Malaysia: Introduction of the Flexible Working Arrangement Guidelines

The concept of Flexible Working Arrangements (FWA) has gained significant traction in Malaysia post COVID-19, to the extent that the Malaysian government introduced FWA under the amendments of the Employment Act 1955 (EA). Under Sections 60P and 60Q of the EA, FWAs are now officially recognized, providing a legal framework for their implementation.

An application for FWA shall be submitte in writing, and the employer shall, within 60 days from the date of receipt of such application, approve or reject the application in writing. In case of rejection, the employer shall provide the reasons for his decision. Applications must be formulated in a non-discriminatory manner.

The Ministry of Human Resources has published the Guidelines for Implementation of Flexible Work Arrangement (Guidelines) on December, 5 2024.

The Guidelines refer to four types of FWA, defining FWA as flexibility in terms of working hours, days of work or place of work and providing the following examples:

Flexible working hours:

Employees may have the flexibility to start their workday at any time between 7:00 a.m. and 10:00 a.m., and finish between 3:30 p.m. and 6:30 p.m., as long as they complete 7.5 hours of work each day;
Employees may be allowed to start and end their workday at different times, such as between 7:30 a.m. and 9:00 p.m., provided they meet the required working hours;
Employees may choose to take a 30-minute break instead of one hour, allowing them to finish work 30 minutes earlier.

Flexible working days:

An employee who typically works 6 days a week may be allowed to work only 5 days per week, provided that each workday does not exceed 9 hours and the total weekly hours do not exceed 45 hours;
An employee may have the flexibility to choose their workdays within a week, as long as they meet the required weekly hours and have at least one rest day each week;

Flexible place of work:

An employee may be allowed to work from home Monday through Friday, from 8:00 a.m. to 6:00 p.m.;
An employee may be permitted to work from home for a month to care for an unwell child;
An employee may have the option to work in a hybrid arrangement, working on-site for 3 days and from home for 2 days each week;

Any combination of the above:

An employee may have the flexibility to work from home at any time between 6:00 a.m. and 12:00 a.m., as long as they complete their required working hours;
An employee may be allowed to choose their work-from-home days, provided they work a total of 45 hours per week;
An employee may be permitted to work from home whereby the employee is free to choose their working days in a week subject to a 45 hours per week.

However, it is important to highlight that the Guidelines recognise that not all job roles are suitable for FWA, and cites production operators, security personnel, janitorial and sanitation workers, and bus drivers as examples.

The FWA can be implemented in the following manners:

Permanently – the arrangement is open ended:
Temporarily – the arrangement is for a defined period only; and
Rotationally - the arrangement is carried on a rotational basis among employees.

It is pertinent to keep in mind by implementing the FWA, employers are not allowed to:

deny statutory entitlements such as rest days, rest day pay, overtime pay, annual leave, sick leave or paternity leave;
reduce or abolish existing compensation or benefit contractually agreed except for benefits that are no longer relevant when an employee is granted FWA such as parking allowance;
increase targets; and
anything contrary to labour laws.

Employers only have the right to revoke the FWA if this is stated in the FWA approval. In the event it is not stated in the FWA approval, revocation is only permitted if both parties consent.

Employers are encouraged to have an appeal mechanism for employees to appeal in the event the FWA application is denied.

Failure of the employer to respond within 60 days after an application for FWA is submitted or failure to provide the reason for rejectionl or any existence of discrimination in the consideration of the FWA application allows an employee to lodge a complaint with the nearest Labour Department.

Conclusion

FWA represent a significant shift in the traditional work model, offering numerous benefits for both employers and employees. By understanding and implementing the Guidelines, Malaysian companies can create a more adaptable and productive work environment. As the workforce continues to evolve, FWAs will play a crucial role in shaping the future of work in Malaysia.