Employment contracts in Malaysia are commonly in written form. The contract must specify the terms of the employment such as the location of work, job description, wages, overtime, working hours, leaves and entitlements, health and safety matters, probation and termination. Written contracts must include conditions for termination of the contract.
Labor contracts can be for a fixed term or an indefinite period. A fixed-term contract for more than one month must be in writing. If an employee’s fixed-term contract is renewed multiple times, then they will be considered a permanent employee for dismissal purposes. Probation periods are capped at three months and an employer has the right to terminate the contract during the probation period if the employee is incompetent. Pre-employment background checks are not prohibited but may be subject to data privacy rules.