Susie is the owner of ArtMark Sdn Bhd which is a small business engaged in selling stationery. In September 2013, ArtMark Sdn Bhd hired Linda as the administrative clerk to handle paper works for the company. Due to an oversight, Susie did not prepare the complement contract in the employment of Linda. However, all the terms and conditions of the employment were stated in an email when the job was offered to Linda. Linda has also replied to the email saying she agreed to take up the job offer. In the email, Susie explained to Linda that her salary is RM 1,500 per month and the working hour is from 9 am to 6 pm on weekdays. Susie also wrote in the email that the probation period is three months and one month notice is required to terminate the contract.
During the first week of employment, Linda's performance was not satisfactory. She could not take criticisms and she argued with Susie who tried to correct her mistakes. There were a few times when Susie could not hold herself and she had scolded Linda for her bad attitude in front of other employees.
In the second week of employment, Linda was absent from work for two consecutive working days. When Susie tried to contact her on the third day, Linda told Susie that she would like to quit the job immediately and Susie should pay her for the first week salary. Susie was very angry with Linda's action and refused to pay her the salary. In return, Susie required Linda to pay her RM 1,500 for not serving one-month notice in terminating the employment. Linda argued that there is no contract of employment given to her and therefore she does not need to comply with the terms and conditions imposed. Linda threatened that she will bring this case to the labour office as she has worked for one week and Susie has no right to ask for any payment from her.
REQUIRED:
Advice Susie whether Linda needs to pay the RM 1,500 for not serving one-month notice in terminating the employment when the contract of employment is not given to her.
Support your answer with relevant labour laws. (20 marks)
SUGGESTED ANSWER:
Contracts of service means any agreement, whether oral or in writing and whether express of implied, whereby on person agrees to employ another as an employee and that other agrees to serve his employer as an employee and includes an apprenticeship contract (Section 2 of the Malaysian Employment Act 1955)
Therefore, Susie is advised that a contract of employment does not have to be in writing in accordance to section 2 of the Act. In this case, though Linda was not given a copy of the contract of employment, all the terms and conditions of the employment were stated in an email when the job was offered to Linda. Furthermore, Linda has also replied to the email saying she agreed to take up the job offer. Therefore, there is employer-employee relationship between Susie and Linda, and Linda has to comply with the terms and conditions of employment as stated in the email.
However, Section 10 of the Act requires that a contract of services for a specified period of time exceeding on month, or for the performance of a specified piece of work, where the time reasonably required for the completion of the work exceeds or may exceed on month shall be in writing. Therefore, it is advisable that Susie must make sure a copy of employment contract in the form of offer letter, staff handbook etc. much be given to her employees.
Either party to a contract of service may at any time give to the other party notice of his intention to terminate such contract of service. Section 12 of the Act states that where the contract is silent on the length of the notice period then the notice shall be not less than:
- 4 weeks notice if the employee has been employed for less than two years on the date on which the notice is given;
- 6 weeks notice if the employee has been employed for two years or more but less than five years on the date on which the notice is given;
- 8 weeks notice if the employee has been employed for five years or more on the date on which the notice is given.
Section 13 of Employment Act 1955 states that either party to a contract of service may terminate such contract of service without notice or if notice has already been given in accordance with section 1 without waiting for the expiry of that notice, by paying to the other party an indemnity of a sum equal to the amount of wages which would have accrued to the employee during the term of such notice or during the unexpired term of such notice.
In this case, it was clearly stated in the email that one month notice is required to terminate the contract. Linda much fulfil this term if she would like to terminate the contract. Linda would like to terminate the contract immediately without servicing the notice; therefore she much pay Susie an indemnity of a sum equal to the amount of wages during the term of such notice or during unexpired term of such notice.
To conclude, Susie has the right to ask Linda for RM 1,500 as an indemnity for not serving the notice of termination.
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