Document background
The Severance Pay Contract serves as a crucial legal document in Malaysian employment relationships, typically used during workforce restructuring, redundancy situations, or mutually agreed employment terminations. This document is essential for companies operating in Malaysia to ensure compliance with local employment laws while providing clear terms for severance payments and associated benefits. It addresses key requirements under the Employment Act 1955, Industrial Relations Act 1967, and Employment Insurance System Act 2017, offering protection for both employer and employee interests. The contract typically becomes necessary during company restructuring, downsizing operations, or when implementing voluntary separation schemes, providing a clear framework for termination benefits and obligations.
