Businesses press Putrajaya for legal shield against contract breaches caused by MCO, Covid-19

(MMO) – A coalition of various business associations and trade bodies urged the government to urgently enact a law that would protect companies including small and medium enterprises against their inability to honour legal contracts because of the movement control order.

They said this law should cover the period until December 31.

Spokesman Datuk Seri Raymond Liew of the McMillan Woods Association and Network of Accountants said many businesses — especially in retail, manufacturing and services — have contractual obligations that could not be fulfilled because of the MCO.

He said they were technically liable for these.

“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 or 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 fulfil their contractual obligations in order to sustain their businesses Post-MCO,” he said in an online press conference today.

Liew said his coalition, which represented around 30 business entities that employed almost three million employees nationwide, wanted to meet the government before Parliament convenes on May 18.

He said that amongst issued to be examined was a prohibition of legal action for such contractual breaches, for landlords to absorb some of the financial burden from business tenants unable to operate under the MCO, and for departmental stores and restaurants to be allowed to operate under strict rules.

He also said that to make it work, the government must remove conditions placed on the stimulus package introduced to help businesses ride out the pandemic and preserve jobs.

“Furthermore, to qualify for the wage subsidy, we appeal to the government to remove the conditions attached to the mutual reduction of wages between employers and employees to sustain business survival in the 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 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,” he said stressing that most SMEs have had no income for April and reduced revenue since MCO was announced on March 18.

Among others who were present in the online press conference were Bumiputra Retailers Organisation (BRO) president Datuk Ameer Ali Mydin, SME Association of Malaysia (SME Malaysia) President Datuk Michael Kang, Branding Association of Malaysia (BAM) Datin Winnie Loo, Malaysia Budget Hotel Association (Mybha) president Emmy Suraya Hussein, and Asean Retail-Chains & Franchise Federation (ARFF) vice president Datuk Mike Loh.

Other associations were the Federation of Malaysian Fashion, Textile and Apparel (FMFTA), Malaysia Digital Chamber of Commerce (MDCC), Malaysian Hairdressing Association (MHA), Malaysia Retail Association (MRA), Malaysia Retail Chain Association (MRCA) and Persatuan Usahawan Maju Malaysia (PUMM).