Data Protection Update: Appointment of New Personal Data Protection Commissioner; Amendment of the Personal Data Protection (Class of Data Users) Order; and Approval of Codes of Practice for the Insurance and Banking Data User Forums

The Minister of Communications and Multimedia has recently appointed a new Personal Data Protection Commissioner to oversee the implementation and enforcement of the Malaysian Personal Data Protection Act 2010 ("PDPA"). Commissioner Puan Khalidah binti Mohd Darus assumed her office on 23 January 2017.

In a related development, the Personal Data Protection (Class of Data Users) (Amendment) Order 2016 ("Amendment Order") came into operation on 16 December 2016. The Amendment Order added several classes of data users that are required to register themselves with the Personal Data Protection Department. These include licensees under the Pawnbrokers Act 1972 and licensees under the Moneylenders Act 1951.

The Commissioner has approved and registered three Personal Data Protection Codes of Practice (“Codes”) to date, i.e. for the utilities sector (electricity), insurance / takaful industry sector, and the banking and financial sector. Companies falling within these sectors are required to re-examine their existing data protection notices, policies, procedures, and practices, as well as their internal operations, in order to ensure that the relevant Codes are fully operationalised within their respective companies / organisations.

It is expected that the first instances of enforcement of the PDPA will occur in Q2 or Q3 of this year.

Further details on this can be found in our update which can be accessed here.

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Malayan Banking Berhad v Mahkamah Perusahaan Malaysia & Anor - Employer’s Liability for Fixed-Term Contracts

The High Court in the case of Malayan Banking Berhad v Mahkamah Perusahaan Malaysia & Anor [2017] 2 CLJ 70 clarified the remedies available to a fixed-term contract employee in an action for unfair dismissal. In such an action, an employer's liability for a fixed-term contract employee will be limited to the unexpired term of their contract. The employee's post-dismissal earnings will also be considered in rescaling the employer's liability.

In this case, the employee was on a 12-month fixed-term contract with a 6-month probationary period. At the end of the probationary period, the employee was not confirmed and she pursued an action for unfair dismissal against her employer. The Industrial Court ruled in favour of the employee and awarded back wages of 12 months with a rescaling of 20% for post-dismissal earnings.

The employer filed an application for judicial review against the Industrial Court's decision, arguing that even if the employee had completed her probationary period, her employment would have still be terminated upon expiry of the contract. The High Court agreed with the employer and awarded the employee back wages of 5 months and 2 weeks instead. The back wages was also rescaled by 40% for post-dismissal earnings as she was earning almost 3 times her salary before she was dismissed.

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First Phase of the Companies Act 2016 Operational

The first phase of the Companies Act 2016 ("CA 2016") came into operation on 31 January 2017 as notified in the Gazette. Several provisions in the CA 2016, including Section 241 of the Act relating to the requirement for company secretaries to register with the Registrar of Companies, and Division 8 of Part III relating to corporate rescue mechanisms on corporate voluntary arrangement and judicial management, have yet to be effective until the next phase of implementation.

With the first phase in operation, the previous Companies Act 1965 is repealed and companies will now need to comply with the new CA 2016 including requirements under the Companies Regulations 2017. Some of the key changes under the new CA 2016 include the abolition of par value shares; the simplification of the process of incorporation; the removal of the AGM requirement for private companies; the abolition of the requirement for memorandum and articles of association; the introduction of new alternative capital reduction procedures; new financial assistance regime; and new corporate rescue mechanisms.

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Employees' Insurance Scheme Approved by Cabinet

Human Resources Minister Richard Riot Jaem recently announced, while launching the Human Capital Strategic Initiatives by the Human Resource Development Fund ("HRDF"), that the Cabinet has approved a bill to create a special insurance programme for retrenched workers. The proposed Employees' Insurance Scheme bill ("EIS Bill") was approved by Cabinet on 17 March 2017. It was also reported that the Minister of Human Resources plans to table the proposed EIS Bill in Parliament in July.

Under the scheme, employers and employees are required to contribute towards the worker's insurance account, the same way they now do for Social Security Organisation ("SOCSO") coverage. The scheme seeks to assist retrenched workers by providing temporary financial assistance and opportunities for re-skilling and upskilling.

The proposed EIS Bill had not gone down well with the Malaysian Employers Federation ("MEF"), which claimed that the EIS Bill is not fair and would lead to increased costs that would burden private companies. Earlier this month, Minister Riot's deputy, Ismail Abdul Muttalib, told the Dewan Rakyat that the proposed EIS Bill was targeted for implementation next year.

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Gas Supply (Amendment) Act 2016 and Gas Supply (Amendment) Regulations 2017 Come into Operation

The Gas Supply (Amendment) Act 2016 ("Amendment Act") came into effect on 16 January 2017 in Malaysia. Subsequently, the Gas Supply (Amendment) Regulations 2017 came into operation on 16 February 2017, amending the Gas Supply Regulations 1997 to complement the amendments introduced by the Amendment Act. The Amendment Act widened the ambit of regulated activities in the gas supply industry. Another significant effect of the Amendment Act is that it enables third party access ("TPA") to regasification terminals ("RGTs"), transmission pipelines and distribution pipelines, thus liberalizing the gas supply industry.

The Regulated Activities

Prior to the Amendment Act coming into operation, the Gas Supply Act 1993 primarily regulated the downstream activities of the distribution, retail or use in the supply of gas between the licensee and consumer, through pipelines and piping system. Post-amendment, the regulatory scope of the Gas Supply Act has been extended to other activities comprising the importation into RGTs, regasification, shipping and transportation of gas. Pursuant to the Amendment Act,  parties involved or intending to participate in various aspects of the gas supply chain are now required to apply for a licence from the Energy Commission to carry out any of the following activities:

• Import into RGTs;
• regasification of gas;
• shipping of gas;
• transportation of gas;
• distribution of gas;
• retail of gas; and
• use of gas.

Third Party Access

For the purpose of liberalizing the gas supply industry, the Energy Commission has, as at the date of this update, developed and issued the following TPA codes and Guidelines:

• the TPA Code for regasification terminals;
• the TPA Code for transmission pipelines;
• the TPA Code for distributions pipeline
• Guidelines on Competition for the Malaysia Gas Market in relation to Market Definition, Anti-Competitive Agreements and Abuse of Dominant Position; and
• Guidelines on Licence Application.

Overall, the TPA regime, as introduced by the Amendment Act, will create a level playing field amongst the players in the gas market. This will encourage participation of new players and sets a platform for healthy competition in the Malaysian gas supply industry.

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