An Agreement

Whenever we want to deal something from others, an agreement is the key point to make an exchange/ deal successful. For example, if you want to trade an item A with an item B which belongs to others, u need to wait for both parties agreement before you start to trade. Hence, in order to make the deal more efficient, contracts are held in between the parties. It can be made quite informally as well, oral terms can also be bind with certain condition.

Contract it self means that it is legally enforceable (binding)agreement between two or more competent parties. The most important feature of a contract is that one party makes an offer for an arrangement that another accepts. In order to create a contract, there must be an intention of the parties to enter into legal relations which it is anticipated can be enforced in a court of law. Otherwise, in the eyes of the law, such relationships often do not constitute a binding contract.

Here is one of the case which taken from Malay Mail, entitled "HOTLINE: Hired, but without a contract"on Tuesday, October 27th, 2009.

ANTHONY claims he has been denied money due to him after he resigned as a lorry driver, for a job he took on despite not being issued with an employment contract.

He complained that he earned a limited salary as a lorry driver but the workload is out of expectation, including delivering vegetables and unloading supplies. The manager even paid him due salary, refusing give him overtime allowance. And now, his employer require Anthony to pay for resigning according to Employment Act, in fact, he doesn't even have any official letter offer from employer.
Later, the supply manager admits that there was no offer letter given to the employees as the company is a small scale company. He even complaint that Anthony performance was questionable and does not meet the requirement. He also added that Anthony did not notify them when he quit.

The Labour Department said an officer had advised both parties on the matter. And with no appointment letter issued, the dispute was handled in accordance with the Employment Act.

Since ANTHONY failed to give sufficient notice of resignation to his employer, he was liable to pay his employer an indemnity in lieu of the period of notice due. However, this had become debatable since ANTHONY was not issued with an appointment letter.

Also, the officer said, the employer can be issued with a notice or a compound for not providing its workers with appointment letters.

In my opinion, according to Employment Act 1955,Section 12(2) The length of termination notice shall be the same for both employer and employee and shall be determined by a provision made in writing for such notice in the term of the contract of service, or, in the absence of such provision in writing, shall not be less than:

(a) four weeks' notice if the employee has been so employed for less than two years on the date on which the notice is given;

(b) six weeks' notice if he has been so employed for two years or more but less than five years on such date;

(c ) eight weeks' notice if the has been so employed for five years or more on such date;

provided that this section shall not be taken to prevent either party from waiving his right to a notice under this subsection.

So, Anthony should not just quit the job as he likes. Though there was no legal offer letter to him, he should understand that the manager will surely sue him under the Employment Act, making him to be liable.
On the other hand, the manager should not use the reason of "small scale company" as a reason for not giving out an official letter for the employees to work. Though verbal agreement is able to work, however, when things go wrong, black and white copy is always needed as a reference for evidence.
Besides, the manager should not simply claim that Anthony is not performing good in his job. If the manager did not offer him a contract and state the job specification clearly to him, he has no right to blame that Anthony is not satisfying the manager's expectation.
It really needs a contract to bind the employees in order for them to know what is the Term and Condition applied. Hence, the manager has the power or proof to show the contract which employees signed and it is usable to report them to the labor department if they misbehaved.
After all, documenting the important contract between both parties involved are always necessary for the harmony of a business/dealing/employment.