Malaysia Needs a Covid-19 Act Now To Protect Businesses and Jobs

A coalition of Malaysia’s business communities from various associations and trade bodies urgently appeal to the Malaysia Government to hasten the implementation of Covid-19 Bill/Act (Temporary Measures) through the press conference today on 29th April 2020 between 4.00pm to 5.00pm through Zoom e-Conferencing.

This is the first time in Malaysia history that various associations band together and conduct a press e-conference using Zoom and broadcast it live in Facebook to appeal to the Malaysia Government to save businesses, which ultimately save jobs.

We urgently appeal to the Government to implement this Bill/Act soonest to protect businesses from collapsing for at least a temporary period to 31 December 2020 (with necessary extension when the needs arise), with the hope that when the Bill/Act is quickly passed, all the contractual obligations will continue unabated.

Many businesses especially in the retailing, manufacturing and servicing industries have business contractual commitments that once the Movement Control Order (MCO) is over such commitments will be enforced on these businesses and thereon numerous disputes will take place which will badly impact businesses.

Post MCO

Many businesses especially in the retailing, manufacturing and servicing industries have business contractual commitments where their financial commitments will be enforced and legal disputes will take place in abundance which will impact their business survival.

It is of paramount importance for a COViD-19 Bill/Act (Similar to the Singapore Covid-19 (Temporary Measures) Act) to be put in place to protect business owners from legal suits when they are unable to fulfill their contractual obligations in order to sustain their businesses Post-MCO.

Furthermore, the Bill/Act should provide for the sharing of financial burden from owners of shopping malls, shop lots, offices and factory for a reduction in rental.

Therefore a Covid-19 Bill has to be introduced to enable businesses to receive temporary relief as many business owners will find themselves unable to fulfill their contractual obligations.

1. Prohibition to take legal action
Appropriate measures need to be spelt out in the proposed Covid-19 Bill/Act to certain contracts that prohibit certain legal actions to be taken between counter parties and/or their guarantors, if the inability of the counter parties to perform such contracts is to a material extent caused by COVID-19.

This includes not only leases (rent) but it also applies to the supply of constructions materials, performance of private corporate bonds, performance of provision of goods and services for events, performance of goods and services related to tourism, performance of private hire purchase related to factoring service provider and repossession of goods used for the purpose of a trade and business.

2. Sharing of financial burden
On the sharing of financial burden, business owners would implore that the rentals be based on Gross Turnover (GTO) sharing for mall and shop rentals during these challenging times until normalcy is in place.

If this is not favourable, Government should consider 80% tax rebate for rental reductions to landlords. The rental reductions would help ensuring the business sustainability for all involved.

3. Standard of Operating Procedures (SOPs)
Allow departmental stores and restaurants to operate under strict SOPs mirroring Hong Kong methodology of no more than 4 persons on a table and not more than certain number of guests in the restaurant.

4. Wage subsidy
The current terms and conditions that limit to 200 employees per company to claim wage subsidy should be removed by SOCSO because all employees regardless of sector pay EIS.

Furthermore, to qualify for the wage subsidy, we appeal to the Government to remove the conditions attached to the mutual reduction (i.e. pay-cut) of wages between employers and employees to sustain business survival in the private sector.

5. Private sector
Employers must be given the rights to manage its workforce and reign in wage reduction, as the employers see fit. Ultimately, it is the employers who are in in charge of the employee wage welfare.

The next 6 to 12-month business will certainly drop due to adverse market conditions hence no businesses can guarantee employment and full wage. Adjustments due to unforeseen circumstances will need to be made based on market conditions.

Urgent action for approval on 18 May 2020
The government should implement this Bill/Act without any delay to protect businesses when Parliament convenes on 18 May 2020.

To sum up the pertinent points:

1. The relief imposed by law will save jobs, businesses, companies and investments which will then continue to multiply the Economy.

2. Contracting parties will not waste Time and Resources fighting in court over application of doctrine of frustration or meaning of Force majeure Clauses. Hence there will be legal certainty resulting in commercial certainty.

3. Preserve legal rights such as right of legal action by stopping limitation.

This Bill/Act is only a temporary measure till end of the year (or extended as and when the needs arise). When the Bill/Act is passed, the contractual obligations will continue unabated.

Organised by, listed in alphabetical order:

1. ASEAN Retail-Chains & Franchise Federation (ARFF)
2. Branding Association of Malaysia (BAM)
3. Bumiputra Retailers Organisation (BRO)
4. Federation of Malaysian Fashion, Textile and Apparel (FMFTA)
5. Malaysia Budget Hotel Association (Mybha)
6. Malaysia Digital Chamber of Commerce (MDCC)
7. Malaysian Hairdressing Association (MHA)
8. Malaysia Retail Association (MRA)
9. Malaysia Retail Chain Association (MRCA)
10. McMillan Woods Association/Network of Accountants
11. Persatuan Usahawan Maju Malaysia (PUMM)
12. SME Association of Malaysia (SME Malaysia)

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