Is Contract of Service the same as Contract For Service?
No! They are not the same. Read here for the differences.
LABOUR LAW
Cindy Lee Nian Cie
4/26/20251 min read
Contract of Service vs Contract for Service
As a hired person, it is crucial to check your Offer Letter before signing as acceptance of offer. Some people may be confused with Contract of Service ("COS") & Contract for Service ("CFS"). Although they sound similar, they are not the same! Let's explore the differences below:
Protection under the Employment Act 1955
A COS is your employment contract. Without an employment contract, there shall be no employer-employee relationship between you & your boss. If you are employed under COS, then you're an employee as defined under Employment Act 1955. In simple terms, you are protected under the Employment Act 1955.
What does it mean to be protected under the Employment Act 1955? It means you are entitled to the rights under the Employment Act 1955, including payment of wages, paternity & maternity leave, and contribution of EPF & SOCSO.
On the other hand, if you are hired under CFS, you are not an "employee" as defined under the Employment Act 1955. You are considered a "worker", and are not protected under the Employment Act 1955. In simple terms, you are considered to be more of a "part time worker".
Control over the hired person
Under the COS, the employer has a huge control over the employee: including working hours, leave, disciplinary rules.
Under CFS, the hirer has little to no control over the worker. The worker has more independence as compared to an employee.
Payment of wages
Under COS, wages has to be paid regularly.
Under CFS, the worker usually issues invoice before getting payment from the hirer.
EPF & SOCSO
Under COS, it is compulsory for employers to contribute to your EPF & SOCSO. Failure to do so, you have the right as an employee to lodge a report to the Labour Department (Jabatan Tenaga Kerja").
Under CFS, the hirer is not mandated to contribute EPF & SOCSO.
If you are still confused of the differences & need a lawyer to inspect your documents, feel free to contact us for legal advisory.