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

Pursuant to changes contained in the Employment (Modification) Act 2022 (“the Modification Act”), which the govt has declared will come into power on 1 September 2022, personnel in Malaysia will be authorized to use to their employer for a Versatile Functioning Arrangement (“FWA”). (For a a lot more complete glimpse at the adjustments under the Modification Act, examine my previously posting: “Malaysia Work Act amendments: 7 important variations for employers to note”)

The introduction of FWAs less than the Amendment Act is the first time that FWAs have been formally recognised in Malaysia, and could be the first of many these types of adjustments — the authorities has also shared that it is conducting scientific tests on the feasibility of a four-working day operating 7 days. Malaysian businesses can assume FWAs to grow to be extra commonplace in the near upcoming, and must start making ready now. Several of my clientele are by now placing in area the necessary flexible doing the job guidelines and other connected files to not only ensure that they are not caught unprepared occur the 1st of September, but also to lay the foundations for the expected adjustments in the subsequent few of several years.

This article sets out the crucial factors that require to be covered in a Adaptable Doing the job Coverage, and also other proposed administrative/HR paperwork that businesses should strongly think about placing into spot to efficiently accommodate FWAs.

What the Amendment Act says

The basis of any internal paperwork and guidelines must usually be what is in fact mentioned by the legislation. The FWA provisions in the Amendment Act are pretty easy. FWAs are provided less than the Modification Act by the introduction of a new Portion XIIC.

A new Segment 60P states that an personnel may well implement to an employer for a flexible functioning arrangement to differ the —

  • several hours of operate
  • days of work or
  • position of work,

in relation to his work.

The software procedure is established out in a new Part 60Q, which states that:

  • The employee’s adaptable performing arrangement application must be in creating “and in the form and manner as may possibly be decided by the Director General” (for now, no course has been manufactured about the kind/way of the application).
  • The employer need to approve or refuse the software within 60 times from the date the application is been given, and notify the employee in writing of the choice.
  • If the application is refused, the employer need to point out the floor of this kind of refusal.

For that reason, these are the critical legal components which must be lined by any interior insurance policies, and which will then be supplemented by content to handle numerous other practical concerns.

Crucial factors that want to be lined in a Versatile Functioning Policy

Even right after the Modification Act arrives into drive, it is not mandatory for companies to set in place a Adaptable Performing Policy. Having said that, introducing these a coverage is a advisable greatest practice, as carrying out so will supply clarity for the management and employees on what the employer’s situation is regarding versatile doing work arrangements. A crystal clear plan also usually means there will be certainty for all events on how FWA purposes will be dealt with, and the Versatile Working Policy can be supplemented by an internal guidance doc for HR/management.

A Flexible Functioning Coverage can range in complexity and length, from as very simple as a couple of paragraphs on a single site, to a significantly extra thorough coverage. These are a couple vital challenges which an helpful Flexible Working Plan ought to handle.

  1. The applicability, scope, and result of the coverage: It should be crystal clear from the outset which workers the coverage applies to. This is particularly vital for bigger and multi-countrywide organisations which are very likely to interact employees on a extensive array of different employment relationships, together with aspect-time staff members, temp staff, secondees, and interns. The plan must also state that when versatile working arrangements are recognised by the enterprise, this does not necessarily mean that all applications for such arrangements will be automatically authorized, or that workforce are contractually entitled to these arrangements.
  2. The distinctive sorts of flexible doing work preparations recognised by the firm: Whilst the Modification Act normally permits employees to utilize to fluctuate the hrs, days, and place of do the job, an employer can deliver far more details by an inside Versatile Performing Policy. For illustration, the coverage can define distinct arrangements such as temporary FWAs (wherever staff members can apply for a FWA for a fixed period of 3-6 months), or fixed shift FWAs (exactly where workers can pick possibly to function Monday-Wednesday or Wednesday-Friday). The reward of expressly setting out the different styles of “company approved” FWAs is that it provides employees with distinct choices to opt for from, will allow the corporation to have some manage more than the forms of FWA programs that will be submitted, and also sets expectations that FWA programs outside people choices are most likely to be rejected.
  3. Any pre-established conditions or limitations on adaptable operating preparations: In addition to the specific varieties of FWAs as talked about in the prior segment, the policy must also spell out the circumstances or constraints on those FWAs. For instance, the business could enable an employee to operate remotely, but issue to a limitation that the place have to be in the very same state or within just a precise length from the office, or that the staff need to be in a position to be existing in the business for a month to month in-human being meeting, or be ready to attend meetings at customers’ workplaces. As yet another case in point, the corporation could allow diminished doing the job hours subject to a minimal range of hrs per week.
  4. Obligations in relation to confidentiality and overall health and security: Two main fears that businesses have when it will come to distant doing work are in relation to confidentiality, and well being and protection. The Versatile Operating Policy really should set out the anticipations and obligations on employees who are allowed to get the job done remotely. The extent of these obligations will depend on the particular role, details access degree, character of function, as well as sector-unique prerequisites. Some businesses might involve substantial-level security in relation to files or supplies to be in area in the employee’s remote workspace. For health and fitness and protection, there should be least requirements in conditions of machines and the issue of the workspace (or the need to have a designated workspace), and some employers may want to mandate a well being and safety inspection, or a self-assessment checklist.
  5. Prospective variations to wage, adaptable functioning allowances, or other rewards/remuneration: Relying on the types of FWAs specified in the plan (see previously mentioned), it may perhaps be doable to spell out particulars of alterations to compensation as a end result of an permitted FWA. Alternatively, the coverage can frequently describe that certain forms of FWAs will occur with adjustments to wage or advantages — for illustration, a lasting reduction in working hours will necessarily mean that an employee’s current income will be minimized, and maybe dependent on a set components. For multinational companies, an personnel who will be operating in a distinctive country under a FWA may perhaps have to switch to a different payroll spot and have his/her income localised to his/her new site primarily based on the company’s spend scales in that jurisdiction. The plan can also include particulars of any new allowances as a end result of a FWA (for instance, distant office environment products and set-up allowance), or any current allowances that will no lengthier be payable (for example, travelling or parking allowances).
  6. The company’s expectations of personnel beneath a FWA: A in depth Adaptable Functioning Coverage should really also briefly established out the company’s expectatations of staff who have been permitted to perform below a FWA. This ought to incorporate the essentials these types of as that workforce with diminished doing the job several hours are continue to predicted to entire their essential deliverables, show up at all scheduled meetings, and continue on to abide with the company’s procedures and insurance policies. It can also contain particulars where appropriate, these as staying expected to go to a least range of on-website meetings.
  7. The application approach: A essential component of any Adaptable Working Coverage will be the software and approval course of action. In addition to the typical applicability/scope section which was talked about over, the section detailing the application system can set out other eligibility conditions. For example, the firm may make it very clear that programs from workforce in their probationary time period, or who are at the moment going through a PIP, will not be permitted. This section can established out how programs can be submitted (ideally the corporation will also have a standard FWA application variety — see “Other suggested documents” under), and the acceptance process. Where by appropriate, the plan should really also describe that any acceptance is conditional on the employee signing a Flexible Functioning Agreement or a supplemental document amending the pertinent terms and disorders of their existing employment contract.

Other advisable files

Moreover the Adaptable Operating Plan, it is also a recommended best exercise for businesses to have some or all of the following paperwork in location:

  1. Workflow or guideline for HR/management: This is a private doc for HR/administration-stage personnel only, and will established out guidance on how to deal with purposes. This will consist of placing out the pertinent individuals-in-charge for dealing with, deciding on, and responding to applications, as properly as the key criteria and related documents. This is an crucial guidance document to assure that the suitable procedure is followed and the business is not exposed to any authorized hazard.
  2. Template FWA software kind: This standardised application sort will be referred to in the Versatile Functioning Plan, and employees will be strongly encouraged to use this variety when making use of for FWAs. Getting a template in spot will ensure that all the applicable information is submitted as portion of the application, and also makes it possible for the corporation to remind personnel of the phrases and conditions that will be attached to thriving FWA apps. If the Adaptable Doing work Plan clearly sets out the distinct forms of FWAs recognised by the enterprise (see “#2: The diverse varieties of flexible operating preparations recognised by the company” earlier mentioned), then the application kind can incorporate box-tick possibilities (for illustration, the worker can utilize for “FWA 4: Alter of days of work to Wednesday to Friday”).
  3. Template acceptance or rejection letters: Yet again, possessing this standardised document in spot will make it simpler for HR/administration and guarantee that the corporation is not uncovered to any lawful threat. The common acceptance letter will list down all related paperwork (for example, the FWA Settlement or compliance checklist) and standardises all demanded improvements to the conditions and disorders of employment. The conventional rejection letter will comprise clearly-worded and legally-appropriate good reasons for rejecting any FWA programs.
  4. Template Versatile Working Agreement: The function of this doc is to set out any changes to the current work contract or phrases/circumstances of work. Irrespective of whether or not this has to be in the kind of a separate deal, an addendum to the employment deal, or a very simple letter of endeavor by the employee, will depend on the extent of the variations essential.
  5. Compliance checklist for distant operating preparations: This is the self-assessment checklist referred to above (see “#4: Obligations in relation to confidentiality and wellness and safety” higher than) and is a rather conventional doc that businesses who have personnel performing remotely need to previously be common with.
  6. Template FWA termination letter: This template is to convey any FWAs to an close if essential. Acquiring this in area will be certain that any authorized variations that ended up executed owing to the change to a FWA will be properly reversed where by important.

Gains of planning a Adaptable Working Policy and the other encouraged documents

While it is not necessary for companies to have a Flexible Doing work Plan or any of the other paperwork advisable in this report, lots of Malaysian employers are currently planning these files, and it is a encouraged very best follow with quite a few distinct rewards:

  • It evidently communicates the employer’s place on FWAs to staff members, and sets out the employer’s expectations of any employees who are taking into consideration FWAs, as properly as the repercussions of FWAs these as variations to compensation and benefits.
  • Location out the varieties of FWAs recognised by the employer will enable to streamline the variety of FWAs that workers will use for. For companies with a big workforce, this is critical to guarantee that there are not far too quite a few variations in the kind of get the job done arrangements.
  • The standardisation and streamlining of the method will also help save a great deal of time for HR/administration and develop much more certainty in the procedure from start out to end. This tremendously lowers publicity to authorized danger for any likely missteps.
  • From a realistic standpoint, having a distinct Versatile Functioning Policy will also assist to make it much easier to justify any rejections of FWA applications that slide outside the parameters and ailments established out in the policy.