Malaysia Needs a Covid-19 Act to Protect Businesses and Jobs

A coalition of Malaysia’s business communities from various associations, including MRCA and trade bodies, urges the Government to implementation of Covid-19 Bill/Act (Temporary Measures). The online press conference in late April was done through Zoom e-Conferencing.

his is the first time in T Malaysia’s history that various associations came together and conducted an e-press conference using Zoom and broadcasted it live on Facebook to appeal to the Malaysia Government to protect and save businesses, which ultimately save jobs. The coalition said the Covid-19 Bill/ Act would provide at least a temporary period to 31 December 2020 (with necessary extension when the needs arise), until businesses could resume full operations.

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.

MRCA honorary auditor Datuk Seri Raymond Liew said, it was 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,” said Datuk Seri Raymond who read out the appeal of the coalition.

1PROHIBITION 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 counter parties are unable to perform such contracts due to, a material extent, caused by Covid-19.

This includes not only leases (rent) but 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.

Pertinent Points

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

2SHARING 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, the Government should consider 80% tax rebate for rental reductions to landlords. The rental reductions would help ensuring the business sustainability for all involved.

3STANDARD

OPERATING PROCEDURES (SOPS)

Allow departmental stores and restaurants to operate under strict SOPs mirroring Hong Kong methodology of no more than 4 people to a table and not more than certain number of guests in the restaurant.

4WAGE 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.

5PRIVATE 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.

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

The Coalition Comprised the Following:

• Malaysia Retail Chain Association (MRCA) • SME Association of Malaysia (SME Malaysia) • Malaysia Retail Association (MRA) • Bumiputra Retailers Organisation (BRO) • ASEAN Retail-Chains & Franchise Federation (ARFF) • Malaysia Digital Chamber of Commerce (MDCC) • Branding Association of Malaysia (BAM) • Bumiputra Retailers Organisation (BRO) • Persatuan Usahawan Maju Malaysia (PUMM) • Federation of Malaysian Fashion, Textile and Apparel (FMFTA) • Malaysia Budget Hotel Association (Mybha) • Malaysian Hairdressing Association (MHA) • McMillan Woods Association/ Network of Accountants

MRCA MCO Action Bureau Town Hall Sessions

The MRCA MCO Action Bureau (MMAB) held four Town Hall sessions via zoon with its members on how the bureau can assist those whose businesses are affected by the impact of Covid-19 pandemic. During each session held on May 3, 7 and 21, MRCA President Datuk Seri Garry Chua gave his opening remarks followed by Dato Alex Wong, Chairman of MMAB, who highlighted the objectives of the bureau.

There were also open discussion, sharing and Q&A sessions. Some of the issues discussed at the sharing session were alternative source of business funding, franchising your business, angel investors, crowd funding and looking for business mentors, among others.