Hi guys, just wondering why some of the jobs are contract jobs for 6 months, then will convert to permanent full time job?

Was wondering why they didn't offer permanent full time job at the very beginning?

Is there difference in the benefits such as contract jobs don't have epf and socso? Or any disadvantage in contract jobs?

Thanks for your opinions and explanation ya. 😊

Contract is for a fixed term. Upon expiry, it can be renewed or otherwise.

A contract position can be for a specific job or project. Once is completed, there is no need for the staff anymore.

Probation staff follows the Employment Act / Labour Law and contract staff follows the signed contract.

when is contract job, the employer has the rights not to renew the contract and has no obligation to compensate you if you are terminated....

What is your meaning of 'termination' ?

During contract period or end of contract ?

there should be a clause stating this... it can be during contract or end of contract or at anytime

Technically, they are the same. But then I guess contract means they can pay you higher since once the word "contract" is mentioned, this normally translate to higher pay.

But then technically, they can remove you during probation period when you are in full time.

And I dunno, maybe permanent counts when they decide to retrench you and compensate you.

For permanent stuff, normally you cannot enjoy the benefits until after your probation period.

Also for permanent stuff, normally company have to pay say 1 month salary as compensation to job agent whereelse, for contract, they will pay the job agent each month and the job agent will pay you.

Actually generally contract have epf and sosco.

It really depends on whether you are applying through job agent. I think if you are, if it's contract, you can nego for higher pay first and then say after 6 months, just nego your salary again.

Why would you want a "permanent job" from the beginning when they can remove you in the probation period anyways and you are not even entitled for the priviledges.

In many ways, contract have advantages since you can nego a higher salary at the start anyways.

If is during anytime, meaning employee can also terminate without paying compensation ?

This post has been edited by mini orchard: Mar 15 2022, 06:40 PM

Yes, the company doesn't have to contribute to the EPF, Socso or pay your PCB. You would need to do that all on your own when you are a contract staff (unless stated). Also there are different ways how it is set up. First, it is a direct contract between you and the contracting company. Another alternative is via a contracting agency where the contracting agency will assist you as well but you might get less overall as you have to pay the contracting agency a certain fee.

Do note that usual employee benefit normally does NOT cover contract staff. So when you are sick, basically that means you don't get paid.

ha... thats why u have to read the contract... in normal situation it sides employer side...

Some companies will renew the contract indefinitely meaning you'll never be a permanent staff.

Differences
In contract you do the admin of your salary yourself, your own taxes, epf, socso, etc. If you don't, LHDN will come after you.

You cannot reclaim business costs. Everything to perform the business is on you. That means your own tools, laptop, etc. All the cost to do the business is on you.

You have to budget salary for the time you won't have work after the contract ends before the next employment opportunity.

You get no sick leaves, holidays. If you don't work you get less pay if say you take a sick leave.

You do not qualify for loans under contract work.

Contract opportunities give recruiters more profit than full time employment that is why you see a lot more contract offers, and many of them pay the same as full time so it means you are earning half full time if you take it.

This is why, if they don't offer at least double for contract compared to full time, don't bother. Companies take contracts, not people.

Working for grab is an example of a freelance/contract work. Do you like it? if not don't bother.

Your insurance premiums will be high.

Germans love to use subcontraction. I boycott apple due to labour treatment that they turn a blind eye by using 3rd party. German companies love to do the same, a few years ago it came to light that many german factories were abusing workers via subcontractception, and most of these workers were from 3rd world european countries. German car companies d othe same even in malaysia. Want to work for mercedes as a core software developer? Its 1 year on contract, then 6 months on probation. This here is abuse as the core team is a permanent team not a temporary thing, you either hire full time internally, or fully contract the work to a 3rd party company. I always recommended people to boycott german cars since they were expensive, provided bad service, didn't last, you didn't get what you pay for, and now to add to the list, labour abuse. mercedes hire malaysians under this same abusive manner, and yet malaysians still buy mercs and still think highly of it. Heck we even have a culture of being successfull owning a mercedes. To me, if you own a mercedes you are a failure. If you own a perodua or toyota, i'd respect you more. owning brands like GM and new hondas will also lose my respect.

So no i'm against contract work 90% of the time unless they can pay appropriately.

Ok I got it.

Actually, for me, contract is similar to full term but then in most cases, I guess I am actually working for the contracting company that sub my services to the main company.

I do get the benefits mentioned.

Actually full time employment is more profitable because when the companies hire full time, they have to pay 1.5 months to the recruiter whereelse for contract, they pay say 10% of the salary to the recruiter.

For me, contract and full time, there is very little difference. Most of the time, for contract, you can negotiate a much higher salary. And you still get the opportunity to join as full time when your contract is over.

Actually, on the contary, I see people offering full time but pushing your salary down because of that.

This post has been edited by BrookLes: Mar 24 2022, 11:33 AM

Great. It means you also get that high salary permanently.

if only it were that simple. Grab is an example. Take away all the cost of operation and your salary is actually very low. In full time, the company pays for cost of operation.

I was not in grab. And I can say everytime I go for contract, my salary jumps which I can use for leverage for my next job.

I would say, if you can go for jobs that can be contracted go for it . Even better if you can manage to bypass the recruitment agency.

Companies leverage on the fact that permanent is "better" and undercut you.

The only advantage I can see of doing permanent is, maybe free doctor visits and mc which I do not utilize unless I dun feel like going to work.

Heck, if I can convert my current position to Contract and get 20k instead of 15, I will do that. Instead of paying sosco, epf and income tax, they can pay directly to me. And they can pay me extra for other misc charges etc.

Why get a permanent title and have to slog off for the rest of my life.

This post has been edited by BrookLes: Mar 24 2022, 09:52 PM

Actually one thing I really like about contract is, like one person said. You manage everything. I am talking about an actual contract position whereby you are another business entity. If you are confident about your abilities and you are young, you should go for contract because it's an opportunity for you to be your own boss by actually offering your services.

If you are not really confident about your abilities and maybe you want an easier life, maybe you should go for permanent because it's hard for the company to get rid of you if you play your politics right. but then like i said, you cannot play much politics during your probation period and you still have to perform during your probation period.

For contract, your actual contribution really matter since that's what they are paying you for and you have more pressure to perform. But then if you really get to manage everything by yourself, you can even save so much money and actually earn more. For example tax returns, you can actually manage your tax returns in a way whereby you can pay less tax. Whereelse permanent there is very little you can do.

Many companies will not pay anything more than what is stated in the contract, and like juniper would rather break the contract and fire you during any changes. The law protects employees better.

Then thats good for you. Not everyone can do their taxes right and some govs will question you if you do it yourself rather than some company.

The issue i have with contract is simply down to how companies will try to mistreat and undercut everything they can. A lot of contracts i find are offered close to employee, and because the cost is borne by you, can cheap out there. If they did this with employee its a lawsuit waiting to happen because then they too must provide the tools. Not every job has a low overhead and grab is an example as your car does take quite a bit to operate. So a taxi driver loses half on contract just to costs. This is the point i am trying to make, is that you bare the costs and admin of everything.

The other important point to know is that, under a contract, getting any tax agency even LHDN or IRS to refund your costs back can be absolutely terrifying from requiring audits to having to pay people to audit you or just being a complete arse about refunds, because a company pays their income taxes on nett profit, thats profit after all the costs and salaries have been paid, while you getting a pay pay your taxes on your salary, not your nett. Meaning you pay your taxes irregardless of your costs. This is one reason i do not like contracts as an individual.

Lets not forget, germany abused the contract laws, allowing them to mistreat workers using contracts (oh some other person is gonna handle their logistics attitude). Laws better protect employees and banks consider your financials based on permanent employment better than contract even if you are lower paid. So before you consider a contract position, consider the overheads you will have to face, are they more or less than salary after taxes?