- Given the many questions and uncertainties facing employers during the period under the Movement Control Order (“MCO”) which was first imposed by the Government of Malaysia from 18 March 2020 to 31 March 2020 (“Period”) and subsequently extended from 1 April 2020 to 14 April 2020 (“Extended Period”), the Bar Council Industrial and Employment Law Committee (“IELC”) has published a Position Paper addressing the employment issues during the MCO. In essence, the IELC has taken the following position in relation to the issues:-
- Employees are to be paid their full salaries during the MCO Period and Extended Period.
- Unless agreed to by the employees, the employers cannot force the employees to take annual or unpaid leave.
- An employer facing financial difficulties in paying full salaries may seek the consent of the employees to pay reduced salaries during the Extended Period to avoid the need for retrenchment.
- An employer facing financial difficulties as a result of the Covid-19 pandemic may resort to a retrenchment or temporary lay-off of its employees to reduce its operational costs, subject to compliance of certain conditions and appropriate measures.
- Employers cannot rely on force majeure to avoid its contractual obligations during the Covid-19 pandemic if the contract of employment does not contain a clause which provides for it.
- An employer cannot rely on the doctrine of frustration during the MCO unless the MCO extends for a prolonged period of time such that the performance of the contract becomes impossible.
- The FAQs by the IELC are reproduced in full below. Click here to download the Position Paper in PDF format.
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