SYDNEY (AFP) - The Australian arm of Richard Branson's Virgin Airlines has cancelled a staff travel agreement with Brunei's national carrier in response to the Asian nation's adoption of syariah law, including the death penalty for gay sex, the airline said on Thursday (April 4).

The agreement allowed Virgin staff to book discounted tickets on Royal Brunei flights for leisure travel.

The company, Australia's second-biggest airline after Qantas, sent an e-mail to employees explaining that the new syariah code, which came into effect on Wednesday, applies to Muslims, non-Muslims and foreigners "even when transiting on Brunei-registered aircraft and vessels".

"Given the harsh (including death) penalties being introduced for activity that is legal and acceptable in Australia, the myID (staff travel) agreement between Virgin Australia and Royal Brunei has now been terminated effective immediately," said the e-mail, a copy of which was made available to AFP.

A separate agreement that allows Royal Brunei to sell seats available on Virgin Australia flights within Australia remains in place, the spokesman said.

Qantas, whose chief executive officer Alan Joyce is one of Australia's most high-profile openly gay business leaders, declined to comment on whether it was reviewing its staff travel deal with Royal Brunei.

The tough syariah penal code in the tiny country on tropical Borneo island - ruled by the all-powerful Sultan Hassanal Bolkiah - came into force on Wednesday, following years of delays.

The laws, including death by stoning for adultery and gay sex, make Brunei the first place in East or South-east Asia to have a syariah penal code at a national level, joining several mostly Middle Eastern countries such as Saudi Arabia.

The decision to push ahead with the punishments has sparked alarm around the world, with the United Nations labelling them a "clear violation" of human rights, and celebrities, led by actor George Clooney and pop star Elton John, calling for Brunei-owned hotels to be boycotted.