10 April 2020 wasn’t just Good Friday, it was also the day our Prime Minister announced MCO Phase 3 – which is another 2-week extension of the Movement Control Order until 28 April 2020. Crucially, the government is now allowing additional economic sectors (“AES“) to operate during the MCO period.
The MCO, which was initially about containing the spread of Covid-19, has by Phase 3, morphed into a quasi-economic policy where more businesses are allowed to operate on-site despite the rising death toll.
As a brief history of the sectors that were allowed to operate during the MCO:- MCO Phase 1 (18 – 31 March) saw 22 sectors listed as “essential services” allowed to operate as usual. Subsequently, throughout MCO Phase 1 and 2 (1 – 14 April), 10 “critical industries/factories” were allowed to apply to resume operations.
On 10 April, the government announced that additional sectors were allowed to apply to operate during the MCO Phase 3 period. In a media statement released yesterday Senior Minister (MITI) Datuk Seri Mohamed Azmin Ali said that from Monday (13 April), companies in the additional sectors listed may submit their applications for resumption of operation at http://www.application.miti.gov.my/login.
One of the sectors that may be allowed to operate is the legal sector, although it is not clear from the language used whether this would apply to law firms since “perkhidmatan berkaitan guaman“, translated as “services incidental to legal practice”, is not specifically defined in the media statement.
Since yesterday, some of the employers in these additional sectors are noticeably rushing at the opportunity to apply for resumption of operation, despite the fact that the outbreak is still not over yet.
Without supporting or opposing the move to implement AES, one thing is clear to me – we are left with a weekend of vaguery; a lot of questions with no answers to. It is likely that we will receive some answers in the coming week. For now, the following are a few caveats to the “resumption of operation” that can be deciphered from the media statement issued by MITI.
Caveats to the Application For Resumption Of Operation
- First thing to note is that companies in the selected sectors have to go through an application process before they are allowed to resume operation. An AES company who wishes to resume operation can submit their applications at http://www.application.miti.gov.my/login starting next Monday (13 April 2020), at 9am onwards. Applicants will then have to wait for approval before they can operate. Therefore, just because your industry is in the list of sectors does not mean that you are now allowed to work at the office.
- Only applications that fulfil certain “conditions” will be processed. This is stated in the second last paragraph of the media statement – “hanya permohonan yang menepati syarat dan lengkap sahaja akan diproses”. The said “conditions” are not stated in the media statement, we’ll have to wait and see what they are.
- It may take some time before the approval letters can be obtained. Some people have voiced their concerns that if all the eligible businesses apply for the resumption of operation, approvals may take so long to obtain that the application will be a fruitless exercise. Nevertheless, processing times may not be as time-consuming as envisaged considering that only applicants who meet the “conditions” will be further processed. Looking at previous applications for resumption of operation in MCO Phase 1, 84.36% of the applications received by MITI were processed before the end of the period. Further, more than half of the applications received by MITI were not approved. (see below).
- Successful applicants must then comply with a Standard Operating Procedure (SOP), in addition to guidelines set by other agencies from time to time. Failure to comply will not only result in immediate revocation of the operating permit but may also result in legal action being taken against the company. This is stated in the last paragraph of the media statement. However, no official SOP has been spotted.
- There is a possibility that you may not be able to withdraw from the obligations of the operating permit once you apply. As mentioned earlier, successful applicants are expected to comply with certain SOP and agency requirements. The media statement speaks only of revocation of operating permits upon non-compliance, however it does not mention whether successful applicants can subsequently “cancel” the operating permit or what the legal implications are for doing so. This is especially relevant to legal firms because the services that are essential for the effective functioning of a (typical civil) law firm remain closed during MCO Phase 3 i.e. (most of) court, land office, CCM, AIAC, MyIPO whereas stamp office is operating on half-day basis. There is a high chance that an opt-in law firm may change their mind about resuming operation on-site. The question then arises: Can a successful applicant close operations after they have been granted approval to operate? How will the government deal with withdrawals? (Note that in the previous phase, employees were given approval letters to travel to work).
- Lastly, employers who opt-in to operate during the MCO Phase 3 may have to fork out medical bills for their employees who are subsequently infected by reason of being in office. Not to mention the resulting insurance and employment claims, given that these AES employees are not in office by reason of government order (i.e. “essential services”), but by employer’s own initiative (by application).
Considering the uncertainties surrounding additional economic sectors, it may not be a good idea for companies listed to rush in and apply for resumption of operation this coming Monday. There are potential costs and liabilities to consider.