#Human Resources #Employer

The Effects of Reduced Working Hours

Mohamad Danial bin Ab Khalil
by Mohamad Danial bin Ab Khalil
Aug 13, 2022 at 11:30 PM

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According to unions, despite the upcoming cut in working hours, productivity will not suffer. Malaysian Trades Union Congress (MTUC) president Effendy Abdul Ghani said it would benefit the workers because they could avoid being overworked.

"The decrease also means they have more time to recuperate and generally improve their condition," he added, adding that this would improve their work quality.


Will reduced working hours affect productivity?

Effendy denied assertions that reducing working hours would reduce a company's output, citing Singapore as an example.

"A great example of this is Singapore. Despite having a 44-hour workweek, it has established itself as a regional and international economic powerhouse. As a result, the MTUC supports reducing working hours to protect the welfare of Malaysian workers," he said.

The government has stated that changes to the Employment Act, which would cut weekly working hours from 48 to 45 hours, will go into effect on September 1. The MTUC urged the public to report enterprises that do not follow the new law to the Human Resources Ministry or the Labour Department.

"The companies have been informed of the reduction in working hours, so there should be no problems with implementing it," Effendy added.

N. Gopal Kishnam, general secretary of the National Union of Transport Equipment and Allied Industries Workers, said the decision was laudable and long overdue, noting that other countries had already lowered working hours.

However, he expressed concern that companies would use the bait of overtime to push for working hours that were not specified.


Industries heavily affected by the new rule

Datuk Dr Syed Hussain Syed Husman, head of the Malaysian Employers Federation (MEF), stated that the new legislation would harm enterprises that work around the clock. He noted that these included those in the service and manufacturing industries, such as hotels and resorts, that operate continually.

According to Syed Hussain, the present shift cycle was achievable because the maximum number of hours worked each week was 48.

"With the cut to 45 hours a week, it is no longer feasible to work a full week without being paid for overtime."

Employers will incur an additional expense of at least three hours of overtime if they continue to conduct their business for 48 hours per week as they do now.

"If employers are unwilling to incur the cost of at least three hours of overtime per week or do not have the financial capacity to cover the cost, they must reduce their business hours to 45 hours," he said.

He stated that the new law must be implemented smoothly by holding dialogues between workers and companies. He also advised businesses to adopt new technology in order to modernise their processes and mitigate the impact of the new legislation.


Sustaining efficiency

Zarina Ismail, head of the Malaysian Human Resources Association (Pusma), agreed, saying firms should use automation to sustain efficiency.

"Employers should be prepared to enter IR4.0 (the 4th Industrial Revolution)... to deal with a labour shortage if reduced working hours affect their companies' output," she said.

While reducing working hours might help workers, she stated that certain industries were required to set daily targets, therefore, preparation was needed.

"Businesses are still rebounding from the pandemic, and it is critical for them to have proper financial planning while also complying with the newly amended law," Zarina noted.


Source: The Star