Outsourcing
There are no specific provisions on outsourcing under Malaysian legislation.
Contracting
In general, Malaysian employment legislation does not apply to true independent contractors (or self-employed persons). Note that tests apply at common law to determine whether or not a person is a contractor or an employee, and the characterisation of the relationship by the parties is not determinative.
The Employment Act provides some rules with reference to contractors, in particular stating that the principal and the contractor and any subcontractor are jointly liable to pay employees (as defined in the Act) of the contractor or the subcontractor the salary for work supplied in the execution of the contract, subject to certain limitations.