KUALA LUMPUR: A coalition of business associations is appealing to the government to consider implementing a Covid-19 law which, among others, will protect businesses from legal action for not being able to perform their contractual obligations amid the pandemic.
They urged the government to consider tabling the Temporary Measures Bill in the parliamentary session on May 18 to protect businesses from collapsing, to be effective at least until Dec 31.
“Many businesses, especially in the retailing, manufacturing and servicing industries, have contractual commitments that, once the Movement Control Order (MCO) period is over, will be enforced on them and numerous disputes will take place, which will badly impact businesses,” said McMillan Woods Association/Network of Accountants president Datuk Seri Raymond Liew today.
He said the bill/act should also provide for the sharing of the financial burden by owners of shopping malls, shop lots, offices and factories via reductions in rental.
Liew was speaking at a press conference organised by 12 business and trade bodies, including the Asean Retail-Chains and Franchise Federation, Malaysia Budget Hotel Association, Malaysia Retail Chain Association and Malaysia Digital Chamber of Commerce.
The 12 also asked the government to consult the parties with regards to the bill to ensure that it would be more holistic.
Bumiputera Retailers Organisation legal counsel Syed Naqiz Shahabudiin said most business transactions were not documented with proper contracts.
“Even if these contracts have a force majeure or frustration clause in them, normally these clauses are not worded well or they favour one party.
“Therefore, having a bill or an act like the Covid-19 Act is something very desirable for Malaysia because it essentially helps resolve a force majeure type of situation for both parties; it spells out how to resolve this predicament,” he added.
Meanwhile, SME Association of Malaysia president Datuk Michael Kang Hua Keong said it was imperative to have such a law to avoid many legal cases from happening.
Without this, he foresaw a spike in lawsuits in the next six months between employers and employees, tenants and landlords, as well as bankers and customers.
Furthermore, he said, the act would help to protect businesses from collapsing.
“A recent survey among small and medium enterprises (SMEs) that we did, with 2,005 respondents, shows that 25% of them have plans to close down while 40% have plans to lay off their staff.
“A lot of SMEs are facing a crisis with their cash flow,” he added. – April 29, 2020, Bernama
