Retirement Contract of Employment in Malaysia: All You Need to Know

Retirement is an inevitable phase in the life of every employee in Malaysia. It is a time when one has to bid adieu to their working life and embrace a new phase of life. Retirement also marks the end of the contract of employment between an employer and an employee. In Malaysia, the retirement age is currently set at 60 years, but it may be revised from time to time. If you are nearing your retirement age, it is crucial to know the retirement contract of employment in Malaysia to avoid legal disputes.

What is a retirement contract of employment?

A retirement contract of employment in Malaysia is an agreement between an employer and an employee that outlines the terms and conditions of employment during the retirement phase. The contract highlights the employee`s duties and responsibilities and the employer`s obligations to the employee during the retirement phase. It also outlines the employee`s entitlements such as retirement benefits, pensions, and other gratuities.

What are the key provisions of a retirement contract of employment?

A retirement contract of employment in Malaysia should contain the following key provisions:

Retirement age: The contract should clearly state the employee`s retirement age and the date of retirement.

Notice period: The employer should provide a notice period to the employee before the retirement date. The notice period should be stated in the contract.

Retirement benefits: The contract should highlight the employee`s entitlements such as retirement benefits, pensions, and other gratuities.

Post-retirement employment: The contract should also specify if the employee will be eligible for post-retirement employment with the employer.

Confidentiality clause: The contract may contain a confidentiality clause that prohibits the employee from disclosing confidential information to a third party.

Non-compete clause: The contract may also contain a non-compete clause that prohibits the employee from competing with the employer`s business after retirement.

How to ensure a smooth retirement process?

To ensure a smooth retirement process, the employee must:

Provide timely notice to the employer of their intention to retire.

Seek the advice of a lawyer or a human resources professional before signing the retirement contract of employment.

Clarify any doubts or ambiguities in the contract before signing it.

Comply with the terms and conditions of the contract during the retirement phase.

Conclusion

Retirement is a crucial phase in the life of every employee in Malaysia. It is therefore essential to understand the terms and conditions of the retirement contract of employment to avoid legal disputes. The retirement contract should be clear, concise, and should contain all the key provisions highlighted above. If you are an employer or an employee nearing retirement age, it is advisable to seek the advice of a professional to ensure a smooth retirement process.