LEGAL CONSEQUENCES OF COVID-19

The civil service may not have to worry about employment or salaries during and after the Movement Control Order (MCO).

The same may not be so for private sector employees. In fact, daily wage earners are already affected as businesses have been forced to close.

Companies may also resort to retrenchment, salary cuts and other measures.

Besides the economic consequences, a host of legal issues can arise – from contractual obligations to immigration issues such as visa renewal.

This is where the Home Ministry and the Immigration Department would want to monitor compassionately.

I do not know if the government will take the responsibility for the welfare of migrant workers or pass on the burden to the worker’s country. Besides humanitarian consideration, it may also involve international laws and trade treaties between the said nations.

The contracts of monthly wage earners may be subject to the Employment Act 1955. Issues such as retrenchment, wage cuts and forced annual leave may arise if their company is adversely affected by the MCO.

I cannot imagine the extent of the domino effect on the economic chain. The corresponding legal domino effect will see businesses trying to mitigate their legal losses.

It would certainly be tough to balance the welfare of the companies and the employees, especially when the business is adversely affected.

The financial aspect has always been a sensitive and difficult matter to handle. Hence, there may also be commercial contractual disputes ranging from the supply chain, the demand side or even ongoing or proposed joint ventures.

Some parties may use the pandemic as an excuse to get out of a contract. Some joint venture projects or terms of the contract may have to be revisited. These may require legal renegotiating or mediation.

The argument of whether Covid-19 may be considered a force majeure may also arise and would require looking into the contract document. Briefly, a force majeure clause in the contract may allow a party not to perform either the whole or part of the contract. There are many contracts without such a clause.

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Peace !