Covid-19: 100 restaurant owners tell govt to come up with contingency plan before they are forced to shut down

Malaysian Armed Forces and police personnel are seen at one of the roadblocks in Kuala Lumpur March 22, 2020. — Picture by Shafwan Zaidon
Malaysian Armed Forces and police personnel are seen at one of the roadblocks in Kuala Lumpur March 22, 2020. — Picture by Shafwan Zaidon

KUALA LUMPUR, March 22 — Independent food and beverage business owners today pleaded to the government to help save their livelihoods by coming up with an economic contingency plan to prevent them from going bust during this movement control order (MCO) period.

In a statement, today signed by 100 outlet owners and written by the owner of the Yellow Brick Road Cafe, Lin Lee, several measures were proposed by the group for the government to consider implementing.

“Consider new forms of financial assistance for employees who are affected by pay-cuts or other temporary measures that employers are pressured to implement, as well as direct assistance for employers who will otherwise be forced to shut their businesses as they have no means to pay wages and other expenses.

“Provide income tax relief for all affected employees as well as businesses, revise the financing rate of the RM2 billion Special Assistance facility to ease the short-term cash-flows of SMEs affected by Covid-19,” Lin wrote, adding that the maximum financing rate of 3.75 per cent per annum currently will not be viable for many businesses under the current circumstances.

Lin said that while the business owners supported the government’s decision to implement MCO, their earnings were already affected prior to the Covid-19 outbreak, leaving them with little financial reserves to weather out the remaining MCO period.

“Thus, with the MCO in place, we now face severely diminished sales coupled with normal costs of doing business, including ongoing obligations to pay rent, supply bills, wages, allowances, as well as other costs.

“What has also not been addressed so far is the possibility of a prolonged public health crisis as well as an extension or intensification of the MCO beyond March 31. The welfare of our employees is a central factor in the health of our businesses, and we are doing our very best to avoid any lay-off or retrenchment,” she said.

Lin also urged the government to give serious thought to the proposals recently put forward by the Malaysian Employers Federation (MEF), which she said reflects a balanced consideration between employers and employees.

Earlier today, The Star quoted the Malaysian Employers Federation (MEF) as saying that the recent statement by Senior Minister of Defence, Datuk Seri Ismail Sabri Yaakob, that all private sector employers must pay their workers’ salary during the MCO period, has no force of law.

“There is the question of whether employers are legally obliged to pay salaries throughout the fourteen-day MCO. This is a situation of force majeure, a frustration of contract, an event that is beyond the reasonable control of either employer or employee. In this kind of situation, either party has the right to nullify the contract,” MEF executive director Datuk Shamsuddin Bardan was quoted saying.

The report said that MEF had also proposed for flexibility with unpaid leave, at a recent meeting with Human Resources Minister Datuk Seri M. Saravanan.

“We suggested that employees be given the option to apply for unpaid leave, or to take annual leave during the MCO.

“In the situation that employees do not want to take annual or unpaid leave, and their employers do not wish to pay salaries during the MCO, the Employee Retention Programme (ERP) under the Employment Insurance System should come in, and paid on a prorated basis if the unpaid leave period is less than 30 days,” MEF executive director Datuk Shamsuddin Bardan was quoted saying.

The ERP refers to one of the policies announced by Prime Minister Tan Sri Muhyiddin Yassin, whereby a special RM600 monthly aid would be paid out for workers on no-pay leave, for a period of six months.

In a press conference after chairing the first Economic Action Council (EAC) meeting last week, Muhyiddin said that the initiative is for those with an income not exceeding RM4,000 per month.

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