The Law & Order

The nationwide Movement Control Order (“MCO”) was announced by the Prime Minister on the 16th March 2020, to take effect on 18th March until 31st March 2020. This Order that was subsequently extended till 28th April 2020 is enforced by the Prevention of Infectious Diseases Act 1988 (“the Act”) and the Police Act 1967. Following the announcement of the Order the Prevention and Control of Infectious Diseases (Declaration of Infected Local Areas) Regulations 2020 were made pursuant to section 11(1) of the Act where the Minister declared all States and the Federal Territories to be infected areas.

These Regulations have the force of law. It is an offence under Regulation 7(1) to contravene any provisions of the Regulations which on conviction is punishable by a fine not exceeding RM1,000.00 or to imprisonment for a term not exceeding 6 months or to both. If the offence is committed by a body corporate, under Regulation 7(2) it’s director, manager or other similar officer may be liable to be charged.

Below, we shall talk about the rights of Malaysian Employee during and after the MCO.

During MCO

Q: Can employer force you to take annual leave during the MCO Period ?

A: No. Employer is not allowed to force their employees to take annual leaves during MCO period.

Q: Are you entitled to your full salary?

A: Yes. Employer still needs to pay employees their salary just like before, only the allowance is different because it is not a must to pay. However, the announcement by the Government on 6th April 2020 encourages negotiations between the employer and employee on options for salary reduction and unpaid leave.

Q: Can your employer force you to leave your job?

A: Yes. However, a retrenchment is only justified by the employer facing extreme financial difficulty. If your employer does not seem to be suffering financially, and you are pressured to leave, you are free to resign and bring your ex-employer to the Industrial Courts. For employer who is suffering financial difficulties, before removing any employee the Employer should take appropriate steps to prevent the termination of employment as recommended in the Code of Conduct for Industrial Harmony. (*The Code of Conduct for Industrial Harmony is an agreement made between the Ministry of Human Resources and the Malaysian Council of Employers’ Organisations.)

Q: What if my employer forces me to work during the MCO Period?

A: Under the Order, except for businesses providing essential services, all other business premises shall remain closed for the period the MCO is in force. If your employer forces you to come to work at a non-essential service, that is essentially an offence under the Regulations and you should make a police report. If your company falls under the businesses providing essential services category, your employer must strictly follow the Standard Operating Procedure provided by the Ministry of Health, Ministry of International Trade and Industry and any other relevant agencies.

After MCO

Q: If my employer goes bankrupt/wound up, am I still entitled to my unpaid salary?

A: Yes. Usually, when a company goes bankrupt or insolvent, the employers need to inform the Labour Department if they going to close down their business or retrench their staffs. They need submit an employment notification retrenchment form (PK Form) to any Labour Office. Failing to do so will cost them a fine of RM10,000.00. Any employee is entitled to their unpaid salary. If your salary is remained unpaid by the employer, you can file a complaint by sending an official letter to the nearest Labour Department.

Q: Can my employer continue pay cut or lessen working hours after the MCO Period?

A: Yes, if it is mutually agreed between the employer and employee. However, for Employer that had signed up for the Wage subsidy programme, they are not allowed to implement any pay cut.

Q: Can my employer terminate my employment after MCO Period?

A:Yes. Employer may terminate /dismiss an employee for three acceptable reason – (1) misconduct; (2) poor work performance; and (3) redundancy/ retrenchment. The employer must be able to show that there was a just cause to terminate the employee. As such, an employee may be terminated if the company has legitimate commercial ground(s) to retrench an employee and this exercise is not done in bad faith or to victimise a particular employee.

Therefore, if a company is legitimately facing financial difficulties as a result of the COVID-19 pandemic, it has prima facie legitimate ground to reduce its workforce and to retrench employees who are deemed redundant/surplus.

However, employee should be entitled to their retrenchment benefits. For employee with monthly salary of RM2,000.00 and below, it falls within the purview of the Employment Act 1955 and would be entitled to termination or retrenchment benefits if the employee was employed under a continuous contract of employment for at least 12 months before the termination.

For the employees who are not covered by the Employment Act, the obligation to pay the retrenchment benefits will depend on the employment contract or contract of service, subject to such other industrial law and guidelines.

** That’s all for now **

18.4.2020 /cy