10 Frequently Asked Questions For Employers And Employees During The Movement Control Order

Coronavirus

In the wake of Malaysia’s first ever Movement Control Order effective 18-31 March 2020 (“Control Period”) to curb the spread of the COVID-19 virus, we address below 10 frequently asked questions by employers and employees in Malaysia during this time of uncertainty.

Q1: Can my employer choose not to close during the Control Period?

A1: Closure of business premises throughout Malaysia is a must, except for those providing essential services.

For further information, please contact:

Teh Guat Hong
Partner
guathong.teh@lochambers.com

Vivian Siew
Senior Associate
vivian.siew@lochambers.com

Q2: Which services are considered essential?

A2: A new law, the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 published on 18 March 2020 sets out 21 categories of essential services. Briefly, they cover banking and finance, electricity, fire, port/ dock/ airport services, postal, prison, fuel supply, healthcare and medical, solid waste management and public cleansing, sewerage, broadcasting and TV/ radio, telecommunication, transport, water, e-commerce, defence and security, food supply, wildlife, immigration, customs, hotels and accommodations. It is up to the Minister of Health to determine if any other services are essential.

Q3: What if my employer refuses to close the company’s premises?

A3: Unless exempted as per the above, anyone who disobeys the Movement Control Order commits an offence punishable by a fine of up to RM1,000 and/or up to 6 months’ imprisonment.

Q4: Can I be required to work from home?

A4: Yes, despite the closure of physical premises, employers are entitled to direct their staff to work from home. Salary should not be affected under such circumstances, although contractual allowances such as travel and business entertainment may be adjusted, in light of the temporary ban to travel overseas as well as the local restrictions on movement and public gatherings.

Q5: What if my employee refuses to work from home or refuses to come to work (for essential services)?

A5: If your company falls within the category of essential services, then you have the right to require your employees to come to work as usual. However, even for such services, you should exercise some discretion on whether your regular full workforce would all need to be at work during the Control Period. Even for companies that are involved in the provision of essential services, many of them do not require all employees to come to work or may implement shifts or alternate arrangements where only half of their employees are present at any one time.

If your company provides non-essential services, and you have provided reasonable means for your employees to work from home during the Control Period, any employee who refuses to carry out work or is not contactable during this time can be subjected to the usual disciplinary action and be ultimately dismissed if appropriate.

Photos by Fusion Medical Animation and the Centers for Disease Control and Prevention, both available on Unsplash.

These illustrations reveal ultra structural morphology exhibited by coronaviruses. Note the spikes that adorn the outer surface of the virus, which impart the look of a corona surrounding the virion, when viewed electron microscopically. A novel coronavirus, named Severe Acute Respiratory Syndrome coronavirus 2 (SARS-CoV-2), was identified as the cause of an outbreak of respiratory illness first detected in Wuhan, China in 2019. The illness caused by this virus has been named coronavirus disease 2019 (COVID-19).

Q6: What must the employer do in respect of employees who are unwell or quarantined as a result of this outbreak?

A6: Paid sick leave and/or hospitalisation entitlement must be given to those who have been tested positive for COVID-19. Meanwhile, the Ministry of Human Resources has issued Guidelines on handling COVID-19 workplace issues dated 16 March 2020 (“Guidelines”) stating that those who have received a quarantine order or a home surveillance order cannot be forced to utilise their annual leave during the quarantine period.

Q7: If work from home is not a feasible option for my company, can I ask my employees to go on unpaid leave during the Control Period?

A7: Legally speaking, the terms and conditions of a contract of employment can only be changed by mutual consent. Forced unpaid leave and/ or pay cuts may be regarded as a breach of contract which opens the employer to the risk of a claim being brought by disgruntled employees. Employers should also be careful of a constructive dismissal claim when forcing employees to go on unpaid leave during the Control Period. That said, whether or not an employer will be found liable depends much on the facts of the case.

If unpaid leave is implemented by employers beyond the Control Period, for example, for a month or more, the employee may want to apply for a cash assistance of RM600 per month which has been recently announced by the Government. This is, however, subjected to the condition that the employee’s monthly salary must be RM4,000 or below.

Q8: Can the service of employees be terminated due to the impact of COVID-19?

A8: Where workforce redundancy occurs in that there is genuinely no longer a need for the employee’s job due to factors such as business downsizing, organisational restructuring and so on, employers may retrench their staff. The economic challenges arising from the COVID-19 situation and the 14-day compulsory shutdown are undoubtedly severe, but retrenchment should be a matter of last resort.

Q9: What measures can employers take instead of exercising retrenchment right away?

A9: According to the Code of Industrial Harmony, employers are advised first to consider taking alternative measures which include reducing shifts and/or weekly working days and/or daily working hours, temporary lay-off until operations resume within the employer’s business or redeployment to another role/ associated entity. If all else fails, the employer can implement a pay cut but this should be carried out fairly and discussed ahead with the staff or trade union representatives, if applicable.

Q10: What else do employers need to know about the Guidelines?

A10: All employers are required to fill out a Termination Form (Borang PK) and submit it to the nearest Department of Labour at least 30 days before taking any of the following actions:-

  1. Retrenchment
  2. Voluntary separation scheme
  3. Temporary lay-off
  4. Salary reduction

Any employer who fails to do so shall, if convicted, be fined up to RM10,000 for each offence.