COVID-19: When Companies Go Viral

As the COVID-19 crisis continues to plague the Nation, various organisations have taken steps to reduce the risk of COVID-19 spreading further.

The Catholic Church has issued a two-week suspension on congregations in Peninsular Malaysia.  

UiTM has postponed the convocation ceremony originally scheduled from March 24 to April 16, 2020.

The effort taken by organisations, such as the aforementioned, in acknowledging that there is a crisis and that there is a need to take steps to contain this crisis, is certainly commendable. 

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However, there are certain entities and individuals (particularly, small and medium enterprises, small incorporated or unincorporated companies) that simply cannot afford to take similar steps. 

To a certain degree, this is understandable. The fear of losing your job or business is, arguably, more tangible or considerable, as compared to the fear of losing yourself to disease. 

On the one hand, if you lose your job or business, you have to live with the same, and on the other, if you lose your battle with a disease, you do not have to live with it (pun not intended at all).

So, what must companies do amid this crisis?

Do companies have duties and liability in the spread of infectious diseases, such as COVID-19?

The Companies Act 2016 is a major improvement from its predecessor, the Companies Act 1965. However, it does not expressly address the duties and liability of companies when facing this crisis. 

So, what can we resort to in determining this issue?

To ascertain this, we need to look at the laws in Malaysia like how you peel an onion – layer by layer. 

In Malaysia, a legal duty can either be a statutory duty or a common law duty – the former being formulated by, amongst others, the Legislative through statutes or regulations arising thereto, while the latter being formulated through court decisions. 

STATUTORY DUTIES 

In terms of the written laws, two statutes go hand in hand – the Prevention and Control of Infectious Diseases Act 1988 (“PCIDA”) and the Occupational Safety and Health Act 1994 (“OSHA”).

PCIDA

In general, Section 12(1) of PCIDA provides that:-

“No person who knows or has reason to believe that he is suffering from an infectious disease shall expose other persons to the risk of infection by his presence or conduct in any public place or any other place used in common by persons other than the members of his own family or household.”

[For the avoidance of doubt, reference to “person” here, according to Section 3 of the Interpretation Acts 1948 and 1967, includes “…a body of persons, corporate or unincorporate…”]

Any person who contravenes Section 12(1) of PCIDA shall, upon conviction, be liable to a fine and/or imprisonment pursuant to Section 24 of PCIDA, as follows:-

“…in respect of a first offence… imprisonment for a term not exceeding two years or to fine or to both…”

“…in respect of a second or subsequent offence… imprisonment not exceeding five years or to fine or to both…”

“…in respect of a continuing offence… a further fine not exceeding two hundred ringgit for every day during which such offence continues.”

OSHA

While PCIDA provides the general duties of person, OSHA goes further by prescribing the ‘standards’ to be subscribed by companies in dealing with this crisis. Section 17(1) of OSHA provides the general duties of employers to persons other than their employees, as follows:-

“It shall be the duty of every employer and every self-employed person to conduct his undertaking such a manner as to ensure, so far as is practicable, that he and other persons, not being his employees, who may be affected thereby are not thereby exposed to risks to their safety or health.”

In this regard, ‘practicable’, according to Section 3(1) of OSHA, means:-

“…practicable having regard to –

the severity of the hazard or risk in questions;

the state of knowledge about the hazard or risk and any way of removing or mitigating the hazard or risk;

the availability and suitability of ways to remove or mitigate the hazard or risk; and

the cost of removing or mitigating the hazard or risk…”

Although a company, being an employer, can be convicted for contravening Section 17(1) of OSHA, such company “…shall only be liable to the imposition of a fine provided therefor.” [See Section 56 of OSHA]

Instead, “…every person who at the time of the commission of the offence is a director, manager, secretary or other like officer of the body shall be deemed to have contravened the provision and may be charged jointly in the same proceedings with the body corporate or severally, and every such director, manager, secretary or other like officer of body corporate shall be deemed to be guilty of the offence.” [See Section 52(1) of OSHA]

In this regard, such director, manager, secretary or other like officer of the body may, pursuant to Section 19 of OSHA, “…be liable to a fine not exceeding fifty thousand ringgit or to imprisonment for a term not exceeding two years or to both…”, upon conviction.

COMMON LAW DUTY

A company can be held liable for negligence if:-

• the company has a duty of care to the victim; 
• the company has breached the said duty of care;
• the breach resulted in injury to the victim; and
• the breach of the said duty and the injury are not too remote.

[See Arab-Malaysian Finance Bhd v Steven Phoa Cheng Loon & Ors [2003] 1 MLJ 567; see also my previous article on “Covid-19: Class Action Against Patient Zero” for a more detailed discussion on the factors that need to be established, as set out in subparagraphs 1 to 4 above, in order to hold a person or an entity liable for negligence]

From the provisions of PCIDA and OSHA as mentioned above, it is arguable that a company has a duty of care to contain the spread of COVID-19. 

But, to what extent? 

And, in what form?

A company in the field of event management cannot certainly be imposed a duty of care similar to that of a medical practitioner.

Nor would it be fair to impose a duty of care on companies manning, for example, shopping malls to spray disinfectants in every nook and cranny of the premises and/or to close the malls altogether. 

That would simply be arbitrarily costly. 

As such, the duty of care that may be imposed on a company invariably depends on the facts and circumstances of each case. 

Although not in relation to an action for negligence against a company, the case of Master Brisbane ak Itang v Robinson Lee (c/o Sekolah Kebangsaan (Cina) Sungai Menyan) & Ors [2013] 5 MLJ 604 (HC) (“Master Brisbane case”) can be referred to in ascertaining the duty of care that could be imposed on a party for being negligent in the spread of an infectious disease. In the Master Brisbane case:-

The Plaintiff was diagnosed to have been infected with the Japanese Encephalitis (“JE”) virus when he was at a boarding school;

As a result of contracting the JE virus, the Plaintiff was left with brain damage and required lifetime care;

Aggrieved, the Plaintiff brought an action against, amongst others, the teachers at the boarding school and the Ministry of Health. In this regard, the Plaintiff alleged, amongst others, that the Defendants were negligent in failing to ensure that the Plaintiff was vaccinated against the JE virus;

Although the High Court declared that the teachers, amongst others, owed a duty of care to the Plaintiff:-Such duty of care is confined to only ensuring that the boarding school was clean, safe and conducive for the Plaintiff to study and stay. In this regard:-

The teachers were not expected to treat the Plaintiff for his fever or to know that the Plaintiff had been infected with the JE virus as they were not medically qualified and not trained as such;

Further, the teachers were not directed nor did they receive any directive to bring the students at the boarding school (including the Plaintiff) to be vaccinated against the JE virus.

there was no evidence that the teachers had breached the duty of care of ensuring that the boarding school was clean, safe and conducive for the Plaintiff to study and stay.

[Please note that the claims against the teachers were later abandoned at the hearing of the Plaintiff’s appeal at the Court of Appeal –  see Master Brisbane ak Itang v Robinson Lee (c/o Sekolah Kebangsaan (Cina) Sungai Menyan) & Ors [2014] 1 CLJ 726]

Based on the Master Brisbane case, it appears that:- 

any directives issued by the relevant Ministry (such as the Ministry of Health and the Ministry of Human Resources) and circulated publicly; and 

the skills, expertise and experience that the particular company has,

could be used as a measuring tape to ascertain the extent of the duty of care that ought to be imposed on companies.

In this regard, over the past few weeks, the relevant Ministries have issued several directives and guidelines in dealing with the COVID-19 crisis which may be helpful in determining the reasonable steps that companies ought to take, including as follows:-

Guidelines on COVID-19 Management in Malaysia No. 04/2020 (Fourth Edition) (issued by the Ministry of Health); 

‘Arahan Pematuhan Kepada Akta Keselamatan Dan Kesihatan Pekerjaan (AKKP) 1994 Berkaitan Langkah-Langkah Pencegahan Terhadap Wabak Jangkitan Coronavirus’ (issued by the Ministry of Human Resource); and

‘Tips Kesihatan’ (issued by the Ministry of Health via text messages), as can be seen below.

In summary, the said directives or guidelines require/recommend employers (which include companies):-

• to ensure that the employers and employees observe high standards of personal hygiene (for example, washing hands with water and soap or hand sanitizer at a frequent rate);
• to ensure that employees are given proper personal protective equipment (for example, face masks);
• to identify employees who have travelled to the affected countries and/or who exhibit symptoms such as fever, cough and difficulties in breathing;
• to postpone travels to affected countries (for example, Mainland China, South Korea, Japan and Italy) unless for urgent, unavoidable matters; 
• to comply with the quarantine orders (as issued by the authorized officer pursuant to Section 15 of OSHA).

The failure of a company in adhering to the standards provided in the directives or guidelines issued by the relevant Ministries above could, arguably, be taken as evidence of a breach of a duty of care in view that the said directives or guidelines were circulated publicly.

CONCLUSION

The duties of companies in ensuring that the spread of COVID-19 is contained are not only entrenched in the laws, but are also ingrained in the civic values of our Nation. Controlling the spread of COVID-19 will only work if a collective effort is made by every party.