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The New Provisions for Flexible Working Arrangement in the Employment Act 1955

Effective from 1st January 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 modern concept of flexible working arrangement (“FWA”) in Malaysia, or some may call it as ‘work from home’ (“WFH”).

Section 60P and Section 60Q are the 2 new sections that provide for FWA in the latest EA 1955.

(i) Section 60P of EA 1955

Subject to the terms in contract of service, Section 60P provides the option for employee to apply to employer for a flexible working arrangement to vary any of the 3 features in relation to the employment:-

  • i. hours of work;
  • ii. days of work; or
  • iii. place of work.

(ii) Section 60Q of EA 1955

On the other hand, 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) If the event where an application is refused, the employer must state the ground of such refusal.

Highlights and comments

1. Firstly, it is important to note that the new Section 60P is not all-encompassing but is still subject to the overall terms and conditions of an employment contract.

2.The wordings of the said Section 60P cannot be confused or be deemed to have accorded FWA or WFH as a fundamental right to employees. It is a new trend, not a right.

3. Be that as it may, in the absence of any employment term that expressly forbids any form of FWA or WFH, an employee is always entitled to make such an application under Section 60P should the circumstances genuinely necessitate or call for such an arrangement.

4. In the case where an employment contract and/or the company policy has already provided schemes for FWA or WFH, the employee should then follow the procedures, terms and conditions as stated when making an application for FWA or WFH.

5. At the present, the Director General has yet to issue any direction as to the form or manner of an application under Section 60P. Surely enough, it is best for an employee to state the proposed change to the existing working arrangement together with reasons or supporting grounds for the employer’s consideration.

6. It will be interesting to learn how would the Courts interpret the 2 new sections in the context involving a complaint lodged by an employee against an employer where an application under Section 60P has been refused without any reasonable ground or any ground at all.

7. On the same note, what if an employee who is rightfully entitled to a scheme of FWA or WFH under his or her employment contract and/or the existing company’s policy but is subsequently refused or rejected by the employer? Would such a refusal or rejection by the employer be recognized as a type of breach going to the root of the employment contract that could justify a case of constructive dismissal by the employee?

8. Since Section 60P and Section 60Q are new to our EA 1955, we have yet to see the applicability, utility and effect that these 2 new sections could bring to the landscape of employment law in Malaysia.

9. All in all, it is highly recommended for employers who wish to implement schemes of FWA or WFH to first set out clear guidelines, rules and/or regulations prior to introducing the flexible alternatives to employees.

10. An effective FWA or WFH policy should address or cover most of the following key items:-

  • i. Stating the aim, scope, applicability and effect of the policy;
  • ii. Identifying the different or specific type of flexible working arrangements;
  • iii. Setting out the application process;
  • iv. Pre-conditions or limitations on flexible working arrangements;
  • v. The company’s expectation of the employees under the scheme of FWA or WFH;
  • vi. Risk management, confidentiality and data protection;
  • vii. Manner of supervision or reviewing of work progress and performance.

This article is intended to be informative and not intended to be nor should be relied upon as a substitute for legal or any other professional advice.

About the Author
Chau Yen Shen
Senior Associate
Dispute Resolution
Halim Hong & Quek

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