Legal Position under Industrial and Employment Law in respect of the Movement Control Order.
The Movement Control Order (MCO) has been announced by The Prime Minister on 16 March 2020 starting from 18 March 2020 until 31 March 2020. As of 25 March 2020, Malaysia has 1,796 confirmed cases of COVID-19, thus The Prime Minister has extended the duration of the Movement Control Order (MCO) for a further period from 1 April 2020 to 14 April 2020.
The Movement Control Order (MCO) is implemented to curb the further outbreak of COVID-19 in Malaysia. Many organization and businesses have been affected during this period. It disrupts the business, shrinks the bank account and countless workers may lose their jobs.
Here are the guidelines that may assist employment sector in view of legal issues faced during the Movement Control Order (MCO):-
• Employers are obligated to pay full salary during Movement Control Order (MCO) period.
• Employers who face financial difficulties in paying full salary may obtain workers’ consent to pay less during the Movement Control Order (MCO) period to avoid the need for termination.
• Employers are not allowed to force workers to use their annual leave or unpaid leave during this period, as the movement restriction was made under the Prevention and Control of Infectious Disease Act 1988.
• Any organisations or businesses that are not providing essential services may continue operations and open premises provided that the owner or occupier of the premises obtains the prior written approval from Director General of Health.
• Any organisations or business those involved in essential services (Water, electricity, energy, telecommunications, post, transportation, irrigation, oil, gas fuel, lubricants, broadcasting, finance, banking, health, pharmacy, fire prevention, prisons, ports, airports, security, defense, cleaning, food supply & retail) may continue operations and open premises, and employee must attend to work under the Prevention and Control of Infectious Diseases (Measures Within the Infected Local Area) 2020 under the Prevention and Control of Infectious Diseases (Act 342). It is necessary to take the following steps:
o Reduces the number of workers to a minimum or at least 50% of the current volume.
o Please ensure that the workers’ movement is restricted.
o To provide body temperature measuring tools and take daily body temperature readings.
o Employees shall comply with the COVID-19 prevention procedures prescribed by Ministry of Health (MOH) from time to time.
o To provide hand sanitizer.
o Performing the necessary sanitization and cleaning process.
o Organisations or business should ensure that social distancing best practice guidelines are in place and implemented.
• Employees can file a complaint online through the Department of Labor official email if the employer refuses to pay wages during the Movement Control Order (MCO) period.
• For employees that are protected under the Employment Act 1955, Regulations 5 and 6 of the Employment (Termination and Lay-Off Benefits) Regulations 1980 provide for termination and benefits payable, provided the conditions for placement are complied with.
• If employer want to retrench or temporarily lay-off employees during the Movement Control Order (MCO), the employer must ensure that they comply with these basic requirements:
o There must be a genuine financial impact on the business.
o Employers must first use other means before deciding to release workers such as reducing or restricting the hiring of new employees, reducing or limiting overtime, reducing work hours, limiting workers from working on weekends or public holidays, or reducing workers’ salaries.
o If the termination of employment is unavoidable, employers should first terminate the employment of foreign workers before considering local workers (ie First Foreign Workers). When considering termination of local staff, employers are encouraged to comply with “Last In First Out”.
• Employers are advised not to apply the doctrine of frustration as a result of a motion control order unless the Order has been extended for a long time. This is because the principle of frustration only occurs when the contract becomes impossible to execute, not just difficult to execute and most employees can still do their job by working remotely.
• For an employer to rely on force majeure, the employment contract must contain a clause that provides for it. If there is no clause in the contract, the employer cannot rely on the Covid-19 pandemic to avoid its contractual obligations.
