A MONTHLY NEWSLETTER BY HALIM HONG & QUEK | VOLUME 3 | ISSUE NO.3 | MARCH 2020 | THANKS A MILLION … TO ALL THE COURAGEOUS FRONTLINERS & ESSENTIAL SERVICE PROVIDERS ~ WE STAND IN SOLIDARITY WITH YOU ~ INSIDE THIS ISSUE INTRODUCING HHQ Covid-19 Legal Support Service Covid-19 & its effects on CONTRACTUAL OBLIGATIONS STAMPING LEGAL DOCUMENTS during the MCO Period Preventative Measures in STRATA SCHEMES EMPLOYERS’ OBLIGATIONS in light of the MCO Understanding the MALAYSIAN MOVEMENT CONTROL ORDER (MCO) hhq.com.my FREE Publication Publication Permit PP19508/08/2019(035103) #LetsSayThanks #StayAtHome #DudukRumah #KitaJagaKita #FlattenTheCurve
Transcript
A MONTHLY NEWSLETTER BY HALIM HONG & QUEK
| VOLUME 3 | ISSUE NO.3 | MARCH 2020 |
THANKS A MILLION … TO ALL THE COURAGEOUS FRONTLINERS & ESSENTIAL SERVICE PROVIDERS
~ WE STAND IN SOLIDARITY WITH YOU ~
INSIDE THIS ISSUE
INTRODUCING HHQ Covid-19
Legal Support Service
Covid-19 & its effects on CONTRACTUAL
OBLIGATIONS
STAMPING LEGAL DOCUMENTS
during the MCO Period
Preventative Measures in STRATA SCHEMES
EMPLOYERS’ OBLIGATIONS
in light of the MCO
Understanding the MALAYSIAN MOVEMENT CONTROL ORDER (MCO)
hhq.com.my
FREE Publication
Publication Permit PP19508/08/2019(035103)
#LetsSayThanks
#StayAtHome
#DudukRumah
#KitaJagaKita
#FlattenTheCurve
From the Editor … | VOLUME 3 | ISSUE NO.3 | MAC 2020 |
Dear Readers,
Never before have we, the human race, experienced such spirits of togetherness and unity in isolation - “Unity in isolation” – sounds oxymoronic, yet this is the very reality we are currently living in, as we fight against the outbreak of Covid-19. Governments around the world have and are continuing to impose their respective versions of quarantine measures with the aim of breaking the fatal chain of transmission and infections. It is particularly heartening to watch the heroic acts of medical front liners and essential service providers who are selflessly and tirelessly staying at work, to keep the rest of us safe. In these trying times, it is easy for us to be overwhelmed by worry, panic and fear. We should not, however, loose perspective and must keep reminding ourselves that we are not alone in this … We simply need to do our part – ‘unity in isolation’. We need to stay put and keep a firm faith that this, too, shall pass .... Till then,
is a monthly newsletter published by Halim Hong & Quek (HHQ) It is distributed for free and can be read on HHQ’s website - https://hhq.com.my/ All articles in this publication are intended to provide a summary or review of the subject matter and are not intended to be nor should it be relied upon as a substitute for legal or any other professional advice.
INSIDE THIS ISSUE
1 INTRODUCTION TO HHQ COVID-19 LEGAL SUPPORT SERVICE
2 - 5 COVID-19 & ITS EFFECTS ON Contractual Obligations
6 - 7
STAMPING OF LEGAL DOCUMENTS during the MCO period
8 Preventative measures against Covid-19 IN STRATA SCHEMES
9 EMPLOYERS’ OBLIGATIONS during the MCO
10 - 12 UNDERSTANDING THE MALAYSIAN Movement Control Order (MCO)
KUALA LUMPUR OFFICE OFFICE SUITE 19-21-1, LEVEL 21, WISMA UOA CENTRE, 19, JALAN PINANG, 50450 KUALA LUMPUR. T +603 2710 3818 F +603 2710 3820 (Corporate & Real Estate) +603 2161 3821 (Dispute Resolution) E [email protected]
PENANG OFFICE C-11-2, LORONG BAYAN INDAH 3, BAY AVENUE, 11900 BAYAN LEPAS, PULAU PINANG. T +604 640 6818 T +604 640 6817 F +604 640 6819 E [email protected]
JOHOR OFFICE A-2-23 & A-3-23, BLOCK A, PUSAT KOMERSIAL BAYU TASIK, PERSIARAN SOUTHKEY 1, 80150 JOHOR BAHRU, JOHOR. T +607 300 8101 T +607 289 7366 F +607 300 8100 E [email protected]
The Covid-19 outbreak and implementation of the Movement Control Order have impacted many individuals and businesses in Malaysia.
新冠肺炎爆发和行动控制指令的执行影响了许
多在马来西亚的个体和企业.
To help address the various legal implications, Halim Hong & Quek has established an ad hoc ONLINE LEGAL SUPPORT SERVICE - “HHQ LSS”
为此，Halim Hong & Quek 律师事务所专门设
立了在线法律支援服务 （“HHQ LSS”）来帮助
解决各种因新冠肺炎所造成的法律问题。
SCOPE OF CONSULTATION
法律支援服务服务范围
Consultation on legal issues caused by the Covid-19 outbreak and the Malaysian Movement Control Order, including but not limited to: 对于 COVID-19 爆发和马来西亚行动管制令引
起的法律问题咨询, 包括但不限于:
CONTRACT REVIEW. 合同审查
LIABILITY ASSESSMENT. 合同责任评估
EMPLOYMENT RELATED ISSUES. 雇佣相关问题
IMMIGRATION RELATED ISSUES. 入境相关问题
HOW IT WORKS? 如何运作?
Fill in our standard online form at: 填写我们的在线表格，链接为
COVID-19 & ITS EFFECT ON CONTRACTUAL OBLIGATIONS : INTRODUCTION The World Health Organization (“WHO”) had recently declared the Coronavirus (“Covid-19”) outbreak as a Public Health Emergency of International Control (PHEIC”) due to the spiraling increase in confirmed cases and rise in deaths reported across over more than 100 countries. The International Health Regulations 2005 has defined PHEIC as “an extraordinary event which is determined to constitute a public health risk to other States through the international spread of disease and to potentially require a coordinated international response”. As a result of the above, we have recently seen many countries implement protective measures and restrictions in order to properly manage the Covid-19 outbreak. In Malaysia for example, a Movement Control Order (“the Order”) has been introduced by the Malaysian Government on 16 March 2020 and the said Order is meant to be in force from 18 March 2020 to 14 April 2020. With the implementation of the said Order, it is expected that many businesses may find that they or their counterparties will struggle to meet their respective contractual obligations, at least during the period of the Order being in force.
HOW COULD COVID-19 AFFECT CONTRACTUAL OBLIGATIONS? Limitations and restrictions that arise from the Covid-19 outbreak could enable a party that has entered into a contract in Malaysia to avoid its obligations by invoking a ‘force majeure’ clause or by relying on the statutory concept of frustration of contract as recognized in our Contracts Act 1950. It is however important to note, that different thresholds apply to both methods, and parties should obtain professional legal advice before pursuing either one.
WHAT IS FORCE MAJEURE? The term ‘force majeure’ is taken from the Commercial Code of France and is used in reference to all circumstances independent of the will of man and which is not in his power to control. In simpler terms, FORCE MAJEURE refers to the occurrence of events that are beyond the control of the parties in a contract, such as natural disasters and war, that prevent one of the parties in the contract from carrying out its contractual obligations. A force majeure clause in a contract will usually stipulate that the defaulting party should not be held liable if a listed force majeure event either prevents or delays that party from completing the contracted work.
DOES THE FORCE MAJEURE CLAUSE IN MY CONTRACT COVER COVID-19? Force majeure has no independent meaning under Malaysian law, meaning its principles are not automatically applied to commercial contracts. Rather, it is the precise wordings of the clause in each individual contract that will ultimately determine what is or isn’t covered. Due to the recentness of this outbreak, it is indeed unlikely that any force majeure clause would explicitly list COVID-19 as one of the eventualities. It is however possible that the clause may specifically mention terms such as “epidemic”, “pandemic”, “government intervention”, “quarantine”, “disease”, etc1. Should this be the case, a defaulting party who intends to rely on the force majeure clause in a contract, will, in all likeliness be able to do so provided that all requirements are met.
1 Please note that the Pertubuhan Arkitek Malaysia (“PAM”) Standard Form of Contracts has defined Force Majeure as “circumstances beyond the control of the Contractor caused by terrorist acts, governmental or regulatory action, epidemics and natural disasters”.
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WHAT ARE THE REQUIREMENTS THAT NEED TO BE MET IN ORDER TO ENABLE A DEFAULTING PARTY TO RELY ON A FORCE MAJEURE CLAUSE? A defaulting party must prove: One of the events referred to in the force majeure clause has occurred; It has prevented, hindered or delayed the defaulting party from performing the contract; Its non-performance was due to circumstances outside of its control; and There were no reasonable steps that it could have taken to avoid or mitigate against the event.
It is important to note that in order for a force majeure clause to take effect, performance must be physically or legally impossible, and not merely just more difficult or unprofitable2.
WHAT IF A CONTRACT HAS A FORCE MAJEURE CLAUSE WHICH DOES NOT SPECIFICALLY COVER TERMS SUCH AS “EPIDEMIC”, “PANDEMIC”, “GOVERNMENT INTERVENTION”, “QUARANTINE” & “DISEASE”?
There are many standard form contracts that are commonly used in Malaysia. One such example is the PWD (Public Works Department) Standard Form of Contract Form 203A (Rev. 1/2010). Whilst this standard form of contract does include the provision of a force majeure clause, there is no specific mention of Covid-19 (or even terminology such as “epidemic” or “pandemic”) as one of the events described under the said clause. In a situation like that, the defaulting party would not be able to rely on the force majeure clause. He would have to look at other provisions in the contract to see if anything else could be applicable to him in the circumstances. A contractor for instance, would be able to rely on clause 43.1(i) of the contract in order to secure an extension of time to duly complete his performance under the contract as opposed to making a claim under force majeure which is likely to fail.
Clause 43.1(i) states as follows:
“Contractor’s inability to secure such goods, materials and/or services that are essential to the proper carrying out of the Works for reason beyond his control unforeseeable at the date of closing of tender of this contract”.
It would thus be up to the defaulting party to prove that an event such as Covid-19 was ‘unforeseeable’ i.e. not reasonably contemplated at the time of making the contract, and that the outbreak and the resulting impact on the defaulting party’s ability to carry out its contractual obligations was ‘beyond his control’ in order to be successful in the defaulting party’s application for extension of time. WHAT IF MY CONTRACT DOES NOT HAVE A FORCE MAJEURE CLAUSE AT ALL? If you are unable to fulfil your contractual obligations, and you have no force majeure clause in your contract, you could be sued for breach of contract. Under these circumstances, it may prudent for a party similarly circumstanced to consider relying on the law of ‘frustration of contract’ as provided under Section 57(2) of the Contracts Act 1950:
2 Thames Valley Power v Total Gas & Power [2005] EWHC 2208 (Comm)
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A contract to do an act which, after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
In essence, a contract can be frustrated if the said contract has become impossible / unlawful to perform due to a ‘supervening event’.
WHAT AMOUNTS TO ‘FRUSTRATION’? When the entire purpose of a contract has been taken away as a result of some supervening act, the contract is deemed to have been frustrated. There are 3 primary elements that need to be shown in order to enable any party to rely on frustration of contract under Section 57(2) of the Contracts Act 1950. Firstly, that the supervening event is one which was unexpected (i.e. that the contract, when formed, had not contemplated such a supervening event), secondly, that it is beyond the parties’ control and thirdly, where such a supervening act makes performance impossible or radically different from that which the parties contemplated at the time of entering into the contract3.
WHAT IS THE DIFFERENCE BETWEEN FORCE MAJEURE AND FRUSTRATION OF CONTRACT? The Singaporean Court of Appeal in Glahe International Expo AG v ACS Computer Pte Ltd and another4 explained as following:
“…doctrine of frustration operates on a completely different level from a force majeure clause. Whereas a force majeure clause is an agreement as to how to resolve outstanding obligations upon the onset of a foreseeable event, the doctrine of frustration concerns the treatment of contractual obligations upon the onset of an unforeseeable event.”
Therefore, if the purpose of the contract has not been taken away entirely, then the party who wishes to rely on the doctrine of frustration will not be able to do so. HOW DO I INVOKE A FORCE MAJEURE CLAUSE? First, check whether your force majeure clause includes events such as “pandemics” and “epidemics”. If it does not, check whether your force majeure clause encompasses a general catch all phrase which covers all events “outside the reasonable control of the parties”. If your force majeure clause contains either of the two above, ask yourself if the Covid-19 outbreak has made performance actually impossible or has it just become less convenient and/or more expensive. If performance has become actually impossible, you will be able to rely on the force majeure clause. If performance has merely become less convenient / and/or more expensive, you will not be able to
rely on the force majeure clause.
3 Guan Aik Moh (KL) Sdn Bhd & Anor v Selangor Properties Bhd [2007] 4 MLJ 201 4 [1999] 2 SLR 620
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WHAT CAN I DO IF MY COUNTERPARTY CLAIMS FRUSTRATION or FORCE MAJEURE? Firstly, check if the contract has a force majeure clause. If it does, check if the clause covers epidemic or pandemic events. Next, check whether there is any link between the force majeure or frustrating event and non-performance. Next, write to your counterparty and request for evidence of the factual circumstances that they are relying on. A request should also be made seeking explanation as to why performance has now become physically or legally impossible. It would also be prudent to seek for evidence of steps taken by the counterparty to mitigate the situation. Should you be satisfied with the counterparty’s response, consider entering a written variation to the contract. If you are not satisfied with the counterpart’s response, then you may want to consider escalating the matter to dispute resolution.
CONCLUDING NOTE It is prudent to check if your affected contracts have force majeure clauses. If they do not, consider whether the MCO has taken away the purpose of your contract. This will assist you in understanding if the contractual obligations are merely suspended or the entire contracted is frustrated and hence terminated. Finally, although the above matters discussed primarily focuses on the effects of the MCO on existing contracts, these principles will continue to apply even after 31 March 2020 if the Covid-19 situation is such that it still affects your ability to perform under the contract in question.
This article is intended to provide an overview of the subject matter & are not intended to
be nor should be relied upon as a substitute for legal or any other professional advice.
STAMPING OF LEGAL DOCUMENTS DURING THE MOVEMENT CONTROL ORDER (MCO):
Malaysia has imposed a Movement Control Order (“MCO”) for two weeks which will take effect from 18th March to 14th April 2020 (“the Period”). During the Period, Director General of Inland Revenue (“Stamp Office”) has announced its office closure. As a result of the same, all Sale and Purchase Agreements (“the Agreement”) cannot be presented to the respective Stamp Office(s) for stamping purposes.
Having said the above, it remains possible to stamp the Agreement by:-
STAMPS is an Electronic Stamp Duty Assessment and Payment System accessible vide the following link:- https://stamps.hasil.gov.my
Any Company, Solicitors (legal firm), Real-Estate Agent etc. who is duly registered in Malaysia can resort to stamping the Agreement vide STAMPS.
In the ordinary course of business, a stamping application can be done online at the above link and a Notice of Assessment will be issued and the payment thereof can be done online or at any branch of Stamp Office. The Stamp Certificate (in relation to the instrument to the value of the duty paid) will be issued electronically subsequent thereto and the instrument shall be deemed to be duly stamped.
Ordinarily, penalty is imposable if the Agreement is not stamped within 30 days from the date of Notice of Assessment. However, due to the enforcement of the MCO and the closure of Stamp Office, we have been made to understand that the Stamp Office has graciously extended the 30 day period from the date of the Notice of Assessment to 30th of April 2020.
For individuals who are not able to access the STAMPS, they may stamp the Agreement by affixing Adhesive Stamp or Revenue Stamp (“Setem Hasil”) on the Agreement.
Pursuant to Section 7(1) of the Stamp Act 1949, payments of stamp duty can be done by way of affixing Setem Hasil on the Agreement.
Subsequent thereto, the Setem Hasil will need to be ‘cancelled’ following the methods below and the Agreement shall be deemed to be duly stamped:
METHODS TO ‘CANCEL’ STAMP HASIL: Firstly, in accordance to SECTION 7(3) of STAMP ACT 1949: Once the Agreement has been affixed with Setem Hasil, the Setem Hasil shall be presented to the office of collector and the Setem Hasil shall be ‘cancelled’ by having the words “Stamp Office” with the name of the district and the date written or printed partly on the stamp and partly on the paper to which the stamp is affixed. Secondly, in accordance to SECTION 7(4) of STAMP ACT 1949: Alternatively, the person by whom the Agreement is first executed (Second Schedule) when affixing such stamp, shall cancel the same by writing or marking distinctly the date in ink either wholly on the stamp or partly on the stamp and partly on the paper to which the stamp is affixed. In summary, the Agreement can be stamped and cancelled by the Office of Collector or alternatively, a person who first executed the Agreement.
This write up is intended to provide an update of the subject matter &
is not intended to be nor should it be relied upon
as a substitute for legal or any other professional advice.
EMPOWER | VOLUME 3 | ISSUE NO. 3 | MARCH 2020
PREVENTIVE MEASURES AGAINST COVID-19
IN STRATA SCHEMES DURING THE MCO : To ensure compliance of the Malaysian Movement Control Order, the Ministry of Housing and Local Government has, on 21st March 2020, issued a circular on preventive measures against Covid-19 to be enforced by Commissioner of Building (“COB”) & management bodies of strata schemes :
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This infographic is intended to provide a summary of the subject matter & are not intended to
be nor should be relied upon as a substitute for legal or any other professional advice.
SUMMARISED BY:
GOH LI FEI LL. B (Hons) Multimedia University ASSOCIATE, REAL ESTATE (Strata)
MACHINERIES (ESPECIALLY LIFTs). SECURITY SERVICES. MEDICAL SERVICES.
EMPOWER | VOLUME 3 | ISSUE NO. 3 | MARCH 2020
#HHQ FACTS
Malaysia has imposed a Movement Control Order (“MCO”) for from March 18 to April 14 of 2020, as announced by Prime Minister Tan Sri Muhyiddin Yassin as a measure to tackle the current Covid-19 outbreak in the country. During the period of MCO, employers are entitled to request their employees to work from home but are not allowed to withhold or deduct salaries of their employees, in line with the Guidelines issued by the Ministry of Human Resources on 5th Feb 2020 and by the Malaysian Employers Federation on 14th Feb 2020; It is essential that employers observe relevant provisions of the Employment Act 1955 during this period. Section 60E(1B) of the Employment Act 1955 (“EA 1955”) provides that where an employee “who is on paid annual leave becomes entitled to sick leave or maternity leave while on such annual leave, the employee shall be granted the sick leave or the maternity leave, as the case may be, and the annual leave shall be deemed to have not been taken in respect of the days for which sick leave or maternity leave is so granted” In the context of the Covid-19 outbreak, the application of Section 60E (1B) EA 1955 would then mean that where employees are granted a Quarantine or Home Surveillance Orders, they should not be forced to use their annual leave entitlement for the quarantine period. At the same time, Section 60F of the EA 1955 enables employers to instruct their employees to be examined immediately by a registered medical practitioner, at the expense of the employer. Employers should provide paid sick leave or hospitalization leave to employees under quarantine regardless of whether they are serving their quarantine at home or in a hospital. Employees who have returned from the affected countries after serving an official duty or per the employer’s instructions should be paid their full salaries while serving their quarantine period. Importantly, in situations where the EA 1955 is not applicable, employers cannot unilaterally impose forced unpaid leave(s) and/or deduct the salaries of their employees. Employers are reminded of the need to obtain consent from the employees should they wish to vary or impose new terms in the contract of employment of their employees.
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This write up is intended to provide an update of the subject matter & is not
intended to be nor should be relied upon as a substitute for legal or any other
professional advice.
WRITTEN BY:
TAN POH YEE LL.B(Hons) University of East London, CLP DEPUTY HEAD, LEARNING & DEVELOPMENT
UNDERSTANDING THE MALAYSIAN MOVEMENT CONTROL ORDER : SCOPE AND NATURE OF THE MOVEMENT CONTROL ORDER
Malaysia has imposed a Movement Control Order (“MCO”) for from 18th March to 14th April 2020 (“the Period”). It was announced by Prime Minister Tan Sri Muhyiddin Yassin, as a measure to tackle the current COVID-19 outbreak in the country
6 KEY MEASURES UNDER THE MCO -
[1] NO MASS GATHERINGS No mass gatherings are allowed for the Period. This restriction applies to all religious, sports, social, and cultural activities. What this means is that all houses of worship and business premises must be closed unless it falls within the category of “essential services” as defined under our Industrial Relations Act 1967. Examples of essential services include supermarkets and grocery stores selling daily necessities. In so far as Muslims are concerned, the adjournment of all religious activities in mosques inclusive of Friday prayers is in line with the decision of the Special Mental Health Committee meeting held on March 15, 2020.
[2] NO TRAVELLING ABROAD FOR MALAYSIANS
Malaysians will be banned from traveling abroad for the Period. For Malaysians who have just recently returned from overseas, it is a must to undergo a health check followed by a quarantine (or self-quarantine) for fourteen (14) days.
[3] RESTRICTIONS ON THE ENTRY OF FOREIGNERS INTO MALAYSIA
There will be restrictions on the entry of all tourists and foreign visitors into Malaysia.
.
[4] CLOSURE OF SCHOOLS
All types of schools including kindergartens, government and private schools including daily schools, boarding schools, international schools, tahfiz centers, and other primary, secondary and pre-university institutions are required to close during the period.
[5] CLOSURE OF PUBLIC AND PRIVATE HIGHER EDUCATION The closure is also extended to all public and private higher education institutions and skills training institutes nationwide.
[6] CLOSURE OF ALL GOVERNMENT AND PRIVATE PREMISES
Closure of all government and private premises except for those who are involved in essential services such as water, electricity, energy, telecommunications, postal, transportation, irrigation, oil, gas, fuel, lubricants, broadcasting, finance, banking, health, pharmacy, fire, prison, port, airport, safety, defence, cleaning, retail, and food supply.
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POSSIBLE PENALTY(IES) for VIOLATION OF THE MCO
[1] General penalty under Section 24 of Prevention and Control of Infectious Diseases Act 1988 (“the 1988 Act”) provides that:
"Any person guilty of an offence under this Act for which no specific penalty is provided shall be liable on conviction- (a) in respect of a first offence, to imprisonment for a term not exceeding two years or to fine or to both; (b) in respect of a second or subsequent offence, to imprisonment not exceeding five years or to fine or to both; (c) in respect of a continuing offence, to a further fine not exceeding two hundred ringgit for every day during which such offence continues."
[2] It is pertinent to note that Regulation 7(1) of the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 dated 18.3.2020 ("Regulations") issued pursuant to the 1988 Act provides a different punishment whereby upon conviction the offender will be liable to a fine not exceeding RM1,000.00 or imprisonment up to six months or both. However, Regulation 7(2) provides that where any of the director, manager or other similar officer of a body corporate is found guilty of the offence, shall be deemed to be guilty of that offence unless, having regard to the nature of his functions in that capacity and to all circumstances, he proves—
(i) that the offence was committed without his knowledge, consent or connivance; and (ii) that he took all reasonable precautions and had exercised due diligence to prevent the commission of the offence
[3] The general penalty in Section 94 of the Police Act 1967 provides that: "Any person who is guilty of an offence under this Act for which no other penalty is expressly provided shall be liable to a fine not exceeding five hundred ringgit or to imprisonment for a term not exceeding six months or to both." [4] An employer is required under Occupational Safety and Health Act 1994 to provide its employee with a safe system of work and healthy workplace. A breach of this mandatory and statutory provision is a punishable offence with fine up to RM50,000.00 or imprisonment up to two years, or both.
DOES THE MOVEMENT CONTROL ORDER CONSTITUTE AN EVENT OF FORCE MAJEURE? In Malaysia, Force Majeure is not defined by any statute. Instead, it is the common law position that is accepted in defining what is in fact a force majeure event. Apart from that, it is contractual wordings that bind parties and as such, whether or not the Covid-19 epidemic or the MCO is a force majeure event, ultimately depends on the exact word used and/or what is covered or interpreted as a force majeure event in the contract. At this point, we are unable to comment as to whether the Covid-19 epidemic or the MCO would be considered as an “Act of God” or "Act of Government" or even "circumstances beyond the parties' control" by our Courts as this is indeed an unchartered territory. The unprecedented of partial locked down and restriction in free movement imposed by the Government may convince our court in accepting that the virus outbreak resulting to the MCO constitute an unforeseeable contingency. Parties seeking relief for force majeure protection must then comply with the prescribed notice requirement under the provision of the contract.
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HAS THERE BEEN ANY SIMILAR TYPE OF ORDER MADE IN MALAYSIA BEFORE? No. This is the first in Malaysia’s history that our Government has invoked such an Order in Malaysia under the said Act(s) to tackle public health crisis.
WHAT ARE THE TYPES OF NON-ESSENTIAL SERVICES WHICH MUST BE CLOSED BY REASON OF THIS ORDER? Hair salons, barbershops, gyms, law firms and all other types of services that do NOT fall under the list/definition of essential services as defined in the Schedule/Regulation 2 of the Regulations must shut its premises for the Period:
▪ Banking and Finance ▪ Electricity and Energy ▪ Fire ▪ Port, dock, and airport services and undertakings, including stevedoring, lighterage, cargo handling, pilotage
and storing or bulking of commodities ▪ Postal ▪ Prison ▪ Production, refining, storage, supply and distribution of fuel and lubricants ▪ Healthcare and medical ▪ Solid waste management and public cleansing ▪ Sewerage ▪ Radio communication including broadcasting and television ▪ Telecommunication ▪ Transport by land, water or air ▪ Water ▪ E-Commerce ▪ Defence and security ▪ Food supply ▪ Wildlife ▪ Immigration ▪ Customs ▪ Hotels and accommodations ▪ Any services or works determined by the Minister as essential or critical to public health or safety
Notwithstanding this, we are of the view that there is no restraint against companies from implementing/adopting a “work from home” policy as the order does not bar one from continuing work so long as such operations can be carried out without the need for opening of premises and in line with social distancing rationale with the ultimate aim of flattening the curve. CAN AN EMPLOYER WHO HAS BEEN AFFECTED WITH THE ORDER TO SHUT DOWN PREMISES CHOOSE TO NOT PAY SALARIES TO EMPLOYEES DURING THAT PERIOD? Unless and until the Government has made any exemption announcement on this, employers are not allowed to withhold or deduct the salary of their employees. This is also consistent with a similar situation whereby Guidelines were issued by the Ministry of Human Resources dated 5.2.2020 and Malaysian Employers Federation dated 14.2.2020 stating amongst others that full pay is required to be made to any employee receiving quarantine order in relation to the current COVID-19 epidemic, though these guidelines may not have the force of law. Be that as it may, in the event of dispute, we do not see the competent jurisdiction of authority will differ or deviate from this acceptable policy.
This write up is intended to provide an update of the subject matter & is not intended to be nor should it be relied upon as a substitute for legal or any other professional advice.
