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guide to employee handbook in malaysia

8 Key Employee Handbook Practices For Malaysian Businesses (Free PDF)

Employee handbooks protect all parties

A company is a breeding ground for conflict, necessitating rules that define acceptable and inappropriate behaviour across all levels of the organisation.

That’s where a well-written employee handbook comes in.

Properly executed, this document sets clear expectations of conduct in various situations relevant to the company, and it’s important to allocate resources to develop a handbook that leaves nothing to chance.

That said, here are eight practices employers in Malaysia must know about employee handbooks.

1. Amend based on Employment Act updates

Although Malaysian Employment law is based on the Employment Act 1955, government policies usually impact these laws, and the employment act is updated very regularly to comply with these policies. It is important for every organisation to stay updated with, and integrate such changes into your employee handbook.

Example of Employment Act updates

As recently as early 2023, there were a series of updates to the Employment Act that included:

  • allowance for employees to apply for flexible work arrangements
  • a reduction in the maximum number of working hours per week
  • restrictions on consecutive work hours
  • increased duration of paid maternity leave
  • for the first time ever, the introduction of paid paternity leave

If your male employees had a baby in 2023, we hope you gave them some paid time off!

2. Don’t copy other company handbooks 

This goes hand-in-hand with using a generic handbook template without customising. While requirements set out in the Employment Act are non-negotiable, companies still have plenty of freedom to set rules for employee conduct and should exercise them.

Examples of handbook policies that should be tailored

  • Filing and handling of complaints
  • Dress code!
  • Phone use during office hours
  • Disciplinary processes
  • Dating and relationships in the office
  • Promotions, training, transfers, and compensation 
  • Applying for leave of absence
  • Termination of employment

Every organisation has a slightly different culture, mission, and values, and copying another company’s handbook just won’t work.

3. Leave room for flexible policies

You’ll notice some policies go through frequent changes, so rather than writing a detailed version in the handbook, include a short clause whereby the handbook cites the most recent addendum as the valid version. 

Common examples include commission schemes and salary increments, but it can apply to any policy in your company requiring frequent updates.

This keeps the employee handbook intact while flexible policies can be amended as needed.

free pdf employee handbook for malaysian sme and hr decision makers

    4. Phase out outdated versions

    You don’t want multiple versions of the employee handbook floating around and accessed through various platforms. This can lead to unnecessary conflict due to one party inadvertently referring to outdated policies. 

    At any one time, the entire company should access just one version of the handbook, that being the most recent. 

    This can be easier said than done, and is closely related to the next two action items.

    5. Develop a communication plan

    Just publishing a handbook update and calling it a day isn’t enough.

    There must be reasonable steps to ensure all employees are:

    1. informed of a new handbook version
    2. informed of updated content
    3. aware of where to access the new handbook
    4. aware of where and how to ask clarifying questions

    Also, be prepared to do all the above and still have employees who are unaware!

    Just as many students only study the night before exams, many employees only read the handbook when the need arises.

    What matters is that when they need it, they can easily find it.

    6. Train your HR team

    In anticipation of clarifying questions from employees, your HR team should be fully trained and knowledgeable on the handbook contents. They will be most employee’s first point of contact and must be able to supply accurate information.

    7. Go with a digital employee handbook 

    Compare a digital and physical employee handbook and the former is far superior, offering the following benefits:

    • no cost needed to print out hundreds of pages
    • far more efficient distribution
    • companies can track if individual employees have read (or claim to have read) key sections
    • updating handbook content is a breeze
    • employees can access the handbook anytime, anywhere
    • employees can quickly and efficiently search for specific sections or information

    One benefit a physical copy offers is it can be placed under a wobbly chair to even out the legs. 

    If your office chairs are already stable, go digital!

    8. Partner with a professional HR consultant

    photo of consultant for hr advisory employee handbook

    In addition to compliance with employment law, handbooks benefit from writing that removes ambiguity and aligns all stakeholders on standard operating procedures across company activities.

    This includes using specific terminology and wording that is easily understood by everyone from employees to managers to Labour Department officials in cases of disputes. 

    For that reason, we strongly urge company decision-makers to engage a professional HR consultant service who can work with you to determine necessary policies, draft the handbook, have it reviewed by a legal team, and plan a sustainable digital distribution system.

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