Force Majeure Clause in Employment Contract Sample Malaysia

A force majeure clause is a very important provision in an employment contract in Malaysia, particularly during times of unforeseen events or circumstances that are beyond the control of both parties. This article will provide a sample force majeure clause for an employment contract in Malaysia, along with relevant information that employers and employees need to know.

What is a Force Majeure Clause?

A force majeure clause is a contractual provision that allows the parties to suspend, delay, or terminate their contractual obligations if certain unforeseeable and uncontrollable circumstances occur. Such circumstances can include natural disasters, terrorist attacks, government actions, or labour disputes.

In an employment contract, a force majeure clause typically protects the employer in case of events that would make it impossible or impractical for the employee to fulfil their job duties. Alternatively, it can protect the employee from being held responsible or liable for non-performance in such circumstances.

Sample Force Majeure Clause

Here is an example of a force majeure clause that can be included in an employment contract in Malaysia:

“Force Majeure Clause: Neither party shall be liable for any delay or failure to perform any obligation under this Agreement resulting from any cause beyond its reasonable control, including but not limited to acts of God, government restrictions (including the denial or cancellation of any necessary license or permit), wars, civil disturbances, epidemics, strikes, labour disputes, lockouts, or other industrial disturbances, fire, floods, earthquakes, severe weather conditions, power failure, or the failure of telecommunications or other third-party service providers. The party affected by such an event shall immediately notify the other party, and both parties shall use their best efforts to resume performance as soon as possible after such an event.”

What Employers and Employees Need to Know

It is essential for both employers and employees to understand what the force majeure clause means and how it can be invoked in the event of unforeseen circumstances. Here are some important points that both parties should consider:

– The clause should be included in the employment contract from the beginning and be reviewed periodically.

– The clause must be clear and unambiguous to avoid confusion or disputes in the future.

– The clause should specify which events qualify as force majeure and what the consequences will be if such an event occurs.

– The impacted party must provide immediate notice to the other party and take reasonable measures to mitigate the effects of the event.

– The parties should make a good faith effort to resume performance as soon as possible and document all efforts made to do so.

– The clause should specify how long the suspension, delay, or termination will last, and what happens if the event lasts for an extended period.

– If the event continues for an extended period, the parties may wish to renegotiate the terms of the contract to ensure fairness and equity.

Final Thoughts

A force majeure clause is an essential provision that all employment contracts in Malaysia should include. It protects both parties in case of unforeseen events, but it must be drafted with care and reviewed periodically to ensure it remains relevant and enforceable. Employers and employees need to understand the implications of the clause and act in good faith to mitigate any potential losses or difficulties. By working together, both parties can weather any unforeseen events and continue working towards their mutual goals.

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