruitment, payroll management, statutory compliance, and employee welfare
7. Client Obligations: Responsibilities of the client company, including workplace safety, supervision, and cooperation with the service provider
8. Employee Management: Processes for employee selection, replacement, performance management, and discipline
9. Fees and Payment Terms: Service fees, payment schedule, and terms for fee adjustments
10. Statutory Compliance: Commitment to comply with Malaysian employment laws, social security requirements, and other relevant regulations
11. Confidentiality: Protection of confidential information exchanged between parties and through employees
12. Indemnification: Mutual indemnification provisions covering employment-related claims and statutory violations
13. Insurance: Required insurance coverage for employees and operations
14. Dispute Resolution: Process for resolving disputes between parties, including jurisdiction and governing law
15. General Provisions: Standard clauses including notices, amendments, assignment, and entire agreement
1. Immigration Compliance: Required when foreign workers are involved, detailing visa and work permit requirements
2. Employee Benefits Program: Optional section detailing additional benefits beyond statutory requirements
3. Intellectual Property Rights: Required when employees will be involved in creation of IP or handling sensitive proprietary information
4. Non-Competition: Optional restrictions on the service provider's ability to provide similar services to competitors
5. Transition Services: Required when there's a need to detail the process of transitioning existing employees or services
6. Performance Metrics: Optional section defining KPIs and service level agreements
7. Emergency Response: Required for high-risk industries or when dealing with essential services
8. Data Protection: Required when significant personal data processing is involved
9. Trade Union Relations: Required when dealing with unionized workforce
1. Schedule 1: Service Fees and Charges: Detailed breakdown of service fees, markup percentages, and additional charges
2. Schedule 2: Minimum Employee Requirements: Specifications for employee qualifications, experience, and skills
3. Schedule 3: Service Levels: Detailed service level agreements and performance metrics
4. Schedule 4: Statutory Benefits: List of mandatory benefits under Malaysian law and their administration
5. Schedule 5: Operating Procedures: Detailed procedures for day-to-day management of outsourced employees
6. Appendix A: Employee Code of Conduct: Standard conduct requirements for outsourced employees
7. Appendix B: Health and Safety Guidelines: Workplace safety requirements and procedures
8. Appendix C: Forms and Templates: Standard forms for employee management, including attendance, leave, and performance reviews
9. Appendix D: Insurance Coverage Details: Specific insurance policies and coverage amounts
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