Businesses lobby for legal protection

PETALING JAYA: Entrepreneurs are urging the government to pass a Covid-19 Act to better protect businesses from the economic impact of the novel coronavirus.

A Covid-19 Act which would prohibit legal action to be taken on the inability of businesses and companies to fulfil contractual obligations due to the Covid-19 pandemic could protect businesses in the country, said business community leaders.

Representatives of 11 associations and trade bodies said in an online press conference that the Act could be a temporary relief measure until businesses could resume full operations.

“Appropriate measures needed to be spelt out in the proposed Covid-19 Act to prohibit certain legal action to be taken between counter parties and/or their guarantors, if the inability of the counter parties to perform such contracts is to a material extent caused by Covid-19, ” said McMillan Woods president Datuk Seri Raymond Liew, reading out an appeal signed by the local business community.

Liew said the contracts should include leases such as rent; the supply of construction materials; performance of private corporate bonds; performance of provision of goods and services for events.

Others include performance of goods and services related to tourism; performance of private hire purchase related to factoring service provider; and repossession of goods used for the purpose of a trade or business.

He said this was important so that businesses in the country did not waste precious resources of money and time to fight disputes in court and could instead focus on reviving the Malaysian economy.

“The relief imposed by law will save jobs, companies and investments which will continue to multiply the economy, ” he said.

Malaysia Retailers Association (MRA) president James Loke said many retailers in Malaysia had seen sales drop by as low as 90% during the movement control order period.

“With close to zero revenue and fixed costs – needing to pay salaries, utilities and rent – many retailers are unable to meet their contractual obligations. So we are appealing to the government to implement this Act so we can focus on reviving our businesses, ” said Loke.

This view was echoed by Malaysia Retail Chain Association (MRCA) president Datuk Seri Garry Chua, who said that businesses could not rely on the “goodwill” of landlords alone in dealing with their contractual obligations such as rental fees.

Malaysia Budget Hotel Association president Emmy Suraya Hussein said a law that would

temporarily halt lawsuits against tenants who were unable to fulfil their contractual obligations would be a tremendous help to the country’s budget hotel business.

“The country’s tourism industry is badly affected by the Covid-19 outbreak. We’re the first to be hit and will be the last to recover.

“Many budget hotels are renting from landlords; so this Act will help many of those affected, ” said Emmy.

The local business community is also asking for the government, through Socso, to remove limits imposed on the Wage Subsidy programme to allow for more than 200 employees per company to claim the subsidy because all employees are paying to the Employment Insurance System (EIS). They are also asking for the government to allow for businesses taking the wage subsidy for its employees to re-negotiate salaries.

“To qualify for the subsidy, we ask the government to remove conditions attached to the mutual reduction of wages between employers and employees to ensure survival in the private sector, ” he said.The 12 associations and trade bodies involved in the appeal are the Asean Retail-Chains and

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) as well as Malaysia Digital Chamber of Commerce (MDCC).

The others are Malaysian Hairdressing Association (MHA), MRA, Malaysia Retail Chain Association (MRCA), McMillan Woods Association, the SME Association of Malaysia as well as Maju Malaysia Entrepreneur Association (PUMM).

The Star, 30 April 2020 (Thursday)