MGCC PERSPECTIVESMAY JUN 2018 27 period of notice This clause is often mistakenly interpreted by employers as an entitlement to terminate the employee as long as they meet the required notice period However the mere absence of a requirement to have just cause and excuse does not mean that employers can terminate employment agreements at will In almost all jurisdictions including Malaysia arbitrary or baseless terminations are in breach of statutory rules and regulations leading to claims for wrongful termination Employers are therefore well advised to clearly communicate their expectations ideally in writing and to discuss and document any shortcomings of their employees Without proper documentation it will be difficult to substantiate the grounds for termination LEGAL INSIGHTS Christina Becht LL M Maastricht works as legal counsel for Luther Corporate Services Sdn Bhd where she is part of the corporate desk team Her email address is christina becht luther services com Ph ot o by 1 23 RF Non competition clause Contrary to many European countries non competition or non solicitation clauses are problematic under common law which still plays a role in many countries world wide including Singapore and Malaysia It is important to understand that such clauses are from the start considered to be a restraint of trade and therefore principally invalid On that basis the clause must be very carefully drafted and clearly delimit to which extent it can be justified and therefore as an exemption be considered as valid As it is a case by case issue each individual contract must be checked when such clauses are involved These clauses should never be used as a template In Conclusion The common mistakes mentioned in this brief article are far from exhaustive At the end of the day what is important for managers and other decision makers is to be aware that standard contracts while often attractive to save time energy and costs should not be used blindly They also require regular updates and depending on the position of the employee may also need some tailoring This is especially true for jurisdictions which are known for their strong employment protection framework

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