The Public Health Emergency Bill, Effects on Businesses

A sunset law has come into effect to enable special measures aimed at assisting individuals, families and businesses combat the adverse effects of Covid-19 pandemic and the subsequent imposition of the public health emergency in the country.

The name of the law is Public Health Emergency Act 2020.

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The law does three main tasks: introduces new measures in certain unregulated areas, overrides existing legislation in some areas and provides stop gap measures in remaining areas.

Here, we provide a quick summary of key provisions relevant to businesses.

Paid leave

The emergency legislation introduces a new form of leave related to Covid-19 and applies to employees placed in various situations.

Employees asked to quarantine themselves for coming either from overseas or a different island would be entitled to paid leave for the period they are prevented by quarantine restrictions to report to work.

Similarly, the leave applies to those who may be isolated or quarantined due to the onset of Covid related symptoms.

Every employee prevented to report to work due to movement restrictions between islands is also entitled for that leave.

Additionally, the leave is applicable to those employees confirmed to be positive to Covid-19.

Similarly, an employee whose dependent family member is either receiving treatment or who has to accompany that family member in isolation is also eligible for that leave.

There would be no requirement for submission of a medical certificate. Generally, the quarantine or isolation order issued by the director general of public health or under her authority should suffice as evidence to sanction the leave.

It may be noted that all these forms of leave are granted over and above the different forms of leave to which an employee is ordinarily and otherwise entitled to under the Employment Act.

Redundancy enabled

Under the Employment Act, an employer is generally restricted from either deferring payment of salary, effecting a reduction of the salary, subjecting an employee to furlough or unpaid leave, or even redundancy.

However, in overriding those rules, the current law allows those forms of action to be taken by the employer including redundancies – but in a controlled manner.

The above actions are considered justifiable in law only to the extent that the business experiences financial hardship due to the impact of Covid-19 causing its revenue to be impacted, and it becomes impracticable for a business to continue to provide salaries and benefits as before.

Within fourteen days from today, the Economic Ministry is required to publish regulations that shall contain benchmarks to define financial hardship for the purposes of this law.

Except for redundancy, the law asks the employer to consult with and get the agreement of the employees to reduce pay or being put on furlough.

In case of making an employee redundant, the law asks the employer to notify the financial circumstances of the business to its employees, explain that the business has reached a stage where it would have to consider redundancy, and inform the employees of the guidelines that would be implemented in identifying staff to be made redundant.

Redundancy may only be effected as a measure of restructuring the business to adjust to new circumstances, and no employee may be made redundant only to find that another person has been recruited to fill the same position.

In case an employee is made redundant, all to which the employee has become entitled in the form of unpaid salary, unpaid overtime, payment in lieu of unused leave, and all other dues must be settled.

In an event of dispute, the onus is on the employer to prove that the employer acted within the law.

Despite these protections given to employees, nothing in this law is to prevent an employer from taking action against an employee in the ordinary course of business as may be otherwise permitted under the Employment Act.

Every aggrieved employee may find redress via the employment tribunal. The timeframe provided in the law for filing claims against employers is the earlier of the two following dates: 90 days from the date action was taken against the employee or 30 days from the date the emergency is brought to an end – whichever happens earlier.

Debt enforcement

The sunset law prevents initiation or continuation of enforcement proceedings or any enforcement action as regards any unpaid debt that is secured by a mortgage on a dwelling, land or similar property. Any action taken before this law came into effect must now be frozen for a period extending to 60 days from the date the emergency is brought to an end.

Tax deadlines

The government is given the discretion to defer payment dates provided in tax laws and provide alternative deadlines. Where the government decides to defer payment dates for any tax, the government is to publish that decision in the government gazette including details on the period of deferment and alternative dates of payment.

Where any tax deadline is deferred by the government, MIRA is asked to defer deadlines to file returns in respect of that tax.

The law is clear that the accrued tax obligation is not waived or excused. It is only the obligation of payment that is deferred to another alternative date. The payment will become due and payable on the alternative deadline, and the government does have the right to proceed to claim that payment.

Electronic meetings

Where any action is required by law to be completed in person, the law sanctions audio and video link measures to be substituted to complete that act.

Where any application is filed with or any approval is given by a government agency, these may be carried out through electronic means. Government agencies are allowed to make necessary changes to the prescribed form to enable conduct of business via electronic means.

Physical delivery is also excused.

Annual reports

Where any financial statements, audit reports, or annual reports are required to be submitted by a certain deadline, the date is effectively suspended from the date the law comes into force. The period is considered suspended from the date the public health emergency was declared and would remain suspended till the emergency is brought to an end.

Prescribed acts

Where the law prescribes a deadline to complete certain acts, the deadline gets suspended from the date the law comes into effect (today) and would remain suspended till the date the emergency is brought to an end. The new deadline would be the 30th day from the date on which the emergency was brought to an end.


Apart from the above, the law also contains several key interventions of socioeconomic significance to the country.

This sunset law specific to Covid 19 became law today with its ratification by the president. The bill was enacted earlier by the country’s parliament on 6 September 2020.

About the AuthorNasheed & Co Law Firm is one of the leading corporate and commercial law firm in the Maldives, established in 1997. They are an efficient, convenient, and responsive firm of professionals providing a client-centric legal concierge service offering the full spectrum of corporate and commercial law advice assistance and support.

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