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A Look at Issues Faced by Employers as a Result of the Covid-19 Pandemic and Ensuing Movement Control Order 

by Wong Kian Jun

Published: July, 2020

Submission: July, 2020



The Covid-19 global pandemic which has swept the globe and caused many countries to introduce various degrees of lock down measures has given rise to various issues and scenarios which an employer must deal with and manage. This is no different for employers in Malaysia where the Government has implemented the Movement Control Order (“MCO”) since 18 March 2020 which saw the economic activity brought to a halt.

Working from home is the new normal

Since the imposition of the MCO, the term Work from Home (“WFH”) has been mentioned countless times and some employers like Twitter have gone even further by saying employees can WFH forever. Previously, the concept of WFH was merely bandied around as a pet project by employers without any intention of their entire workforce having to WFH.

As many may have realised by now, WFH has its fair share of issues and it is not as simple as bringing the laptop home and not turning up at the workplace the next day. In ensuring there is minimal impact to the organisation and the business, some of the key areas the employer must take into consideration are:

  • Have in place a clear and comprehensive policy to facilitate WFH for employees. In most organisations such policies are contained in the Business Continuity Plan (“BCP”). What may work when everyone is physically in the office may not necessarily work in a WFH scenario. This could also be an opportune time to simplify and remove cumbersome procedures. As with any form of policies, proper communication and explanation should be provided to all employees.

  • Ensure employees have access to the right tools and facilities to WFH. An employer should provide its employees access to software and hardware which would facilitate WFH. In this respect, the employer should also take into consideration security and personal data protection issues in protecting confidential/proprietary information which is particularly vulnerable when all employees are working offsite.

Safe working environment

Section 15 of the Occupational Safety and Health Act 1994 provides that it is the duty of every employer to ensure a safe working environment for its employees. With the gradual reopening of economic activities, the employer is now tasked to ensure and maintain a safe workplace when employees return.

Various measures that an employer may have to implement are:

  • Proper documentation to ensure contact tracing is possible;
  • Temperature screening;
  • Provision of hand sanitisers and face masks;
  • Regular cleaning/disinfection of the workplace;
  • Social distancing measures such as rearranging the office layout, staff rotation and so on; and
  • Testing for Covid-19.

Managing the impact to business

The impact of the MCO and the Covid-19 pandemic on most businesses have been severe and crippling in some cases. Businesses have been forced to revaluate their operations and implement various cost cutting measures. The Government has also stepped in and announced some measures to mitigate the impact on businesses in Malaysia such as the Employee Retention Scheme and the Wage Subsidy Programme.

Additionally, some of the measures that employers may seek to implement include limitation of recruitment, restriction of overtime work, reduction in number of shifts, hours or days of work, temporary laying off or retrenchment as a last resort.

Employers have also resorted to other measures such as:

  • Salary reduction;
  • No pay leave;
  • No bonuses or increments;
  • Withdrawal of benefits associated with attendance in the office such as transportation, parking and so on.

The general position is that while a reduction of the benefits conferred under the terms and conditions of employment may seem feasible, this cannot be done unilaterally. Given that these are contractual entitlements, employers are not permitted in law to unilaterally vary the terms of employment unless the consent of the employees have been obtained.

Moving forward — revising employment contracts

Experience and knowledge gained from the pandemic have made employers recognise certain areas which could be improved or made clearer moving forward.

To ensure such a situation could be better managed in the future, employers have been contemplating introducing, amongst others, the following.

Express provisions dealing with a forced shutdown

The employment contract or the collective agreement is to contain terms and conditions that would be applicable when there is a forced shutdown of operations such as during the MCO period. During any forced shut down, benefits and remuneration would be amended accordingly based on the express provisions in the employment contract or collective agreement.

The employer would be able to rely on this clause in the event a future event causes a forced shutdown.

Force majeure clause

A force majeure is an extraordinary event which had affected the ability of parties to perform the obligations as contained in the contract. For an employer to successfully rely on force majeure such a clause must be expressly provided for in the employment contract. In addition, amongst other factors that an employer must show are:

  • The event was unforeseeable and out of the control of the employer; and
  • The employer had undertaken mitigating steps to counter the effect of the event.

Depending on the situation faced by the employer and the way the force majeure clause is drafted, the unforeseeable event may result in a suspension or even the end of the employment contract between the employer and employee.


New announcements, introduction of requirements, guidelines and standard operating procedures are made by the authorities on a regular basis and it is advisable that employers keep abreast of these developments through official and validated channels.

As many of the issues above may be new to employers in Malaysia and may even amount to new concepts, employers should keep themselves updated and make informed decisions.


Written by:




For further information regarding employment and administrative law matters, please contact Wong Kian Jun from our Employment and Administrative Law Practice Group.


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