Government urged to table Covid-19 bill to save retail, services and

manufacturing sectors

By Kalbana Perimbanayagam - April 29, 2020

KUALA LUMPUR: A coalition of Malaysian business associations is calling for an

urgent enactment of a Covid-19 Act.

The group of more than 10 associations said the Act should be put in place as a

temporary measure until December to avoid legal disputes over contractual

obligations in the post-Movement Control Order (MCO) period.

They said the Covid-19 Bill is crucial because more than 40 per cent of businesses in

the retail and services sectors will not survive the financial impact brought about by

losses and the high stakes involved in rental, salaries and other contractual

commitments.

The bill, when enacted will protect these sectors against collapse, they said. The

coalition urged the Malaysian government to emulate similar enactments of Covid 19

Acts in Singapore and the United Kingdom.

The coalition comprises entities such as the Asean Retail-Chains & Franchise

Federation (ARFF), Branding Association of Malaysia (BAM), Bumiputra Retailers

Organisation (BRO), Federation of Malaysian Fashion, Textile and Apparel (FMFTA),

Malaysia Budget Hotel Association (Mybha), Malaysia Digital Chamber of Commerce

(MDCC), Malaysia Hair Dressing Association (MHA), Malaysia Retail Association

(MRA), Malaysia Retail Chain Association (MRCA), Persatuan Usahawan Maju

Malaysia (PUMM) and SME Association of Malaysia (SME Malaysia).

MRCA president, Datuk Seri Garry Chua said it was the first time in history that

various Malaysian business associations banded together to appeal for help for

30,000 businesses.

He said the effort will ultimately help to save three million jobs in the country.

"It is 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 or sustain their

businesses post-MCO.

"The act is necessary to enable businesses to receive temporary relief as many

business owners will be unable to fulfil their contractual obligations leading to

disputes and legal actions against one another.

"We implore the government to consider implementing a Malaysian version of the

Covid-19 Act, which is temporary and retrospectively effective from the start of the

MCO on March 18 till the end of the year," said Chua via a live e-Conferencing

platform today.4

He said businesses in the retail, manufacturing and service sectors have contractual

commitments; and a temporary act could avoid unnecessary trouble for everyone if

the act is spelt out correctly.

He said such legislation will prevent certain legal actions to be taken between

counter parties and their guarantors, if the inability of that counter party to perform

such contracts is related to the Covid-19 pandemic.

"The bill should also extend to the supply of construction 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 providers and repossession of goods used for

the purpose of trade and business," Chua said.

Meanwhile, MRA president James Loke said the legislation was important to combat

the adverse effects of the Covid-19 pandemic on the nation's businesses. He said the

act would protect the present job market.

"The retail and franchise industries and related businesses are facing unprecedented

uncertainties due to the ongoing MCO. It has brought big losses to businesses and

workers are being laid off.

"Many retailers operating at shopping malls and rented premises are already feeling

financial pressure as they have to still pay their workers' salaries, utilities and rental,

despite not having any business.

"The act should detail out clauses for rental, other expenses and allow for sharing of

financial burden between owners and tenants of shopping malls, shop lots, offices

and factories, as well as (have details on) reductions in rental.

"You cannot expect every landlord to be kind enough to understand (a tenant's)

predicament and give a waiver or extension period to pay up " Loke said.

He said business owners could implore for a Gross Turnover (GTO) Rent to be in

place to tide them through during these challenging times until normalcy is restored.

"If this is not favourable, the government should consider an 80 per cent tax rebate

for rental reductions to landlords. The wage subsidy should also be recapped by the

government."

Loke said the current terms and conditions which sets a 200-employee per company

limit to claim wage subsidy should be removed by the Social Security Organisation

(SOCSO) because all employees, regardless of what sector they work in pay

Employment Insurance System (EIS).

He said private sector employers must be given the rights to manage their respective

workforces 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."

Loke said in the next six to 12 months, businesses will be affected by adverse market

conditions and they will not be able to guarantee employment and full wage.5

Bumiputra Retailers Organisation Malaysia president and Mydin Mohamed Holdings

Bhd managing director, Datuk Ameer Ali Mydin, when speaking about the wage

subsidy, said the Covid-19 bill will provide a fair and level playing field for weaker and

stronger businesses during the post-MCO period.

He said the act's should contain a clearly defined standard operating procedures

(SOPs) on the limits of each clauses under the act, so that the public and business

operators are not misled.

"All these measures imposed through the law will save jobs, businesses, companies

and investments which will have a multiplying affect on the economy."

Ameer said any kind of adjustments due to unforeseen circumstances should only be

allowed based on market conditions.

He said the government should implement this act without any delay to protect

businesses when Parliament convenes on May 18.

(Source: https://www.nst.com.my/news/nation/2020/04/588576/government-urged

table-covid-19-bill-save-retail-services-and)

Questions

1.

Outline at least FOUR major issues as described in the article above.

[12 marks]

2.

Suggest ways these parties can help to alleviate the issues faced by

retailers:

a. Retailers themselves

b. Government

[14 marks]

3.

Forecast the possible impact of COVID-19 on Malaysian retailers

should the pandemic continue to wreak havoc for another year.

[14 marks]