This question arises when we work for a company for a period of time without an employment contract. So if anything happens to us, are we protected by labour laws?
First, we need to determine whether you are Contract FOR Service (CFS) or Contract OF Service (COS). A new section was introduced to the Employment Act 1955 effective 1 Jan 2023 – Section 101C, which clarifies the presumption of who is an employee and employer. It states that in the absence of a written employment contract, “…it shall be presumed until the contrary is proved that person is an employee –
a) where his manner of work is subject to the control or direction of another person;
b) where his hours of work are subject to the control or direction of another person;
c) where he is provided with tools, materials, or equipments by another person to execute work;
d) where his work constitutes an integral part of another person’s business;
e) where his work is performed solely for the benefit of another person; or
f) where payment is made to him in return for work done by him at regular intervals and such payment constitutes the majority of his income.”
Meanwhile, the Act under Section 2 defines contract of service as “any agreement, whether oral or in writing and whether express or implied, whereby one person agrees to employ another as an employee and that other agrees to serve his employer and includes an apprenticeship contract;”
Hence, a verbal contract can also be a legal contract. Just that we need to know if we are CFS or COS. And only COS are protected by the Act.
Complicated? Yes, it is. That’s why before we agree to join any company, please do insist of an employment contract.
xoxoxo, AuntyHR
