FOREWORD
Through the amendments to the Employment Act 1955, effective from January 1, 2023, a new provision regarding Flexible Work Arrangements (FWA) under Sections 60P and 60Q of the Employment Act 1955 has been introduced to enhance the welfare of workers. This provision provides opportunities and space for employees to apply for FWA in line with current developments and technological changes. The main objective of this provision is to improve work-life balance.
INTRODUCTION
The amendments to the Employment Act 1955 [Act 265], effective from January 1, 2023, have introduced Flexible Work Arrangements under Sections 60P and 60Q as follows:
Section 60P
(1) Subject to Part XII or any provision in the service contract, an employee may apply to the employer for a flexible work arrangement to change working hours, working days, or workplace related to their employment.
(2) If there is a collective agreement, any application made by an employee under subsection (1) must be in accordance with the terms and conditions of the collective agreement.
Section 60Q
(1) An employee must apply for a flexible work arrangement under Section 60P in writing and in a form and manner determined by the Director.
(2) After an application is made under subsection (1), the employer must, within 60 days from the date the application is received, approve or reject the application.
(3) The employer must inform the employee in writing of the approval or rejection of the application under subsection (1), and in the case of rejection, the employer must state the reasons for the rejection.
DEFINITION OF FLEXIBLE WORK ARRANGEMENTS
Flexible Work Arrangements (FWA) refer to work arrangements that provide flexibility in terms of working hours, working days, or workplace. FWA allows an employee to apply to their employer to change the existing work arrangement agreed upon in the service contract or collective agreement.
OBJECTIVES
FWA is a government initiative to improve work-life balance in line with the times and technological advancements. FWA also aims to attract and increase the participation of women in the labor market. In addition, FWA can be adapted to help employees with disabilities or reduced abilities to remain employed.
BENEFITS OF IMPLEMENTING FLEXIBLE WORK ARRANGEMENTS
• Improve work-life balance.
• Increase company productivity.
• Increase employee satisfaction and motivation.
• Attract women to enter the labor market.
• Reduce company operating costs.
• Save time and transportation costs for employees.
FORMS OF FLEXIBLE WORK ARRANGEMENTS
There are four forms of FWA that employers can implement:
Flexible Working Hours
Flexible Working Days
Flexible Workplace
Combination of any FWA
Flexible Working Hours
Flexibility in working hours where employees are given the flexibility to choose working hours or rest periods subject to the total working hours per day or week set by the employer.
Example 1
Employees are allowed to start work between 7:00 AM and 10:00 AM and leave between 3:30 PM and 6:30 PM but must fulfill 7.5 working hours per day.
Example 2
Employees are allowed to start work as early as 7:30 AM and leave as late as 9:00 PM but must fulfill 45 working hours per week.
Example 3
Employees can choose flexible break times between 30 minutes and 1 hour. Employees who choose shorter break times, such as 30 minutes, may be allowed to leave 30 minutes earlier.
In implementing flexible working hours, employers are not allowed to:
(i) Require employees to work more than 5 consecutive hours without a break of at least 30 minutes;
(ii) Require employees to work more than 45 hours per week. For shift workers, the average working hours over 3 weeks must not exceed 45 hours per week unless approved by the Director-General;
(iii) Require employees to work more than 12 consecutive hours except in the following circumstances:
(a) An accident, actual or threatened, in or related to the workplace;
(b) Work necessary for the life of the community;
(c) Work necessary for the defense or security of Malaysia;
(d) Urgent work that must be done on machinery or plant;
(e) An interruption of work that cannot be avoided; or
(f) Work that must be done by employees in any enterprise necessary for the economy of Malaysia or any service.
(iv) Set normal daily working hours:
• More than 8 hours per day; or
• More than 9 hours per day if working hours are less than 8 hours per day on any day of the week unless approved by the Director-General.
FLEXIBLE WORKING DAYS
Flexibility in working days where employees are given the flexibility to reduce working days per week subject to the total working hours per day or week set by the employer.
Example 1
Original working hours are from Monday to Friday from 8:00 AM to 5:00 PM and Saturday from 8:00 AM to 1:00 PM. The employer and employee agree to shorten the working week from 6 days to 5 days by extending daily working hours from 8 hours per day to 9 hours per day.
Example 2
The original working week is 6 days from Monday to Saturday. Through FWA, the employer allows employees to choose any working day in the week provided they comply with the total weekly working hours of 45 hours.
In implementing flexible working days, employers are not allowed to require employees to work without giving at least one rest day per week unless approved by the Director-General.
FLEXIBLE WORKPLACE
Employees are allowed to work from home or another location without having to come to the office or only need to come on certain days specified by the employer.
Example 1:
The employer allows employees to work from home from Monday to Friday from 8:00 AM to 6:00 PM.
Example 2:
The employer allows employees to work from home for a week to care for a child who needs to be quarantined due to an infectious disease (e.g., influenza, measles, and hand, foot, and mouth disease).
Example 3:
The employer allows a hybrid work arrangement following the 3+2 model, where employees work in the office for three days and from home for two days.
COMBINATION OF FLEXIBLE WORK ARRANGEMENTS
A combination of any of the above work arrangements according to the employer's operational suitability.
Example 1
The employer allows employees to work from home where employees are required to work 7.5 hours per day with flexible working hours from 6:00 AM to 12:00 PM.
Example 2
The employer allows employees to work from home from Monday to Friday subject to a total working time of 45 hours per week.
Example 3
The employer allows employees to work from home where employees are free to choose any working day in the week subject to 45 working hours per week.
JOBS SUITABLE FOR IMPLEMENTING FWA
Not all types of jobs can practice FWA. Flexible workplace arrangements can only be implemented for jobs that do not require the physical presence of employees, such as graphic designers, customer service officers (call center), drafters, and computer programmers.
On the other hand, jobs that require physical presence, such as production operators, security guards, cleaning workers, and bus drivers, are not suitable for FWA.
IMPLEMENTATION METHODS
PERMANENT
Implementation of FWA on a permanent basis means that the work arrangement is implemented without being subject to a specific period. For example, previously, employees were required to work in the office from 8:00 AM to 4:30 PM. Through FWA, the employer allows employees to work from home permanently.
ROTATIONAL
Implementation of FWA on a rotational basis means that FWA is implemented on a rotating basis among employees. For example, the employer receives FWA applications from employees in the administrative department to work hybrid. The employer allows the employees to work hybrid (two days in the office and three days from home) on a rotation basis where the supervisor must ensure that at least one employee is in the office every working day.
TEMPORARY
Implementation of FWA on a temporary basis means that FWA is implemented by setting a start and end period. For example, an employee applies for FWA to care for their mother who broke her leg in a road accident. The employer allows the employee to work from home for a period of two months.
APPROVAL OF FWA
In granting FWA approval to an employee, the employer may specify the following:
Work monitoring mechanisms, for example, the employer may require employees who are allowed to work from home to submit reports as determined by the employer.
Establish provisions that allow the employer to revoke FWA approval if there is a business need or if the implementation of FWA has affected efficiency, productivity, and teamwork.
Provide new benefits following the implementation of FWA, such as internet allowance, utility allowance, laptop facilities, and telephone.
However, in granting FWA approval, employers are not allowed to specify the following:
Conditions that deny the rights of employees provided under Part XII of Act 265, such as rest days, payment for work on rest days, working hours, overtime pay, holidays, payment for work on holidays, annual leave, sick leave, and paternity leave.
Conditions that conflict with the terms and conditions contained in the collective agreement. For example, the collective agreement stipulates that employees are entitled to a contractual bonus of two months' salary, but the employer sets a condition that employees who are given FWA are not eligible to receive the contractual bonus.
Benefits contained in the existing service contract cannot be reduced or abolished. For example, before the implementation of FWA, the employee received a basic salary of RM3,500 per month, but through the implementation of FWA working from home, the employer reduces the employee's salary to RM3,000 per month. However, the employer and employee can negotiate to reduce or abolish existing benefits that are not relevant when the employee is given FWA, such as parking allowance, transportation allowance, and petrol allowance.
Higher work targets compared to before the implementation of FWA. For example, before the implementation of FWA, the employee was required to audit 10 customer accounts per month, but through the implementation of FWA, the employer sets a requirement for the employee to audit 15 customer accounts per month. However, work targets can be amended if agreed by the employee or if the amendment involves all employees and not just those given FWA.
Any other matters that conflict with labor laws.
APPLICATION PROCEDURES
Employees who wish to apply for FWA must submit a written application to the employer.
The application for flexible work arrangements must state the following:
I. Form of FWA applied for.
(i) Flexible working hours
• Current start and end times and requested working hours; and
• Current break times and requested break times.
(ii) Flexible working days
• Current working days and requested working days.
(iii) Flexible workplace
• Current workplace and requested workplace.
II. Reason or justification and supporting evidence for the application, if any, such as a doctor's certificate.
The employer may determine any appropriate application method for FWA, such as by establishing procedures and application forms.
EMPLOYER RESPONSIBILITIES
When receiving an FWA application, the employer is responsible for:
1. Providing feedback on each application in writing, either approving or rejecting the FWA application. Feedback must be provided within 60 days from the date of receipt of the application.
2. If the employer decides to reject the FWA application, the reasons for rejection must be stated in writing to the employee concerned.
3. Ensuring that there is no form of discrimination in granting FWA approval. If there is any element of discrimination, the employee can file a complaint with the nearest Department of Labour.
In granting FWA approval, the employer must pay attention to the following:
• Specify the period of FWA approval, whether permanent, temporary, or rotational.
• Detail the implementation of FWA, including the conditions to be complied with and the facilities provided (if any).
• Establish appropriate work monitoring and evaluation mechanisms to ensure employee productivity is not affected.
• Keep all records related to FWA applications.
• Ensure that occupational safety and health aspects are fully complied with.
• Establish effective communication between the employer and employee for work monitoring during the implementation of FWA, especially those involving working from home.
• If additional conditions are imposed for FWA approval, the employer must provide a copy of these conditions to the employee.
EMPLOYEE RESPONSIBILITIES
• Comply with all terms and conditions set by the employer in the FWA approval letter.
• Ensure that occupational safety and health aspects are fully complied with if working from home or another location other than the employer's premises.
• Inform the employer if they become aware that they are suffering from a disease, physical or mental disorder that affects their ability to perform their job during the implementation of FWA.
APPEALS
Employers are encouraged to establish an appeal mechanism to allow employees to appeal if their FWA application is rejected.
COMPLAINTS
Employees can file a complaint at:
Jabatan Tenaga Kerja Semenanjung Malaysia if:
a. the employer fails to provide feedback on the FWA application within the specified period (60 days);
b. the employer fails to provide written reasons for rejection; or
c. there is any form of discrimination in granting FWA approval.
Jabatan Perhubungan Perusahaan by the involved trade union representing its members as an industrial dispute under Section 18 of the Industrial Relations Act 1967.
REVOCATION OF FWA APPROVAL
The employer or employee may revoke the approved FWA if the terms regarding the revocation of approval are stated in the approval given.
If these terms are not stated, the approval can only be revoked with the consent of both parties.
DISCLAIMER
The information provided above is a general guideline based on Jabatan Tenaga Kerja Semenanjung Malaysia Kementerian Sumber Manusia recommendations. It is for informational purposes only and does not constitute legal advice. We do not guarantee its accuracy, completeness, or applicability to specific situations. We are not liable for any consequences arising from its use. For legal or compliance matters, please consult a qualified professional.
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