Movement Control Order (MCO): Common Employment Issues

To control the spread of the Coronavirus pandemic (Covid-19), the government announced the Movement Control Order (MCO) on 16.3.2020. Following this, many businesses are required to close their premises from 18th March to 14th April 2020.


This announcement has affected businesses and companies across the country, and has caused great concerns among both employers and employees. These are some frequently asked questions:




1. What is the Movement Control Order (MCO)?

Under the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 (“the Regulation”), only essential services are allowed to open during the MCO.


Essential services include Banking and finance, electricity and energy, fire, port, dock and airport services, postal, production, refining, storage, supply and distribution of fuel and lubricant, healthcare and medical, sewerage, radio communication, telecommunication, transport, water, e-Commerce, defence and security, food supply, custom, hotels and accommodations.


For these essential services, the employers must keep the personnel at the premise to the minimum. In other words, only staffs who are necessary to carry out the operations should attend the premises. If your business does not belong to any of the above categories, you may only continue running your business with prior written permission of the Director General.



2. What happen if a business fails to comply with the Regulation?

Failure to comply with the Regulation will amount to an offence which carries a fine up to RM1,000, and/or imprisonment up to 6 months. People who are managing the organization, such as director or manager can be personally charged for the offence.



3. What are the employers’ responsibilities in ensuring workplace safety?

Under the Occupational Safety and Health Act 1994, employers have an obligation to ensure the safety, health, and welfare of all their employees at work. Based on the FAQ guideline on Movement Control Order issued by the Ministry of Human Resources on 19.3.2020 (“MCO Guideline”), employers should:


  • Read and measure the employees’ body temperatures everyday
  • Comply with the Covid-19 prevention procedures issued by the Ministry of Health from time to time
  • Prepare hand sanitizer
  • Carry out necessary sanitizing and cleaning process
  • Ensure that the social distancing practice guidelines are in place and implemented.

Although the MCO Guideline does not impose a legal obligation, employers are advised to follow it in ensuring employees’ health and safety.



4. Can the employers force the employees to take unpaid leave?

No, the employers cannot force employees to take unpaid leave, and must continue to pay their employees in full, and in accordance with the employment contract during this movement control period.


Having said that, employers will have no obligations to pay employees working in the essential services who refuse to come to work during this MCO period.



5. If the business is facing financial loss due to Covid-19, can the employer cut the employees’ salary or dismiss employees?

It should be noted that a salary cut or dismissal without the employees’ consent may expose the employers to breach of contract or unfair dismissal claims.

However, if the company is facing financial difficulty and a retrenchment is unavoidable, the employers are advised to refer to the Code of Conduct for Industrial Harmony 1975, or the “Guidelines on Retrenchment Management” issued by the Minister of Human Resources.


Generally, employers should first take the following steps before retrenchment:

  • Restrict overtime working
  • Reduce working day in a week
  • Reduce working hours in a day
  • Temporary layoff, provided that reasonable pay is given to the employee, and assistance is provided to the employee in searching for a temporary job
  • Pay-cut as a last resort

Before the retrenchment, employers are also encouraged to have a discussion with the employees or the relevant representatives. It is important that proper communication is carried out to avoid legal disputes. 



Disclaimer: This article is intended for general informational and education purposes only and not for the purpose of providing legal and professional advice. The accuracy of the article is also subject to any policies and guidelines that yet to be imposed by the relevant authorities. Have a question on the Malaysian Employment law? Contact members of Chern & Co. at



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