Secondment Release Letter (Malaysia)
SECONDMENT RELEASE LETTER
Employment Act 1955 (Act 265) | Employees Provident Fund Act 1991 (Act 452)
Date: [Letter Date]
To: [Employee Name] (NRIC/Passport: [Employee IC])
Designation at Host: [Designation At Host]
From: [Home Employer Name] (SSM No. [Home Employer SSM])
Copy to: [Host Organisation Name]
RE: RELEASE FROM SECONDMENT TO [Host Organisation Name]
We write to formally confirm the following in relation to your secondment to [Host Organisation Name].
1. SECONDMENT DETAILS
Your secondment to [Host Organisation Name] commenced on [Secondment Start Date]. The originally agreed end date of the secondment was [Agreed End Date].
2. RELEASE CONFIRMATION
You are hereby formally released from all duties and obligations to [Host Organisation Name] with effect from [Actual Release Date] (the "Release Date"). All property, equipment, and confidential information of [Host Organisation Name] have been returned as itemised below: [Property Returned].
3. CONTINUITY OF SERVICE
The period of your secondment from [Secondment Start Date] to [Actual Release Date] shall count as continuous service with [Home Employer Name] for the purpose of calculating all statutory and contractual entitlements under the Employment Act 1955 (Act 265), the Employment (Termination and Lay-Off Benefits) Regulations 1980, and the Employees Provident Fund Act 1991 (Act 452). Your EPF contributions with KWSP (Kumpulan Wang Simpanan Pekerja) have been maintained throughout the secondment period.
4. RETURN TO DUTY
You are required to report back to [Home Employer Name] in your capacity as [Designation At Home] with effect from [Return To Work Date]. Your terms and conditions of employment with [Home Employer Name] remain as set out in your letter of appointment unless otherwise notified in writing.
5. CONFIDENTIALITY
You remain bound by any confidentiality obligations to [Host Organisation Name] under the secondment agreement and must comply with the Personal Data Protection Act 2010 (Act 709) in handling any personal data accessed during the secondment.
Yours faithfully,
For and on behalf of [Home Employer Name] (Home Employer)
Signature: _______________________________
Name: _______________________________
Designation: _______________________________
Date: _______________________________
ACKNOWLEDGED by [Host Organisation Name] (Host Organisation)
Signature: _______________________________
Name: _______________________________
Date: _______________________________
ACKNOWLEDGED by [Employee Name]
Signature: _______________________________
Date: _______________________________
Home Employer Representative
________________
Signature
Host Organisation Representative
________________
Signature
Employee
________________
Signature
What Is a Secondment Release Letter (Malaysia)?
A Secondment Release Letter in Malaysia sets out the writer's position and the response or action requested from the recipient.
In Malaysia, secondments are common in several sectors: Petroliam Nasional Berhad (PETRONAS) group companies routinely second employees between affiliated entities within the PETRONAS Corporate Structure; government-linked companies (GLCs) under Khazanah Nasional Berhad second senior executives to subsidiaries and investee companies; and multinational corporations (MNCs) registered with the Malaysian Investment Development Authority (MIDA) second expatriate staff from overseas parent companies to Malaysian subsidiaries under employment passes issued by the Immigration Department of Malaysia (Jabatan Imigresen Malaysia) under the Immigration Act 1959/63 (Act 155).
A Secondment Release Letter in Malaysia serves several critical legal and administrative functions. For the employee, the letter confirms continuity of service with the home employer — a key factor in calculating entitlements under the Employment (Termination and Lay-Off Benefits) Regulations 1980, the Employment Act 1955's annual leave and sick leave provisions, and EPF contributions under the Employees Provident Fund Act 1991 (Act 452) credited to the employee's EPF account (Akaun KWSP). For the Inland Revenue Board of Malaysia (LHDN), the release letter helps clarify the tax treatment of employment income during the secondment period and confirms which entity is responsible for remitting Monthly Tax Deduction (PCB) under the Income Tax Act 1967 (Act 53).
Where the secondee is a foreign national on an Employment Pass (category I, II, or III) issued under the Employment Pass Guidelines of the Immigration Department, the Secondment Release Letter may need to be submitted to the Immigration Department alongside the Employment Pass cancellation or transfer application when the secondment ends and the employee leaves Malaysia or transfers to a new employer.
The legal framework governing the Secondment Release Letter (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 Secondment Release Letter (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 Secondment Release Letter (Malaysia)?
A Secondment Release Letter is required in Malaysia whenever a secondment arrangement between a home employer and a host organisation concludes, whether at the end of the agreed secondment term or earlier by mutual agreement.
A Secondment Release Letter is needed when a Malaysian bank or financial institution regulated by Bank Negara Malaysia (BNM) seconds an employee to a subsidiary or joint venture company and the secondment period expires under the terms of the original secondment agreement.
A Secondment Release Letter is required when an employee on secondment to a government agency or statutory body — such as the Securities Commission Malaysia (SC), the Malaysian Communications and Multimedia Commission (MCMC), or Khazanah Nasional Berhad — returns to their home employer in the private sector at the end of the government service secondment.
A Secondment Release Letter is needed when a PETRONAS group company recalls a seconded employee before the agreed end of the secondment term, for example due to a business restructuring or the secondee's promotion requiring relocation to a different entity within the PETRONAS group.
A Secondment Release Letter is required when a foreign national on an Employment Pass category I or II issued by the Immigration Department of Malaysia completes a cross-border secondment from an overseas parent company to a Malaysian subsidiary of a multinational corporation, to confirm the date of the employee's release from Malaysian employment and to support the Employment Pass cancellation application.
A Secondment Release Letter is needed to resolve any ambiguity about which entity — home employer or host employer — is responsible for outstanding leave entitlements, EPF employer contributions (minimum 12% for employees below age 60 in 2024), and SOCSO contributions under the Employees' Social Security Act 1969 (Act 4) during and after the secondment period.
What to Include in Your Secondment Release Letter (Malaysia)
A valid Malaysia Secondment Release Letter must address the following essential elements to provide clear evidence of the termination of the secondment and the employee's reintegration with the home employer.
Parties: Full legal names of the home employer, the host organisation, and the employee (with NRIC/passport number), the employee's designation at the host organisation during the secondment, and the designation to which the employee is returning at the home employer.
Secondment Reference: The date and title of the original secondment agreement or letter, the secondment start date, the agreed end date, and the actual release date — which may differ from the agreed end date if the secondment is terminated early.
Release Confirmation: A clear statement that the employee is formally released from all duties and obligations to the host organisation with effect from the stated release date, and that all property, equipment, access cards, and confidential information of the host organisation have been returned.
Continuity of Service: A statement confirming that the period of secondment shall count as continuous service with the home employer for the purpose of calculating entitlements under the Employment Act 1955, the Employment (Termination and Lay-Off Benefits) Regulations 1980, and EPF contributions under the Employees Provident Fund Act 1991 (Act 452).
Return to Duty: The date on which the employee is expected to report back to the home employer, the designation or role to which the employee is returning, and the applicable terms (whether the same pre-secondment terms apply or new terms are offered).
Handover Obligations: A record of any ongoing responsibilities, client relationships, or projects that the employee will hand over to the host organisation before the release date, to avoid disputes under the host's confidentiality or data protection obligations under the Personal Data Protection Act 2010 (Act 709).
Signatures: Signatures of authorised representatives of both the home employer and the host organisation, with dates in DD/MM/YYYY format, and acknowledgement by the employee.
Additional compliance elements for a Secondment Release Letter (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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Forms Legal. (2026). Secondment Release Letter (Malaysia) (Malaysia) [Legal document template]. Forms Legal. https://forms-legal.com/malaysia/employment/letters/secondment-release-letter-malaysia
"Secondment Release Letter (Malaysia) (Malaysia)." Forms Legal, 2026, https://forms-legal.com/malaysia/employment/letters/secondment-release-letter-malaysia.
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author = {{Forms Legal}},
title = {Secondment Release Letter (Malaysia) (Malaysia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/malaysia/employment/letters/secondment-release-letter-malaysia}},
note = {Free legal document template. Based on Employment Act 1955 (Act 265)}
}Frequently Asked Questions
A properly structured secondment in Malaysia does not break an employee's continuous service with the home employer. Under the Employment Act 1955 (Act 265), continuity of employment is maintained where the employee remains on the home employer's payroll and the secondment is documented as a temporary arrangement with a defined return obligation. The Industrial Court of Malaysia has consistently held — in cases involving GLCs and PETRONAS group entities — that secondments arranged with the employee's written consent and with a formal secondment agreement do not interrupt the employee's service period for the purpose of calculating retrenchment benefits under the Employment (Termination and Lay-Off Benefits) Regulations 1980. EPF contributions under the Employees Provident Fund Act 1991 (Act 452) should continue to be credited to the employee's KWSP account throughout the secondment, with the home employer or host employer making contributions as agreed in the secondment agreement.
The obligation to pay the seconded employee's salary during a Malaysian secondment depends on the terms of the secondment agreement between the home employer and the host organisation. Three common structures are used in Malaysian practice: (1) the home employer continues to pay the employee and recharges the host organisation for the salary cost under a service recharge arrangement; (2) the host organisation pays the employee directly and the home employer suspends salary payments; or (3) the employee receives a dual payment — home employer pays the base salary and the host organisation pays an additional secondment allowance. For income tax purposes under the Income Tax Act 1967 (Act 53), all salary and allowances received during the secondment are taxable Malaysian employment income if the employee is a Malaysian tax resident, and the paying employer is responsible for remitting Monthly Tax Deduction (PCB/MTD) to LHDN.
A Secondment Release Letter for domestic secondments between Malaysian entities does not need to be filed with the Companies Commission of Malaysia (SSM), the Labour Department (Jabatan Tenaga Kerja, JTK), or any other regulatory authority as a standalone document. However, for secondments involving foreign nationals, the release letter is relevant to Employment Pass administration under the Immigration Act 1959/63 (Act 155). When a foreign secondee's Malaysian Employment Pass is cancelled or transferred following the end of the secondment, the Immigration Department of Malaysia requires a supporting letter from the employer confirming the last day of employment in Malaysia. For secondments involving employees in the financial services sector, Bank Negara Malaysia (BNM) may require notification of changes in key personnel positions under the Financial Services Act 2013 (Act 758) or the Islamic Financial Services Act 2013 (Act 759).
Under Malaysian employment law, an employee on secondment is contractually obligated to return to the home employer at the end of the secondment period as specified in the secondment agreement, unless the home employer consents to an extension or the secondment is converted to a permanent transfer. Refusal to return from secondment constitutes a breach of the employment contract with the home employer and may give the home employer grounds for disciplinary action under the employee's terms of employment, including termination for misconduct under Section 14 of the Employment Act 1955 (Act 265) following a domestic inquiry. The host organisation has no authority to extend the secondment without the home employer's written agreement. Where an employee chooses to remain with the host organisation permanently, the proper course is to resign from the home employer and accept a new offer of employment from the host, with appropriate notice under the employment contract.
During a secondment within Malaysia, EPF contributions under the Employees Provident Fund Act 1991 (Act 452) must continue to be made on the employee's wages regardless of whether the home employer or the host organisation is paying the salary. The employer making the salary payment is responsible for deducting the employee's 11% contribution and remitting the total contribution — employee 11% plus employer minimum 12% (for employees below age 60 as at 2024) — to KWSP (Kumpulan Wang Simpanan Pekerja) by the 15th of the following month under Section 43 of the EPF Act 1991. Where the home employer recharges salary costs to the host organisation, the parties must agree in the secondment agreement which entity will be registered as the EPF contributing employer for the secondment period. Failure to make EPF contributions is an offence under Section 48 of the EPF Act 1991, punishable by a fine of not less than RM1,000 and not more than RM10,000 and/or imprisonment.
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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