Apprenticeship Agreement (Malaysia)
APPRENTICESHIP AGREEMENT
Contracts Act 1950 | Pembangunan Sumber Manusia Berhad Act 2001 | National Occupational Skills Standard (NOSS)
This Apprenticeship Agreement is entered into on [Effective Date]
BETWEEN:
(1) [Employer Name] (SSM No. [Employer SSM No.]) of [Employer Address] (hereinafter referred to as the "Employer"); AND
(2) [Apprentice Name] (MyKad No. [Apprentice IC]) of [Apprentice Address] (hereinafter referred to as the "Apprentice").
TVET Institution: [TVET Institution]
1. APPRENTICESHIP PROGRAMME
1.1 The Employer agrees to train the Apprentice in the trade of [Trade Name] under the [Training Framework] framework, commencing [Start Date] and expected to conclude on [End Date].
1.2 The training will combine on-the-job practical training at the Employer's premises with off-the-job theoretical instruction at [TVET Institution].
1.3 The Employer shall provide a structured training plan specifying the competencies to be developed, assessment milestones, and the target qualification.
2. TRAINING ALLOWANCE
2.1 The Employer shall pay the Apprentice a monthly training allowance of [Monthly Allowance], payable on the last working day of each month.
2.2 The Employer shall register the Apprentice with the Employees Provident Fund (EPF) under the EPF Act 1991 and the Social Security Organisation (SOCSO) under the Employees' Social Security Act 1969 if the Apprentice is classified as an employee for contribution purposes.
3. EMPLOYER AND APPRENTICE OBLIGATIONS
3.1 The Employer shall: (a) provide the Apprentice with structured on-the-job training as per the training plan; (b) assign a qualified workplace supervisor; (c) release the Apprentice for off-the-job training sessions at [TVET Institution]; and (d) submit any required HRD Corp grant claims under the Pembangunan Sumber Manusia Berhad Act 2001 on a timely basis.
3.2 The Apprentice shall: (a) attend all on-the-job and off-the-job training sessions diligently; (b) sit for the required skills assessments under the NOSS framework; (c) comply with the Employer's workplace rules and safety requirements; and (d) complete the training bond period specified in Clause 4.
4. TRAINING BOND
4.1 In consideration of the training investment made by the Employer, the Apprentice agrees to remain employed by the Employer for [Training Bond Period] after obtaining the skills qualification.
4.2 If the Apprentice voluntarily resigns or is dismissed for gross misconduct before the training bond period expires, the Employer may recover a proportionate share of documented training costs from the Apprentice, on a pro-rata reducing basis.
5. TERMINATION
5.1 Either party may terminate this Agreement for cause — including persistent absenteeism, assessment failure, or gross misconduct — by giving 2 weeks written notice or payment in lieu thereof.
5.2 Early termination by the Employer for reasons other than cause requires the Employer to compensate the Apprentice for any remaining allowance due for the current training phase.
6. GOVERNING LAW
6.1 This Agreement is governed by the laws of Malaysia, including the Contracts Act 1950 and applicable HRDC regulations.
Employer (Authorised Signatory)
________________
Signature
Apprentice (and Parent/Guardian if under 18)
________________
Signature
What Is a Apprenticeship Agreement (Malaysia)?
An Apprenticeship Agreement in Malaysia sets out the training, supervision, and pay terms governing the trainee's engagement.
HRD Corp — formerly the Human Resources Development Fund (HRDF) — administers the levy collected under the Pembangunan Sumber Manusia Berhad Act 2001 from employers with 10 or more employees in prescribed industries. Employers subject to the HRD Corp levy may claim reimbursement for approved apprenticeship and structured training programmes against their HRD levy contributions, making apprenticeship agreements a practical tool for levy utilisation.
The Department of Skills Development under the Ministry of Human Resources (MOHR) awards the Malaysian Skills Certificate (SKM — Sijil Kemahiran Malaysia) at levels 1 through 3 upon successful completion of competency assessments under the NOSS framework, providing formal recognition for apprentices who complete their training. The Trade Apprentice Act (if re-enacted under the proposed reforms) or the existing contractual framework under the Contracts Act 1950 governs the legal relationship between the employer and apprentice.
An apprentice under a genuine structured training programme is in a different legal position from a regular employee — the apprenticeship is primarily educational in nature, even though the apprentice performs productive work. Where the apprentice receives a training allowance, EPF contributions may or may not be required depending on whether the apprentice is classified as an employee, and employers should seek guidance from the EPF Board on the applicable treatment.
The legal framework governing the Apprenticeship Agreement (Malaysia) in Malaysia draws on several key statutes and regulatory bodies. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Parties executing a Apprenticeship Agreement (Malaysia) in Malaysia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Employment Act 1955 (Act 265) sets the foundational requirements.
When Do You Need a Apprenticeship Agreement (Malaysia)?
A Malaysia Apprenticeship Agreement is required whenever an employer establishes a structured skills training programme for school leavers, young workers, or individuals seeking to acquire a recognised trade qualification.
An Apprenticeship Agreement is needed when a manufacturing company, construction contractor, or engineering firm participates in the National Dual Training System (NDTS) administered by HRD Corp, providing structured on-the-job training combined with off-the-job theoretical instruction at a TVET institution, to document the employer's training obligations and the apprentice's commitment to complete the programme.
An Apprenticeship Agreement is required when an employer is claiming reimbursement from the Pembangunan Sumber Manusia Berhad (HRD Corp) levy fund for an approved training programme, as HRD Corp requires a formal training agreement to process grant claims.
An Apprenticeship Agreement is needed when a skilled trades business — such as an electrical contractor, plumbing company, or automotive service centre — takes on a school leaver for a 12 to 24 month trade apprenticeship leading to a Malaysian Skills Certificate (SKM) awarded by the Department of Skills Development (JPK) under the National Occupational Skills Standard (NOSS).
An Apprenticeship Agreement is required when the employer wishes to document the training obligations and career path for a young worker so that both parties understand the expected progression from apprentice to qualified worker, the skills assessment milestones, and the conditions for early termination of the apprenticeship if the apprentice's progress is unsatisfactory.
Parties in Malaysia should prepare a Apprenticeship Agreement (Malaysia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Apprenticeship Agreement (Malaysia)
A valid Malaysia Apprenticeship Agreement must contain the following essential elements to comply with training programme requirements and protect both employer and apprentice.
Parties: Full legal names of the employer (SSM registration number), the apprentice (MyKad number), and — where the apprentice is under 18 — the signature of the parent or guardian as required by the Contracts Act 1950, which renders contracts with minors voidable.
Apprenticeship programme: Identification of the specific trade or skill being trained, the training framework (e.g., NDTS under HRD Corp, or NOSS/SKM programme under JPK), the level of certification targeted, and the name of the TVET institution providing off-the-job training.
Duration: The start and end date of the apprenticeship, the total training hours, and the proportion of on-the-job to off-the-job training hours.
Allowance: The monthly training allowance in Malaysian Ringgit (MYR/RM), payment date, and any increments tied to skill level progression or assessment milestones.
Training plan: The structured training schedule specifying the competencies to be developed at each stage, the assessor's identity, and the assessment dates for skills certification.
HRD Corp levy claim: Where applicable, confirmation that the employer will submit a grant claim to HRD Corp for the approved training programme and that the apprentice's participation is required to support the claim.
Assessment and certification: The conditions for the apprentice to sit for the Malaysian Skills Certificate (SKM) assessment, the employer's obligation to provide the required supervised practical hours, and the consequences of assessment failure.
Termination: The grounds for early termination — including persistent absence, academic failure, or gross misconduct — the notice period, and any clawback of training costs if the apprentice terminates early without cause.
Additional compliance elements for a Apprenticeship Agreement (Malaysia) used in Malaysia include: Under Malaysian law, the Contracts Act 1950 (Act 136) governs contractual obligations. The Companies Act 2016 (Act 777) regulates corporate entities through the Companies Commission of Malaysia (SSM). The Employment Act 1955 (Act 265) and the Department of Labour govern employment matters. The Personal Data Protection Act 2010 (Act 709) and the Personal Data Protection Department protect personal data. The Inland Revenue Board of Malaysia (LHDN) administers tax obligations. The Industrial Court adjudicates employment disputes under the Industrial Relations Act 1967 (Act 177). Forms-legal.com provides this template as a starting point for Malaysia-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Apprenticeship Agreement (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/employment/contracts/apprenticeship-agreement-malaysia
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author = {{Forms Legal}},
title = {Apprenticeship Agreement (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/employment/contracts/apprenticeship-agreement-malaysia}},
note = {Free legal document template. Based on Employment Act 1955 (Act 265)}
}
Frequently Asked Questions
The National Dual Training System (NDTS), known in Malay as Sistem Latihan Dual Nasional (SLDN), is a structured apprenticeship model in Malaysia modelled on the German dual apprenticeship system. NDTS programmes combine on-the-job training at participating employer workplaces (70–80% of training time) with theoretical instruction at TVET institutions accredited by the Department of Skills Development (JPK) under the Ministry of Human Resources. NDTS programmes lead to the Malaysian Skills Certificate (SKM) at levels 1 to 3 under the National Occupational Skills Standard (NOSS) framework. Employers who participate in NDTS programmes may claim reimbursement from Pembangunan Sumber Manusia Berhad (HRD Corp) under the HRD Corp Skim Bantuan Latihan (SBL-Khas) scheme for eligible training costs, subject to prior HRD Corp approval. Active NDTS sectors include automotive, electrical, welding, construction, ICT, and hospitality.
The application of the Minimum Wages Order 2022 to apprentices in Malaysia depends on whether the apprentice is classified as an employee. Where the apprenticeship is structured primarily as a training programme under the NDTS or JPK framework, and the apprentice receives a training allowance rather than wages for productive work performed, the Minimum Wages Order 2022 may not apply. Employers in doubt should seek guidance from the Department of Labour (JTKSM) or the Ministry of Human Resources. In practice, most Malaysian employers pay apprentices an allowance below the RM1,500 minimum wage during the training period, with the expectation that the apprentice's compensation will increase upon obtaining the SKM qualification and transitioning to regular employment. Apprentices who are in practice performing the same productive work as regular employees with equivalent supervision and control may be entitled to minimum wage treatment.
An employer who has invested substantial resources in structured apprenticeship training — including course fees, assessor costs, and supervisor time — may include a training bond clause in the Apprenticeship Agreement requiring the apprentice to repay a portion of training costs if the apprentice voluntarily terminates the apprenticeship before a specified minimum service period. Malaysian courts will enforce training bond clauses in employment and training agreements under the Contracts Act 1950 provided the repayment obligation is proportionate to the training costs actually incurred and reduces on a pro-rata basis over the bond period. A clause that imposes an excessive penalty unrelated to actual training costs may be struck down under Section 75 of the Contracts Act 1950, which limits contractual penalties to a reasonable pre-estimate of actual loss. Employers should document training expenditure carefully to support any recovery claim.
Employers who participate in NDTS or other HRD Corp-approved training programmes must register the apprenticeship with HRD Corp to be eligible for levy reimbursement under the Pembangunan Sumber Manusia Berhad Act 2001. Registration is done through the HRD Corp online employer portal (e-TRiS system), and approval must be obtained before the training commences. Employers who are not subject to the HRD Corp levy — for example, employers with fewer than 10 employees or employers in sectors excluded from the levy — are not required to register apprenticeships with HRD Corp but may still deliver structured training programmes independently under the Contracts Act 1950 framework. Where the apprentice is enrolled in a JPK-accredited SKM programme, registration of the apprentice with the Department of Skills Development (JPK) is required to enable the apprentice to sit for the national skills assessment.
A Apprenticeship Agreement (Malaysia) does not legally require a lawyer in Malaysia, and individuals and businesses may draft and execute the document independently. The Employment Act 1955 (Act 265) does not mandate legal representation for the creation or signing of this type of document. However, seeking independent legal advice from a qualified Malaysia lawyer is recommended for transactions involving substantial financial value, complex regulatory requirements, or cross-border elements where multiple legal jurisdictions may apply. A lawyer can verify that the document complies with all applicable statutory requirements, identify potential risks specific to the transaction, and confirm that the terms adequately protect the interests of all parties involved. The Federal Court of Malaysia has jurisdiction over disputes arising from this type of document, and Companies Commission of Malaysia (SSM) may impose additional compliance obligations depending on the nature of the underlying transaction. Professional legal review is particularly advisable where the document will be submitted to government agencies or used as evidence in legal proceedings.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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