marcus van geyzel

COVID, MCO, and the Malaysian legal industry — Part 1: Money (paycuts, revenue), remote working, and technology

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This market report is brought to you by The Malaysian Lawyer, co-founded by Lee Shih and Marcus van Geyzel.

If asked to think back to March 2020, when Malaysia first went into “lockdown” or a “Movement Control Order” (MCO), Malaysians may feel like the period of time that has passed has been the equivalent of several lifetimes. Or that it now seems to have gone quickly, and certainly doesn’t seem like it was 18 months ago. Or perhaps that it simultaneously feels like both a very long time and a very short time ago, in that time-bending perspective-warping haze that the pandemic seems to have permanently brought into our lives.

For the Malaysian legal industry, much has happened. If we cast our minds back to those early-MCO days, there was a scramble for lawyers to figure out how to operate outside of the office, without access to printed documents and files.

To be honest, some lawyers still haven’t quite figured it out, but there has been much progress overall. Compelled by the judiciary, lawyers shuffled out of the Stone Age and into conducting video trials online. The National and State Bars successfully convened their AGMs online (after a huge COVID scare from the in-person KL Bar AGM). Law firms rolled out pay-cuts, and freezed hiring, increments, and bonuses. As work dried up in some areas, many lawyers pivoted into new practice areas. Call ceremonies also moved online. Aspiring lawyers had to deal with huge delays to CLP exams and results.

There were lots of new law blogs launched (21 are still active), and law students, lawyers and firms were noticeably more active on LinkedIn (when TML wrote about Malaysian law firms on LinkedIn in 2019, we could only find 8 active accounts; when researching our latest law firm LinkedIn list, we found almost 80!) and Clubhouse (the biggest Malaysian legal Clubhouse club “Malaysian legal community“ has 3,600+ members).

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Employee poor performance: Some recent cases

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The proper management of under-performing employees is always a tricky proposition. While the law recognises poor performance as one of the reasons that would constitute “just cause” for dismissing an employee, many employers make mistakes which result in dismissed employees winning unfair dismissal claims. There have also been instances where employees have been able to walk out and claim that they have been constructively dismissed due to the employer putting them on a performance improvement plan (“PIP”).

There are many variables that will determine whether a poor performance termination was carried out fairly. It’s always useful for employers and decision-makers to review how other employers have managed under-performing employees. In this article, I briefly summarise the following recent cases related to PIPs and poor performance dismissals:

  1. Azura Norden v. Small Medium Enterprise Development Bank Malaysia Berhad (Award No. 94 of 2021).
  2. Charles Selvam Andrew Francis v. Kebabangan Petroleum Operating Company Sdn Bhd (Award No. 256 of 2021).
  3. Thomas Kuruvilla v. Malaysia Digital Economy Corporation Sdn Bhd (Award No. 151 of 2021).

These summaries will provide valuable insights on the issues the Industrial Court considers when assessing performance-related terminations.

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HR Minister says employees could face fines or jail for refusing vaccinations. Is this legal?

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Malaysia’s Human Resources Minister M. Saravanan caused a stir late last week when he was widely reported (see Bernama, Malay Mail, The Star) as saying that action could be taken against employees who refuse to be vaccinated. While recognising that vaccinations have not been made mandatory under Malaysian law, Saravanan said that the authorities could take action under the Occupational Safety and Health Act 1994 (“OSHA”).

The legal position regarding mandating employee vaccinations has been widely-discussed in recent weeks, and I’ve previously shared my views on this blog (“Is it legal for Malaysian employers to make vaccinations mandatory for employees?”), as well as with the media (“Can Malaysian employers make Covid-19 vaccinations mandatory for their staff? Lawyers explain.”).

So what exactly does OSHA provide, and can the authorities really rely on OSHA to take action against employees who refuse to be vaccinated?

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Marcus on the Actsplore This podcast

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TML co-founder Marcus van Geyzel is on the latest episode of the Actsplore This podcast. It’s a casual and wide-ranging conversation, touching on honing your craft, overcoming fear, adopting the right mindset, and — above all — enjoying the ride.

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Case Update: Potential pitfalls where an employee is engaged by a Malaysian service provider for a foreign employer

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In this Case Update series, I share summaries of recent Malaysian court decisions to explore the current approach taken by the courts when deciding on employment-related issues. You can find all the posts in the series by clicking here, including case updates on other legal areas by TheMalaysianLawyer co-founder Lee Shih.

Technology has facilitated the increasingly global reach of many businesses, and now even small businesses find it easy to establish a multi-jurisdictional presence. This global footprint, plus the increasing popularity of remote-working arrangements which has been further accelerated by the COVID-19 pandemic has made it even more common for employers to hire employees in countries where they do not have a physical presence or legal entity.

Foreign companies use several options to engage individuals in Malaysia, broadly falling under the direct or indirect methods (or a combination). With the direct method, a foreign company would engage an individual directly, either as an employee or a contractor, using a contract either — (a) governed by Malaysian law; or (b) governed by the laws of the company’s home jurisdiction.

The indirect method is commonly known as “business process outsourcing” or “professional employer services” but also goes by many other names, and there are various interchangeable terminologies used. Essentially, this is a “third party employment” arrangement, whereby a foreign employer would engage a “local host employer” as a service provider, and this service provider would then engage the employees directly to perform services for the foreign employer. These local “professional employer organisations” would be responsible for arranging the payroll and statutory contributions and deductions for these “leased employees”, and would be the official “employer of record”. Using a local entity is unavoidable where the employee needs to apply for a work permit/visa.

I’ve advised employer clients on the engagement of employees using all of these options, and each of them have their respective advantages and disadvantages, and potential pitfalls for both employers and employees.

This article reviews the Industrial Court decision in Wong Wai Che vs. Quest BPO Sdn Bhd (Award No. 201 of 2021), involving an employee engaged by a foreign employer entity via a Malaysian service provider.

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Is it legal for Malaysian employers to make vaccinations mandatory for employees?

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The COVID-19 pandemic has brought up seemingly endless unique legal challenges for businesses and employers for the past 18 months, and counting. Beginning with lockdown and restrictions, remote working, paycuts, retrenchments and reorganisations, businesses in Malaysia and many other jurisdictions are now focusing on reopening, and hopefully moving into a post-pandemic future.

In recent weeks, we have been reading about the issue of mandating vaccines for employees. The legality of so-called “no jab no job” policies continues to be debated in major jurisdictions such as the UK, US, and Europe, where the reopening of the economy is at a more advanced stage than Malaysia, and where many companies have been implementing mandatory vaccination policies. Multinational companies with a Malaysian presence are now looking to roll out those policies in their Malaysian offices too. However, the law can be very different across jurisdictions, and employers will need to tread with caution and consider not just the legal but practical repercussions before making vaccinations mandatory for their employees.

In this article, I set out the legal position on this issue, and the key issues employers need to consider. I’ve also previously shared some of my views on this with The Malay Mail in their piece earlier this month — “Can Malaysian employers make Covid-19 vaccinations mandatory for their staff? Lawyers explain.”

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