How 5 HR leaders in Malaysia are preparing for the upcoming Employment Act amendments

Enhancing an ombudsman channel dealing with harassment, re-looking at flexible work arrangements, increasing paid maternity and paternity leave days, and more - these leaders give us the run-down.

As we step into the new year, many of us have a list full of resolutions that we would like to work on all throughout 2023.

However, some of these changes may require more effort than others.

With the amendments to Malaysia’s employment act slated to take effect from 1 January 2023, many leaders are preparing for all the work this would entail. With such an important milestone, tackling these changes may be overwhelming for some, while at the same time, a much-welcomed opportunity to enhance their workforce policies.

We've heard from legal experts on what these amendments entail, and now, to get a better insight from the organisations' point-of-view, Human Resources Online asked 11 leaders how they are staying ahead of the changes this coming new year. In this first half of our special feature, five leaders share with Arina Sofiah the steps they and their teams are taking.

Eight core changes by Biomed Global (Malaysia)

As a start, Biomed Global (Malaysia) is focusing on eight core Employment Act changes:

1. EA 1955 now covers all employees irrespective of wages
2. Flexible working arrangements are now provided for in the Act
3. Increased (paid) maternity leave for mothers
4. Increased (paid) paternity leave from the existing policy
5. Medical leave
6. Protection for pregnant mothers against termination
7. Gig workers are now protected
8. Awareness for sexual harassment

Dr. Michael Loo Leap Han, Group Head of Talent Management, Biomed Global, shares more about the group’s short-term and long-term efforts.

To begin with, Biomed has think-tank focus group discussion between the board of directors, functional directors and talent management team on the new amendments and its impact to the human capital cost and business sustainability.

Further, it will conduct basic surveys and data analysis on the number of employees that have direct impact from the new changes — can their job functions distribute among team members? Are temporary/contingency workers needed to cover during their absence?

Biomed will also revisit and update existing contract of employment and employee handbook terms and conditions. Some entitlements and practices may be standardised meeting the new changes.

Dr. Loo also shares more on the employee awareness campaign via townhall and written communication centered around the changes that will look into the following:

1. What changed?
2. How it impacts both employee and employer?
3. What work design we can adopt?
4. What’s next?

Finally, there will be open dialogue sessions (upon request) for employees who need more clarity on the changes, while also designing and introducing new/revised policies and practices.

Long term, functional directors and talent management will study and relook into the new work design and performance tracking metrics with the new flexible working arrangements.

Currently, Biomed has introduced and proposed the following models:

1. Work status
   1. 100% Working in Office
   2. Hybrid (Scheduled WIO and WFH)
   3. Ad-hoc WFH (by application)
2. Work Schedule by staggered hours
   1. 7.30am – 4.30pm
   2. 8am-5pm
   3. 8.30am-5.30pm
   4. 9am-6pm
3. How do we ensure employees are productive? How and what to track their performance?

Biomed will also improve its flexi medical benefits and health plans.

“Flexible benefits package will always deliver more value than a one-size-fits-all solution.

“We maintain the mandatory core benefits and diversify other flexi medical benefits, such as wellbeing, optical, dental, maternity delivery package subsidies, paternity subsidies, and mental health.”

As Dr. Loo believes, introducing flexible benefits can reduce overall company costs — providing benefits they don’t need may end up going to waste. Instead, flexible benefit packages allow employees to choose the benefits that fit their needs.

Lastly, Biomed is looking to diversify its groups of the workforce, and is exploring a gig, freelance, and contractual workforce for a task/project basis.

“We know The Great Resignation will be here for long, and it will be very challenging for us to keep revisiting our retention programmes and initiatives. So, we redirect our recruitment strategy to non-FTE workforce groups.”

The organisation did few pilot studies, and the outcomes were great, he adds. It is currently looking at a 60% FTE and 40% non-FTE workforce approach in the coming years.

According to Dr. Loo, this will help save on human costs, and Biomed can then afford to provide rewards and benefits to the 60% FTE workforce.

Enhancing the established ombudsman channel at Vale

At Vale, the group is adhering to a HR strategy aligns with its purpose and values, while attuning to the evolving needs and realities of its employees and the societies in the countries in which it operates.

Overall, Reena Talla, Regional Head of Human Resources, APACEME, Vale, agrees that Vale views the upcoming changes in the Employment Act positively: “The amendment is progressive, especially as it provides better provision to support women and parents. We support the amendment, and we are revamping our internal processes and policy to ensure full compliance.”

Sharing more on the specifics, Vale has started giving out paternity leave years ago, even prior to any of the amendments.

As Talla believes, “parenting is a shared responsibility between two parents”, and Vale’s policy reflects that. Following the amendment, it has increased the paternity leave accordingly — its maternity leave provision of 120 days, has exceeded the amended provision in the Act (98 days).

Vale also practises zero tolerance to discrimination and harassment, and welcomes the new amendment that provides a more comprehensive protection for employees in this area.

As part of the group’s effort, it is enhancing its established ombudsman channel that deals with harassment, while building a strong internal advocacy towards creating an inclusive and equitable environment for all to thrive and grow in the organisation.

Globally, Vale also embarked on a journey in 2020 to adopt a flexible working arrangement for its employees. As of today, employees who do not work in operational areas are entitled to work remotely permanently, unless required by business needs to work from the company’s physical locations, or ‘hubs’.

“The model has allowed us to attract top-tier talents, who are looking for a working arrangement that is more flexible and agile. It is the way of the future; in tune with the spirit of our cultural transformation globally.”

Managing staff costs from the increase in EA applications at Paramount

While the amendments are good for workers in general and should be lauded, Jeffrey Quah, Group Human Resource Director, Paramount Corporation, recognises that greater care must be taken to ensure the right stakeholders are fully engaged for proper implementation with minimum effect on the various industries.

Nevertheless, at Paramount, the group has been prepared for the amendments, and was ready to roll them out on 1 September 2022 – the initial implementation date.

Its biggest challenge now will be to manage staff costs stemming from the increase in applications of the Employment Act, as more employees will be eligible to claim for overtime payments. This challenge will require the group to look at better planning and efficiency in its business operations to cushion the financial impact of the potential increase in staff costs.

“Aside from this, we will not be taking any additional steps for the other amendments as some of them have already been in place, such as policies on prevention of sexual harassment and paternity leave.”

Eight additional fully-paid weeks of maternity leave at Jotun

Jotun has taken various initiatives in promoting diversity and inclusion over the years, with some of the latest including the launch of the “Penguin Care” programme in September 2022.

According Wytinne Cheng, Regional HR Director, Jotun, the amendments resonate with Jotun — particularly those relating to the inclusion of employees needs and implementing policies that contribute to their health, wellbeing, and work-life balance.

With the introduction of its new global parental leave policy from 1 September 2022, Jotun employees who give birth are entitled to a legal minimum of eight additional fully paid weeks of leave, up to a total of 24 weeks.

“Thus, our female employees in Malaysia have started enjoying 22 weeks of fully paid maternity leaves, beyond the new Employment Act requirements.”

Jotun employees who are fathers to new-borns are also entitled to a minimum of 10 fully-paid working days of paternity leave.

Moving forward, Jotun employees will also enjoy caregiver leaves that allow employees to be able to care for young children, as well as immediate family members who are sick, from 1 January 2023.

“The above changes are very much welcomed by our employees,” Cheng affirms.

Re-looking at flexible working arrangements at Kemaman Bitumen Company

“The key amendments to the Employment Act have affected the investors, industries, and dictate how we run the business,” Haliza Zainal Abidin, Head, Human Resources, Kemaman Bitumen Company (KBC), starts.

“HR practitioners need to be well equipped with the practical implementations so that it complies with the law during its implementation.”

Since the implementation date has been postponed to 1 January 2023, proper planning is needed to ensure the readiness and the smoothness of operations, she points out.

With the many areas covered in the new amendments, the group "has no issue with most of the amendments."

However, Haliza cautions that there may be a few clauses that "need to be scrutinised and applied with workable and tactical strategies in preparation for all employees, including line managers."

In KBC, the most challenged areas that need to be addressed are the minimum weekly working hours, and flexible working arrangements.

Minimum weekly working hours

Weekly working hours have been reduced from 48 to 45 hours.

To some group of employees who worked on a five-day cycle weekly, this is "easily achievable." On the other hand, for employees working on a 12-hour rotation, working four days with the remaining four days off, this does not fulfil the ‘weekly minimum hours’ guideline.

More importantly, the 45 hours weekly are inclusive of break time, Haliza adds.

The tactical strategies, among others,  are to revisit the working pattern, classify employees’ category per the first schedule, and to constitute overtime payment for eligible employees for any additional hours above the limit.

Flexible work arrangements

Although flexible work arrangements (FWA) have already been implemented in some multinational companies, Haliza recognises there are many underlying issues in ensuring the readiness of implementation.

Haliza shares: "On top of the company’s investments in technology and systems that shall enable the smoothness of implementation, tweaking the current work process, revise current policies and procedures and introducing new policies relevant to FWAs is utmost important.

"Clear communication needs to be delivered in expressing the management expectations while implementing FWAs and employees’ obligations. The specific roles, information access level, nature of work, and industry-specific requirements need to be explained further to all employees so that they are self-awareness on their eligibility."

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