Effective from Jan 1 2023, the Employment Act 1955 (EA 1955) has incorporated the amendments introduced by the Employment (Amendment) Act 2022.
With that, the EA 1955 has now formally recognised the concept of flexible working arrangement ("FWA") in Malaysia. Section 60P and Section 60Q are the two new sections that provide for FWA in the latest EA 1955.
Section 60P of EA 1955
Subject to the terms in contract of service, Section 60P provides the option for an employee to apply to an employer for a flexible working arrangement to vary any of the three features in relation to the employment:-
i. hours of work;
ii. days of work; or
iii. place of work.
Section 60Q of EA 1955
Section 60Q provides for the application process of FWA as follows:
a) The employee's application for FWA must be in writing 'in the form and manner as may be determined by the Director General'.
b) The employer must approve or refuse the application within 60 days from the date the application is received.
c) The employer must inform the employee in writing of the decision.
d) In the event where an application is refused, the employer must state the ground of such refusal.
Since Section 60P and Section 60Q are new to our EA 1955, we have yet to see the applicability, utility, and effect that these two new sections could bring to the landscape of employment law in Malaysia.
Of particular interest will be how 'Subject to the terms in contract of service', under Section 60P will be interpreted. Most probably, any existing FWA terms in the employment contract will not prejudice the employee from applying for more favourable terms.
Section 60Q does not require the employee to give reasons for the request for FWA. The onus however is upon the employer to give reasons if the application is refused.
Flexible working arrangements have gained increasing popularity in recent years as companies and employees seek ways to adapt to changing work dynamics and lifestyles. These arrangements offer various benefits and drawbacks, impacting both employees and employers.
Advantages:
Improved Work-Life Balance: Flexible working arrangements allow employees to better balance their professional and personal lives. This can lead to reduced stress levels, improved mental well-being, and increased job satisfaction.
Cost Savings: Both employees and employers can benefit from cost savings associated with flexible working arrangements. Employees may save on commuting time and costs, work attire, meals, and the stress of commuting, while employers can reduce expenses related to office space and utilities.
Enhanced Recruitment and Retention: Offering flexible work options can make a company more attractive to job seekers and help retain existing talent. It demonstrates that the organization values work-life balance and trusts its employees to manage their time effectively.
Geographical Flexibility: Remote work options allow companies to hire talent from a wider geographical area, tapping into a more diverse pool of candidates without being limited by location. This can lead to a more diverse and inclusive workforce.
Adaptability to Personal Needs: Flexible working arrangements accommodate employees' personal needs, such as childcare responsibilities, health issues, or pursuing further education. This fosters a supportive work environment and boosts employee morale.
Environmental Benefits: With fewer employees commuting to the office regularly, there's a reduction in carbon emissions and traffic congestion. Flexible working arrangements contribute to sustainability efforts by promoting remote work and reducing the need for daily travel.
Disadvantages:
Communication Challenges: Remote work can lead to communication barriers. Misunderstandings may arise due to reliance on email, chat, or video conferencing, impacting collaboration and productivity.
Loss of Team Cohesion: Remote work can weaken the sense of camaraderie and team spirit that often develops in a traditional office setting. Lack of face-to-face interaction may hinder relationship-building and collaboration among team members.
Isolation and Loneliness: Working remotely for extended periods can lead to feelings of isolation and loneliness, particularly for individuals who thrive on social interaction. This can affect employee morale, mental health, and overall job satisfaction.
Security Risks: Remote work introduces cybersecurity risks, as employees access company systems and sensitive data from various locations. Without proper security measures in place, organisations may be vulnerable to data breaches, phishing attacks, and other cyber threats.
While flexible working arrangements offer numerous advantages such as improved work-life balance, increased productivity, and cost savings, they also present challenges such as communication barriers, and security risks.
Successful implementation requires careful planning, clear communication, and the right technology infrastructure to support remote work effectively.
By addressing these challenges proactively, organisations can harness the benefits of flexible working arrangements while mitigating potential drawbacks.
*The writer is a former chief executive officer of Minority Shareholders Watch Group and has over two decades of experience in the Malaysian capital market.