Part II of the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (Covid-19) Act 2020 (“Covid Act”), which relieves contracting parties with inability to perform contractual obligations, has come into operation retrospectively on 18 March 2020 upon the enforcement of Covid Act on 23 October 2020. In June 2021, the former Minister in the Prime Minister’s Department (Parliament and Law) – Datuk Seri Takiyuddin Bin Hassan made another extension order to extend the operation period of Part II from 1 July 2021 to 31 December 2021. Thus, for the time being, Part II protection is still available to eligible businesses at least until the end of this year.
It is a standard practice in the hotel industry to collect a 10% service charge from the customers in place of a tipping system, which will in turn be distributed to the eligible employees. This seemingly explains why the hotel industry employees were paid low basic salary, because they would be compensated with the income earned from service charge.
On 11 January 2021, the Yang di-Pertuan Agong declared a nationwide state of emergency that will be enforced until 1 August 2021 (“Proclamation of Emergency”). To understand the effect of such proclamation, it is necessary to take a glimpse into the foundation of the Federal Constitution (“FC”).
These FAQs focus on the impacts of two Parts of the COVID-19 Act – the ‘Inability to Perform Contractual Obligation’ and the ‘Modification made to Distress Act 1951’ – concerning leases and tenancy agreements of non-residential immovable properties.