MOVEMENT CONTROL ORDER
The Movement Control Order (MCO) announced by the Prime Minister of Malaysia on 16th March 2020, to be implemented throughout the period of 18th to 31st March 2020 which now being extended for another fourteen days, to 14th April 2020. As the name suggests, the implementation of MCO was to control the movement of individuals from one place to another to curb the spread of the Covid-19. From individuals are advised to just stay at home to the stricter enforcement by deployment of military personnel to assist the Royal Malaysia Police in enforcing the MCO to stay at home. Individuals working and businesses operating within the scope of essential services as announced by the Prime Minister are to continue their job and responsibilities during this challenging and exceptional time.
GENERAL APPLICATION
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OBLIGATIONS TO PAY SALARIES AND WAGES
The Ministry of Human Resources (MoHR) has announced that throughout the MCO period from March 18, 2020 to April 14, 2020, the employers would have to pay the full salary to all employees. The Ministry further announced that employers are not allowed to force employees to exhaust their annual leave or unpaid leave during this period, as the movement restriction was made under the Prevention and Control of Infectious Disease Act 1988.
OBLIGATIONS TO PAY RENTALS IN TENANCY AGREEMENTS
There are no regulations by the government on this matter. Thus, parties would have to go through negotiations to reach a compromise. If the tenants and their possession remain in occupation of the demised premises during the MCO, rents will be payable as salaries are payable.
FULFLMENT OF OTHER CONTRACTUAL OBLIGATIONS
Broadly we will discuss two types of contractual obligations here:
Continuous Obligations- Part of The Performance to Occur During The MCO; and
One Off Obligation- To Be Perform During The MCO.
Continuous Obligations-Part of the performance to occur during the MCO
If the performance of a contract spans across the MCO period, arguably, as the Malaysian Civil Courts are closed during the MCO period, hearings may be conducted save and except by all the parties involved, therefore, the performance of any contracts in the interim is automatically adjourned until after the MCO period. However, the obligations after the MCO period should be performed as per the contracted schedule.
An example would be, the instalment payment on March 20, 2020 may be postponed to April 20, 2020 but the payment for April 20, 2020, if it falls outside the MCO period, it should be performed as per the contract on April 20, 2020.
One Off Obligation-To Be Perform During The MCO
The one off obligation to be performed during the MCO period, such as the booking of a restaurant for a wedding banquet during the MCO, that contract would be deemed frustrated and both parties are then released from their contractual obligation and any deposits paid could arguably be refunded.
