Legislation on FWAs in Malaysia

This is because, President Dr Syed Hussain Syed Husman explained, "businesses vary from one industry and sector to another", thus industries themselves should be allowed to determine their processes based on their business requirements.

[This story is updated on 29 June 2022 with more details from MEF's statement.]

Following Deputy Minister of Human Resources Awang Hashim's comment on flexible work arrangements (FWAs), Malaysian Employers Federation's (MEF) President Dr Syed Hussain Syed Husman has suggested that FWAs "should not be dictated to businesses, but let industries themselves determine based on requirements of their business".

Per a report by Bernamathe President said this in a statement on Sunday (26 June 2022)

For context, Minister Awang had earlier reiterated that having FWAs should be allowed for employees as part of the latest amendment to Malaysia's Employment Act 1955, which will come into effect on 1 September. On that note, all FWA applications must be made in writing, and can cover changes in working hours, working days, as well as the place of work.

Once an FWAs application is made, the employer must give an answer to the employee in writing on whether they accept or reject the application within 60 days, and must give reasons if the application was rejected.

According to Bernama's report, President Syed shared his view because "businesses vary from one industry and sector to another", such as manufacturing, banking, tourism & hotels, retail trade, construction, plantation, and more. He further noted that each business is different, and has its unique structures and production needs. "Some are locally based; some are international based and governed by rules & regulations," he added.

"Therefore, one must understand this before seeking to change the existing system of work. It should be recognised that not all businesses change and not all processes can change. The final decision really depends on the industry and conditions of the particular business," he was cited as saying.

Beyond rules & regulations, President Syed also felt that challenges in implementing FWAs could come in the form of top management having a lack of commitment to this work arrangement. As well, employees could develop a lack of engagement that, he believed, might lead to lower productivity, a higher attrition rate, and compromising on confidential data or information.

Some challenges he shared are as follows:

  • Lack of commitment from the top management;
  • Management struggle to adapt to new working models that incorporate FWAs;
  • Lack of engagement among employees that may lead to lower productivity and higher attrition rate;
  • Comprising confidential data and information;
  • Difficulties in ensuring that employees’ remote workspaces comply with OSH Act;
  • Difficulties in cultivating trust between managers and employees;
  • Ensuring that FWAs policy is for all employees (when only certain job functions are allowed to be on FWAs) and
  • Inability to implement fully remote working and FWAs for their employees due to their nature of business such as the hospitality sector and the manufacturing sectors.

Therefore, the President expressed hopes that the Malaysian government would be able to support organisations in adopting and sustaining FWAs by providing clear guidance on the rights and obligations of organisations. It could be as such:

  • Provide clear guideline on the rights and obligations of organisations. That is the decision on employees request for FWAs, any guideline to reject employees’ applications, consequences for employers who fail to comply to the FWAs requests, and the appeal process if applicable;
  • Offer flexibility and relaxing some regulations as appropriate i.e. size (number of employees and nature of business) that may affect its ability of implementing certain types of FWAs;
  • Conduct awareness programmes on FWAs. This is to educate employers on all types of FWAs, and how FWAs can meet their business needs and a strategy to attract and retain talent;
  • Provide concise information and awareness on compliance and governance related to FWAs including safety and health, good practices, work-related accidents that happen when on FWAs, such as working from home and cybersecurity threats;
  • Review existing regulations in Employment Act 1955 as appropriate to accommodate provision of FWs such as in Section 60a on the terms and conditions of the working hours, holidays, rest periods, wages, overtime, to complement FWAs models;
  • Equip HR professionals and Head of Departments with knowledge to develop FWAs policy that defines the FWAs eligibility, expectations, and responsibility, and
  • Introduce tax measures beyond software, but to include purchase of software/ hardware to enable employees to go on FWAs.

In addition, he urged flexibility and the relaxation of certain regulations that may affect an organisation's ability to implement certain types of FWAs.

Also readWorkers in Malaysia and Singapore prefer flexible work arrangements over shorter workweek


Image / MEF LinkedIn

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