In Malaysia, a force majeure clause is a standard feature of many employment contracts. This clause is important as it protects both the employer and employee from unforeseeable events that may affect the employment contract.
What is a force majeure clause?
A force majeure clause is essentially a legal clause that is included in commercial contracts. Its main purpose is to protect both parties from unforeseen circumstances that may prevent the fulfillment of the contract. This may include any event that is beyond the control of either party.
Examples of events that may activate a force majeure clause include natural disasters, war, strikes, and civil unrest. It is important to note, however, that the clause only applies to events that are out of the control of both parties, and that it does not cover events that could have been avoided through reasonable steps.
How does a force majeure clause in an employment contract help?
In an employment contract, a force majeure clause helps to protect both the employer and employee. It allows for the delay or suspension of the employment contract in the event of an unforeseeable circumstance. This prevents either party from being penalized if the contract is not fulfilled due to events beyond their control.
For example, if an employee is unable to come into work due to a hurricane, the force majeure clause can be activated to protect the employee from any potential disciplinary action. Similarly, if the employer is unable to provide work due to an unforeseeable event, the employee is protected from any potential breach of contract.
What should be included in a force majeure clause in an employment contract?
When drafting a force majeure clause in an employment contract, it is important to be clear about the circumstances that would activate the clause. It is also important to include clear guidelines on what happens when the clause is activated.
For example, the clause may state that the employment contract is suspended until the unforeseeable circumstance is resolved. Alternatively, it may state that the employment contract is terminated after a certain period of time.
It is also important to include any reporting requirements in the clause. This may include notifying the employer of the unforeseen circumstance as soon as possible.
In conclusion, a force majeure clause is an important part of any employment contract in Malaysia. It protects both the employer and employee from unforeseeable circumstances that may affect the fulfillment of the contract. When drafting a contract, it is important to include a clear and specific force majeure clause that outlines the circumstances that would activate the clause and what happens when it is activated.