We view with concern the recent statement issued by the Malaysian International Chamber of Commerce and Industry which suggests that an employer may opt not to pay its employees’ salaries if no work has been done in view of the implementation of the movement control order from March 18.
We urge employers to be mindful of the directive issued by the human resources ministry on March 19. At the outset, we recognise that the statement by the ministry does not have the force of law. However, we believe that it would be highly persuasive in a court of law. We are of the opinion that the courts would still look at all the circumstances of each case to see whether an employer had “just cause or excuse” to terminate its employees. The MCO, in our view, does not, per se, justify termination of contracts of employment on grounds of force majeure.
However, when it becomes apparent that a lay-off or retrenchment exercise is inevitable, an employer should comply with the industrial principle of last-in-first-out , unless there are some valid reasons for departure.
What do employers do when they just don't have money to pay their staff
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