December 3, 2022

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What employers should include in a Flexible Working Policy and other recommended documents

Pursuant to alterations contained in the Employment (Amendment) Act 2022 (“the Amendment Act”), which the federal government has declared will appear into pressure on 1 September 2022, staff members in Malaysia will be authorized to implement to their employer for a Versatile Operating Arrangement (“FWA”). (For a additional comprehensive seem at the adjustments underneath the Amendment Act, go through my before article: “Malaysia Employment Act amendments: 7 key improvements for employers to note”)

The introduction of FWAs underneath the Modification Act is the first time that FWAs have been formally recognised in Malaysia, and might be the very first of several this sort of changes — the federal government has also shared that it is conducting studies on the feasibility of a 4-day doing the job 7 days. Malaysian companies can be expecting FWAs to develop into much more commonplace in the close to upcoming, and ought to commence getting ready now. Numerous of my customers are by now putting in location the important flexible performing policies and other associated paperwork to not only make certain that they are not caught unprepared come the 1st of September, but also to lay the foundations for the expected alterations in the up coming pair of several years.

This report sets out the vital details that need to have to be lined in a Flexible Doing the job Policy, and also other advised administrative/HR documents that companies must strongly contemplate placing into position to easily accommodate FWAs.

What the Modification Act states

The foundation of any interior documents and guidelines will have to usually be what is basically mentioned by the legislation. The FWA provisions in the Modification Act are rather very simple. FWAs are delivered beneath the Modification Act by the introduction of a new Portion XIIC.

A new Segment 60P states that an personnel may well apply to an employer for a flexible operating arrangement to change the —

  • several hours of work
  • days of get the job done or
  • put of perform,

in relation to his employment.

The application approach is set out in a new Segment 60Q, which states that:

  • The employee’s flexible working arrangement software should be in creating “and in the kind and way as may possibly be established by the Director General” (for now, no route has been made pertaining to the type/method of the application).
  • The employer must approve or refuse the software in 60 times from the date the software is gained, and tell the personnel in crafting of the choice.
  • If the application is refused, the employer need to point out the floor of such refusal.

As a result, these are the crucial authorized things which have to be lined by any interior insurance policies, and which will then be supplemented by information to handle many other functional things to consider.

Necessary points that need to have to be coated in a Versatile Working Plan

Even after the Amendment Act will come into drive, it is not mandatory for employers to put in position a Adaptable Working Coverage. Having said that, introducing this kind of a policy is a suggested finest practice, as carrying out so will give clarity for the administration and employees on what the employer’s posture is concerning flexible working arrangements. A crystal clear policy also means there will be certainty for all events on how FWA programs will be handled, and the Adaptable Operating Coverage can be supplemented by an interior steering doc for HR/administration.

A Versatile Performing Plan can vary in complexity and size, from as straightforward as a several paragraphs on a one site, to a a lot more in depth coverage. These are a handful of essential troubles which an powerful Adaptable Doing work Coverage really should deal with.

  1. The applicability, scope, and impact of the coverage: It should be crystal clear from the outset which employees the plan applies to. This is notably vital for larger and multi-national organisations which are very likely to engage personnel on a huge array of unique work relationships, like part-time workforce, temp staff, secondees, and interns. The coverage must also point out that though adaptable doing the job preparations are recognised by the company, this does not mean that all purposes for such preparations will be routinely approved, or that staff are contractually entitled to this sort of arrangements.
  2. The diverse varieties of versatile doing the job preparations recognised by the enterprise: When the Amendment Act typically will allow workforce to implement to differ the hours, days, and spot of do the job, an employer can supply far more particulars by means of an inside Versatile Working Plan. For instance, the coverage can determine distinct arrangements these kinds of as temporary FWAs (where staff members can apply for a FWA for a fixed period of 3-6 months), or fastened change FWAs (exactly where staff can pick out possibly to function Monday-Wednesday or Wednesday-Friday). The profit of expressly environment out the unique kinds of “company approved” FWAs is that it gives staff members with crystal clear solutions to opt for from, will allow the enterprise to have some command in excess of the forms of FWA applications that will be submitted, and also sets expectations that FWA apps outdoors individuals possibilities are possible to be turned down.
  3. Any pre-identified ailments or constraints on flexible functioning arrangements: In addition to the unique varieties of FWAs as described in the earlier part, the plan ought to also spell out the disorders or limits on those FWAs. For example, the enterprise may allow an staff to get the job done remotely, but issue to a limitation that the locale will have to be in the very same region or in a certain length from the business, or that the staff should be in a position to be present in the office for a every month in-human being assembly, or be ready to go to conferences at customers’ offices. As one more illustration, the enterprise might allow lowered doing the job hrs matter to a minimum amount quantity of hrs for each week.
  4. Obligations in relation to confidentiality and wellbeing and basic safety: Two major concerns that businesses have when it comes to remote performing are in relation to confidentiality, and health and fitness and security. The Versatile Functioning Coverage should set out the expectations and obligations on staff who are authorized to work remotely. The extent of these obligations will rely on the specific position, data entry level, character of perform, as nicely as marketplace-specific specifications. Some businesses may possibly need significant-degree stability in relation to files or elements to be in place in the employee’s distant workspace. For overall health and security, there should be minimum needs in phrases of products and the situation of the workspace (or the requirement to have a designated workspace), and some businesses may perhaps want to mandate a overall health and basic safety inspection, or a self-evaluation checklist.
  5. Opportunity changes to salary, flexible doing the job allowances, or other added benefits/remuneration: Dependent on the styles of FWAs specified in the policy (see previously mentioned), it may possibly be possible to spell out details of variations to payment as a consequence of an accredited FWA. Alternatively, the policy can usually reveal that certain styles of FWAs will arrive with improvements to salary or advantages — for example, a long lasting reduction in doing the job hours will imply that an employee’s present salary will be minimized, and possibly centered on a fixed system. For multinational businesses, an employee who will be functioning in a distinctive state less than a FWA may possibly have to swap to a various payroll spot and have his/her income localised to his/her new site based mostly on the company’s spend scales in that jurisdiction. The policy can also consist of particulars of any new allowances as a final result of a FWA (for illustration, distant business office machines and set-up allowance), or any current allowances that will no lengthier be payable (for instance, travelling or parking allowances).
  6. The company’s anticipations of staff members below a FWA: A detailed Versatile Functioning Plan need to also briefly set out the company’s expectatations of personnel who have been accepted to do the job beneath a FWA. This really should involve the basics these as that employees with decreased doing work several hours are even now envisioned to entire their important deliverables, show up at all scheduled meetings, and continue on to abide with the company’s procedures and procedures. It can also incorporate details in which related, these kinds of as getting necessary to show up at a bare minimum range of on-site conferences.
  7. The application course of action: A important component of any Flexible Working Coverage will be the software and approval method. In addition to the general applicability/scope area which was stated above, the section detailing the software course of action can set out other eligibility conditions. For case in point, the enterprise may possibly make it apparent that programs from workforce in their probationary time period, or who are at this time going through a PIP, will not be permitted. This area can established out how programs can be submitted (ideally the company will also have a standard FWA application type — see “Other suggested documents” below), and the acceptance system. In which relevant, the plan must also explain that any approval is conditional on the staff signing a Adaptable Doing work Settlement or a supplemental document amending the suitable terms and situations of their existing work contract.

Other advised files

Other than the Versatile Functioning Policy, it is also a advised ideal exercise for employers to have some or all of the subsequent files in put:

  1. Workflow or guideline for HR/management: This is a confidential document for HR/administration-level workers only, and will set out guidance on how to handle apps. This will contain location out the relevant individuals-in-charge for managing, selecting on, and responding to applications, as nicely as the essential criteria and suitable paperwork. This is an significant steering document to be certain that the right process is adopted and the corporation is not exposed to any legal risk.
  2. Template FWA software kind: This standardised application sort will be referred to in the Adaptable Performing Plan, and staff members will be strongly inspired to use this kind when applying for FWAs. Acquiring a template in spot will make sure that all the applicable data is submitted as portion of the software, and also makes it possible for the firm to remind workers of the terms and disorders that will be hooked up to thriving FWA programs. If the Versatile Performing Coverage clearly sets out the different styles of FWAs recognised by the business (see “#2: The various forms of flexible operating arrangements recognised by the company” over), then the software sort can incorporate box-tick possibilities (for example, the staff can utilize for “FWA 4: Change of days of do the job to Wednesday to Friday”).
  3. Template acceptance or rejection letters: Again, owning this standardised document in put will make it simpler for HR/management and assure that the firm is not uncovered to any authorized danger. The typical acceptance letter will listing down all associated paperwork (for example, the FWA Arrangement or compliance checklist) and standardises all required variations to the phrases and disorders of work. The typical rejection letter will include plainly-worded and lawfully-satisfactory causes for rejecting any FWA applications.
  4. Template Adaptable Operating Settlement: The function of this doc is to established out any changes to the current work agreement or terms/disorders of work. Irrespective of whether or not this has to be in the form of a independent agreement, an addendum to the work contract, or a straightforward letter of undertaking by the staff, will count on the extent of the improvements essential.
  5. Compliance checklist for remote doing work arrangements: This is the self-assessment checklist referred to over (see “#4: Obligations in relation to confidentiality and overall health and safety” over) and is a reasonably typical document that employers who have staff members performing remotely ought to now be familiar with.
  6. Template FWA termination letter: This template is to bring any FWAs to an finish if needed. Acquiring this in position will ensure that any authorized variations that have been implemented owing to the change to a FWA will be properly reversed wherever needed.

Benefits of planning a Flexible Doing the job Coverage and the other proposed documents

Though it is not obligatory for employers to have a Flexible Performing Plan or any of the other files recommended in this report, lots of Malaysian employers are previously getting ready these files, and it is a suggested greatest practice with numerous apparent gains:

  • It obviously communicates the employer’s placement on FWAs to staff members, and sets out the employer’s expectations of any staff members who are contemplating FWAs, as perfectly as the repercussions of FWAs this sort of as changes to payment and added benefits.
  • Setting out the styles of FWAs recognised by the employer will aid to streamline the variety of FWAs that staff members will apply for. For businesses with a large workforce, this is vital to guarantee that there are not much too several variants in the type of perform arrangements.
  • The standardisation and streamlining of the procedure will also conserve a lot of time for HR/management and develop more certainty in the system from start out to finish. This enormously reduces exposure to authorized hazard for any prospective missteps.
  • From a useful standpoint, obtaining a crystal clear Flexible Doing work Coverage will also help to make it less difficult to justify any rejections of FWA apps that tumble outside the house the parameters and ailments established out in the coverage.