On 16th March 2020, the Malaysian Prime Minister announced the Movement Control Order (“MCO”) throughout Malaysia as a measure to curb the spike of COVID-19 cases. In addition to some frequently asked questions that have been issued, this article addresses four key aspects of employment following the enforcement of the MCO and the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 (“Regulations”) from 18th to 31st March 2020.
Can employers request employees to work from home during the MCO period?
Pursuant to the MCO, private sectors which are not involved in essential services must be closed. In that case, employers can request their employees to work from home, if their job nature allows, and the employees should be paid their salary as normal.
According to the Regulations, the following premises may be operated provided certain conditions are met:
(a) Premises providing essential services, provided that the number of personnel and patrons are kept minimal;
(b) Premises not providing essential services may be open if the owner obtains prior written permission of the Director General of Health (“DG”), who may impose conditions; and
(c) Premises involved in food supply chains or selling food and beverages by way of drive-through, takeaway, or delivery may be open, subject to DG’s conditions.
“Essential Services” include banking, energy, fire, ports, postal, prisons, healthcare, telecommunications, transportation, food supply, defense, and other services determined by the Minister of Health as essential to public health or safety.
Can employers request employees to work on shift in the office premises during the MCO?
Under the Regulations, no person can travel between places within any infected local area except for:
(a) Performing official duties;
(b) Travelling to and from premises providing essential services;
(c) Purchasing or delivering food or necessities;
(d) Seeking medical services; or
(e) Any special purpose permitted by the DG.
No person may travel from one infected local area to another without written permission from a police officer in charge of a station.
Therefore, employees are not permitted to work in the office premises if it requires them to commute between two locations in infected local areas or across states (for example, from Selangor to Kuala Lumpur). While non-essential employers may open their premises with DG’s written permission, employees without official travel approval are not allowed to attend the office.
Employers must comply strictly with the Regulations, as contraventions constitute an offence punishable by:
(a) A fine not exceeding RM1,000 or imprisonment for up to six months, or both, for individuals; or
(b) For companies, directors or managers responsible may be charged jointly or severally.
To ensure business continuity during MCO, employers are advised to:
- Implement work-from-home (WFH) arrangements using technology.
- Redesign reporting lines for remote monitoring.
- Reallocate tasks for employees whose roles cannot be performed from home, consistent with their employment contracts.
Can employers force employees to take unpaid leave or annual leave during the MCO?
Unless the employment contract specifically allows such action during a disease outbreak, employers remain bound to pay salaries as usual.
Before the MCO, the Ministry of Human Resources issued guidelines (7 February 2020) stating that:
(a) Employers should provide full pay to employees under quarantine orders.
(b) Employers should not compel employees to use annual leave or unpaid leave during quarantine.
Although these guidelines are not legally binding and were not issued under the MCO, it is likely the Ministry would maintain that no employee should be forced to take unpaid or annual leave during the MCO. Doing so could expose employers to constructive dismissal claims and potential compensation for unjust dismissal.
Can employers retrench employees due to COVID-19?
Employers may retrench employees who have become redundant due to business downturns (such as financial losses from COVID-19), but the decision must be made in good faith and only as a last resort.
Before retrenching, employers should communicate openly with employees and explore alternatives such as:
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Reducing working hours;
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Implementing fair salary reductions; or
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Temporary reassignments.
Under Section 5 of the Employment Act 1955, employees are considered “laid-off” if:
(a) The employer fails to provide work for at least 12 normal working days within four consecutive weeks; and
(b) The employee is not entitled to remuneration during that period.
However, employees prevented from working under legally enforced leave — such as the MCO under the Control and Prevention of Infectious Diseases Act 1988 — are not deemed laid-off.
This rule mainly applies to employees earning RM2,000 or less per month, but Industrial Court decisions may use it as a guideline in assessing redundancy or lay-off disputes.
This article is authored by:
Gan Khong Aik
Partner, Gan Partnership
E: khongaik@ganlaw.my
Lee Sze Ching (Ashley)
Associate, Gan Partnership
E: szeching@ganlaw.my
Disclaimer
This article is for general information only and should not be relied upon as legal advice. The position stated herein is as at the date of publication on 1st June 2020.
For any enquiries on this article, please contact:
Gan Khong Aik (khongaik@ganlaw.my) or Lee Sze Ching (Ashley) (szeching@ganlaw.my).
