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Employment Issues During MCO in Malaysia

by Zurainny Ismail   ·  1 year ago   ·  

Since the announcement of the MCO by the PM on 16th March 2020, there has been an explosion of employment issues during the Movement Control Order (MCO) in Malaysia. This will continue until, and probably even after, more than 80% of the population have been fully vaccinated.

More than 600,000 households from the middle 40% (M40) income group have slipped into the bottom 40% (B40) category ….

The above alarming figures of the economic decline of the M40 workforce have been widely quoted and shared. But what has our government done, if not to improve the condition then at least, to decrease the momentum?

We honestly don’t know.

Certainly it requires a holistic and cohesive approach involving all stakeholders. More than the occasional food baskets, conditional moratorium, etc.

At the start of MCO last year, the President of SME Association of Malaysia predicted that at least 50% of SMEs will close down and expects more than 4 million people will lose their job. While many thought that he was being overly pessimistic, until the economy recovers and this pandemic ends, we cannot say for certain that he is wrong. We certainly do hope so.

We don’t know whether the current statistics by DOSM shows the reality on the ground. But it’s not hard to believe seeing that the median monthly salary has dropped 15.6% to RM2,062 for the first time since 2010. The fact is, most of us know someone who has lost their job or have a reduced household income since the start of the MCO. So, it’s not too far-fetched.

We can’t mention all the employment issues here, because there are simply too many. For a rough idea, have a look at the comment sections of our most popular employment articles such as:

  1. Soalan Undang-Undang Anda
  2. Employment Act 1955
  3. Undang-Undang Buruh : Masa Kerja dan Kerja Lebih Masa
  4. Ordinan Buruh Sabah
  5. Aduan Kepada Jabatan Tenaga Kerja

We appreciate the fact that the government has and is working to address some of the issues. But here are just a few of the many issues that linger even after many episodes and varieties of the MCOs. We hope our readers will gain some benefits from this article.

Not All Are Equal

We are employees. During the early days of MCO, one of us worked from home, while the other went to work as usual (minus the traffic jam, of course). And we were fortunate, because we get paid in full throughout all the many periods of the various MCOs (CMCO, RMCO, etc). But not all are as fortunate.

Working from Home (Photo by Standsome Worklifestyle on Unsplash)

Some employees can’t go to work and also can’t perform their duties from home. And to make matters worse, their employers don’t get any revenue during the MCO and still have to shoulder other business costs such as rental and wages. On top of that, businesses also lost their customers, and only contemplates a bleak post-MCO future prospects.

As we can see, when employers feel cornered and unsupported, and they do not believe their business will improve any time soon, they resort to closing down their business. Many hotels and businesses have already decided to call it a day. Hence, their workers lost their jobs.

There is obviously no one-size-fits-all solution.

We would like to propose that for companies that can provide proof of such issues (no revenue, can’t operate, etc), they’d be given preferential or extra assistance by the government especially in respect of support for their employees and other forms of assistance (eg technological upgrade assistance, marketing, etc). The many government agencies may be able to lend a hand.

Employment Insurance Scheme

Subject to the eligibility, the retrenched/terminated workers will be entitled to Employment Insurance Scheme (EIS), but the allowance are only as follows:

  • 1st month, 80% of assumed wage (capped at a maximum of RM4,000)
  • 2nd month, 50% of assumed wage
  • 3rd and 4th month, 40% of assumed wage
  • 5th and 6th month, 30% of assumed wage

The ‘Assumed Wages’ can be estimated using EIS Calculator. It’s not a replacement of salary lost, but a helping hand. To be eligible:

  • Make sure application is made within 50 days of loss of employment;
  • Have made at least 12 months contribution.

Besides monetary assistance, there are other benefits and conditions attached to the benefits. SOCSO will also try to help them with their job search. However, in these difficult times, getting a job would be an uphill task.

Unfortunately, those who lost their job due to expiry of their Fixed Term contract are not eligible.

Which to us is not fair, as they also need assistance. We feel that if they can prove that they have tried to get another job at least 3 months before the expiry of their FT contract and fulfil the conditions, they should be eligible. Proof could be in the forms of letters of applications sent, online applications, interviews attended, etc. This is one of the areas of the EIS Act that must be improved.

Amendment to the EIS Act is imperative, as well as awareness programs to employees on their rights.

MOHR/JTK’s Press Statements and FAQ

Last year, the Minister of Human Resource has issued many press statements, and the Labour Department/Jabatan Tenaga Kerja (JTK) has released a couple of FAQs which were widely circulated via social media, WA, etc. Some were said to be fake, while those that came out after the YB Minister’s press statement are believed to be genuine.

Mostly, they focused on what employers cannot or must not do. Various parties, including legal experts have debated on the enforceability of the press statements and FAQs under the law. The consensus was that the FAQs do not have the force of law. It was a grey area which intrigued many lawyers and caused headaches to employers.

Employers’ Stand

We understand that the (then) honourable YB Minister’s intention was to protect employees against being taken advantage of by rich employers. Unfortunately, most of the employers in Malaysia, according to the Malaysian Employers Federation’s (MEF) Executive Director, Datuk Samsuddin Bardan, are SME. In fact, he said:

  • 98.8% of businesses in Malaysia are SMEs.
  • Out of those, 60% are micro enterprises, having 5 or less workers

In short, most are ‘kais pagi, makan pagi’ kind of employers. Think of the grocery stores, the stalls, the small restaurants, etc. Don’t just think of GLCs, MNCs or the huge corporations. During this prolonged and repetitive MCO period, while they are not able to conduct their daily business, they can’t even feed themselves, let alone pay their workers’ salary. Is it fair to impose such a tremendous burden on such employers?

We are not saying that they are entitled to cut corners or break the law. Such as doing the acts below.

Employers Who Deduct Employees’ Annual Leave, Sick Leave and Various Creative Endeavours

In Malaysia and most of the Commonwealth countries, there is security of tenure in employment, i.e. a person’s right to work is sacrosanct. Employers cannot simply fire an employee without reasonable cause, i.e. misconduct, poor performance, etc. Even then, an employer must follow proper procedures such as notices, warning letters, show cause letters, and so forth.

Consequently, an employee’s entitlements which come with his service, such as annual leave (AL), sick leave (SL), etc, are considered as his property. Which also means, an employer who takes away those AL and SL, for example, without the employee’s consent, could be considered to have unlawfully taken away the employee’s property.

Employees’ Right to Complaint

Employees have a right to lodge a complaint at the Labour Office/JTK when they are forced to sacrifice their AL or have their salary reduced. However, we would like to urge that they also look at the overall situation faced by their company first before doing so.

For instance, if the company truly is suffering financial constraints, they should work together with the management to get the business back on track. In this way, the company can continue to survive and they will continue to get a paycheck at the end of the month, even if their pay is less than usual. Being on unpaid leave is better than being retrenched.

Nonetheless, employees should lodge a complaint immediately to address the injustice if the company is conducting such cost-cutting exercise although:

  1. it is clearly doing well, or
  2. business is not much adversely affected.

Absence of Tripartite Consensus

MOHR/JTK acts as guardian/enforcer of those rights. MOHR/JTK’s powers are based on the law (e.g. Employment Act 1955, Sabah Labour Ordinance or Sarawak Labour Ordinance, etc) and also referring to the employee’s contract of employment. But MOHR/JTK is also a mediator between employer & employee. When there are disputes between employee and employer, the JTK must consider the whole facts of the case.

In the early days of the MCO, the MEF stand was, among others, ‘no work, no pay’ because it referred to S.2 on definition of “wages”, that it is payment for work done. Therefore, when there is no work, there is no pay.

However, for the sake of industrial harmony, MEF encouraged employers to share the burden with employees. Hence, in its widely circulated circular dated 17th March 2020, it recommended the following formula during the first 2 weeks of MCO:

  • employees to apply for 5 days of AL (preferably with employees’ consent) while employers pay for the 9 days (MEF circular AG08/2020).

Equal Sharing of Burden?

MEF actually also proposed an equal sharing of the costs between employers, employees and the government. The problem was, even if such sharing is possible and a fair mechanism is available, some companies may still not be able to afford continuing with their business.

Currently, there is no consensus between MOHR/MTUC, MEF & the legal community about those issues. And there is also no definitive legal precedent in Malaysia to refer to. All we can do is make assumptions based on bits and pieces from various caselaws.

We predict that big companies will bring this question to the higher courts, if MOHR/JTK insists that it is wrong to deduct pay, ask staff to take AL or no-pay leave, etc, during this prolonged MCO period.

Some companies, prefer not to fight. Instead, they have announced closure of their businesses.


On the other hand, the fact that:

  1. the Government provided RM600 subsidy for employee who were on a minimum of 1 month no-pay leave last year (a subsidy which must be applied by the employer) and
  2. our PM also encouraged ‘perundingan‘ between parties

seem to indicate that the government was not totally against it, provided the employer can obtain employee’s consent.

At the end of the day, each company must decide which steps to take based on its financial capabilities, future strategic planning, business needs, etc., to ensure the business survives, for the benefit of its workforce as well.

We believe that transparency and honesty with their workers are best.

Workers’ Perspectives

We hear many versions of employees’ perspectives.

One that stood out for me was about an employee who was not working at all because the branch she’s at was closed during MCO. She ranted on her FB because her employer paid her less than the usual wages while her other colleagues who worked at another outlet which operated as usual received their normal salary. She even remembered to quote the JTK’s FAQ.

On the other end, employees who had to work during MCO were asking for extra allowance. This usually happen in cases where MITI only allows 50% or less of the usual workforce and therefore the company may have to pick and choose.

Come on guys, the fact that you are picked to work means you are necessary. So, treat it as an opportunity to prove to your company that you are an excellent worker. Be proactive and supportive!

And if you believe that you deserve better, find the courage to seek other opportunities. Or instead of complaining on the social media which only hurts your reputation, reach out to JTK for advice.

Workers refusing to come to work for fear of Covid-19

Many employers are complaining that although they have obtained permission from the Ministry of International Trade and Industry (MITI) to operate during MCO, some employees still refused to come to work, citing fear for their safety and health due to Covid-19.

Is ‘fear of contracting Covid-19’ a reasonable excuse to be absent from work?


When you are called to return to work, as long as your employer practices the SOP and guidelines stated by MITI (or whichever authorities that gave them that permission), you are duty-bound to work or else:

  • face disciplinary action for insubordination and get no salary during those days of absence, or,
  • lose your job, if you are absent for more than 2 working days consecutively, you shall be deemed to have broken your contract of service, unless you have reasonable excuse for that absence and have informed or attempted to inform your employer of such excuse prior to your absence (refer to S.15(2) of EA/S.13A(2) of SLO).

Fear is normal and necessary because it forces us to be extra careful. However, if you value your job and your salary, our advice is for you to work diligently and contribute to the wellbeing of your company. Hey, you are not the only ones required to work! Think of all the frontliners and the risks that they face on a daily basis!

If you really don’t want your job and your salary, kindly resign properly. There are 742,700 persons currently unemployed (as at June 2021). 80% of them are actively unemployed, meaning available for work and actively seeking jobs, and are eager to fill your shoes. Not to mention those whose are still working but whose income has been greatly reduced such as those from the hospitality industry.

What if the Employer Doesn’t Practice the SOP?

In the event your employer is reckless and fails to comply with the SOP, please immediately report to the authorities. For ideas on how to report, you can read this news report . The employees made video recordings, took photos and made anonymous complaints. Act fast.

There are calls for mandatory Covid-19 testing for employees who have to work during these times. That should allay some of the workers’ fears, hopefully. If only those tests are not so expensive or the costs are born by the Government.

What can employees do to protect their job? Are employees helpless?

Not necessarily. Employees can help their employers, if their employers are being truthful and transparent. There are many stories about how employees worked together to help their company survive bankruptcy and closure.

Most importantly, please DO NOT post on the social media such as FB if you are unhappy with your employer. It will do you no good except:

  • to show that you are unprofessional
  • damage your future career prospects as no employer will hire an employee who could will talk bad about their employer/company publicly
  • will hurt your relationship with others, especially with your current employer.

We are not saying that employees should stay mute and helpless. But we do encourage employees to be professional and reasonable. By all means, do lodge a complaint with the JTK if:

  • you have nicely put forward to your employer your concerns and your employer’s response is unsatisfactory and unreasonable
  • you believe your employer is being nasty, unfair and the company is enjoying a huge profit
  • your company can brilliantly sail through this Covid-19 period unscathed and the future of the company is secure
  • a majority of your colleagues agree with you and will join you in making the complaint

If not, better not to proceed and instead find ways to improve the situation.

Those who are still able to earn their normal wages in full are the lucky ones. Some can work from home, which means savings in terms of commuting time and costs. No one begrudges them their fortune. However, we do hope that the frontliners’ and all civil servants who have to work extra hard during these unprecedented times are given extra support.

What Should Employers Do?

Engage with employees truthfully and transparently. Help them to understand the company’s situation. Listen to them, so that you understand your employees’ situation. Work together to find the best solutions.

Moving Forward

Before Covid, the MOHR has organised many tripartite discussions in respect of amendments to various labour laws. It proves that the parties can sit together and discuss crucial matters. As such, it should not be impossible for the government to engage with the various employers and employees organisations/unions in the spirit of cooperation and long-term well-being of the nation.

We are certain that together, they can come up with the best ways to address most issues fairly.



  1. Jiej Lajim

    Hai Zurainny,
    Ya, indeed i agree with you. Some majikan jadikan alasan tak boleh beroperasi untuk buang pekerja since no profit made and paling teruk they never bother the law either employment or industrial..pakai pemikiran mereka saja. I think sudah tiba masanya untuk government lihat semula law yang ada ni, for ‘win-win situation’ sake.

    BTW, i love ur articles….tq so much, sangat membantu untuk saya cari bahan rujukan since i’m now tengah study HR.

    1. Zurainny Ismail

      Hai Jiej,
      Thanks so much for dropping by DLSL. I wish you all the best in your studies!
      HR is an interesting and important subject, much undervalued in many organisations. Isu HR ni ada mcm2, dr perspektif pekerja dan majikan. Kena cari balance between the two. With more awareness and training programs organised by the relevant authorities, we will definitely see improvement in labour practices.

  2. Pandemic ni memang benar-benar memberi tamparan hebat kepada semua orang. Yg masih tak percaya tentng kewujudan covid ni…hmmm x tau laa nak cakap. Agakanya jenis yg lahir2 je terus dalam ‘sudu perak’ duduk (silver spoon) dan mmg x kisah dgn apa yg berlaku di sekeliling mereka.

    eh terkeluar dr topik pulak sy ni hehehe

    1. Don’t know what to say Anies about such people… ada yg lebih bernasib baik dr yg lain. Tapi bila tengok statistik & news, mmg majoriti adversely affected by the pandemic. Insya-Allah, things will get better.


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