Business Law and Ethics

Element A: Article Review

Introduction

Provisions of a contract depict the obligations and conditions that need to be fulfilled by both parties. For analysing business law, ethics and governance, proper assessment of contract provisions is important. The present study has selected the legality element of the Contract Act 1950 Malaysia. Each and every contract has six specific and important elements to preserve. These elements are contractual offer, acceptance, consideration, legality, capacity and mutuality. Among these contract elements, the legality element is considerable for ensuring the terms to be compliant with contract law.

The legality element beholds the value factors for both parties. The values can be related to completing an action or refraining from action. The present study has summarised the legality elements of Contract Act 1950 Malaysia for understanding its depth and legal authenticity. Two cases have been selected and observed in the report for reviewing the practical interpretation of legal elements of the Contract Act 1950.

Summary of provisions of the contract

The Malaysian Contract 1950 sets out the legislative framework for governing the necessary steps for practising the actions of a contract to be performed by parties. The legality element of the Malaysia Contract Act 1950 specifies the legal agreements and actions for parties. As per the legality element of the Contract Act 1950, every agreement is a contract when it is developed with the free consent of parties competent to contract, with a lawful object and lawful consideration (Gov, 2022).

The legality element of this act also depicts that any person who has a sound mind and has the age of majority can sign a contract. Consent of parties is subject to consideration when consent is not made out of misinterpretation, fraud, undue influence, coercion and mistake (Gov, 2022). Additionally, parties to an agreement have the right to void a contract when it is developed without proper consent (Zain et al. 2019). The legality elements also define that Malaysian Court has the right to set aside those contracts that are developed under undue influence. The contract agreement is completely void when both parties have put the consent under the influence.

As per the legality provision of the Contract Act 1950, an agreement made from mistakes, cannot be void as that particular agreement is not made out of force or influence (Gov, 2022). On the other hand, any single unlawful contract part can result in the complete void of agreement. The provision also depicts that an agreement without proper consent can be voided unless it is written and registered or compensation is promised against that (Gov, 2022).

Review of case Precedents

The present study has selected two precedent cases that have direct involvement with the Contract Act 1950 of Malaysia. The first case is CIVIL APPEAL NO: B-02-434-03-2014, between parties, named, Philip bell booth & Anor V (Cljaw, 2016). Navaratnam Narayanan. The case is regarding the breaching of contract where there is a valid contract between two parties. The contract breach has been happened during the construction of ‘Aquaria’ in Kuala Lumpur Convention Centre.  The first and second appellant have refused to pay 5% of shareholding amount to third defendants as per predefined contract.

The elements of contracts such as (the offer, acceptance, intention to create legal relation, consideration, certainty and capacity have been fulfilled by parties that preserve the authenticity of contract. In this case, section 2(a), 2(b) and 7(b) of the Contract Act 1950 has been incorporated to provide a lawful judgement. Firstly, the legality of contract has been proved under 2(a) section, Contract Act 1950. Secondly, the proposal of giving 5% sharing has been accepted by parties as per 2(b) section (Cljaw, 2016). Thirdly, s. 7(b) of the Contracts Act 1950 provides that the acceptance must be conveyed or expressed in some usual and reasonable manner unless the proposal prescribes the matter in which it is to be accepted. Hence, it is failed to prove that appellants have responded to all material clauses.  As per implications of Contract Act 1950, it is proved that there is merit in appellant’s appeal. Therefore, majority have allowed the appeal with cost RM40,000 (Cljaw, 2016).   

The second case is [CIVIL APPEAL NO: A-02(NCVC)(W)-233-02-2017 between Tan Ah Kow & Anor v. Tan Chaui En. The case is regarding the legality and authenticity of oral agreement by power of attorney in land selling and purchasing (Cljaw, 2018). There has been no evidence of oral and written agreement for selling 1/3 share and purchasing of 13 lands. Power of attorney has not made any significant reference regarding those selling and purchasing. Therefore, Section 30 of Contract Act has been incorporated here.

As per the learned counsel for the appellants, power of attorney cannot stand in his vague terms and discrepancies of definitions. Section 30 of Contract Act 1950 states that uncertain agreements and incapable of being certain agreements are void. Additionally, there is no proof of purchasing and selling price and respondents have no beneficial interest in 13 pieces of land (Cljaw, 2018). With the incorporation of section 30 of Contract Act 1950, learned JC has failed to consider respondent’s claim without any proof. As judgement of case, first appellant is entitled to transfer three pieces of land to the name of second appellant (Cljaw, 2018).  

Conclusion

The clauses and regulations of the Contract Act 1950 have depicted several laws regarding the authenticity and approval of a contract in Malaysia. The present report has crucially distinguished and evaluated the legal provisions of the Contract Act 1950. The legality elements of this Malaysian Act have described the authenticity of a contract that has been made of full consent. An agreement can be void or fully cancelled due to any misinterpretation, influence and forceful attempt during agreement development. Contracts made mistakenly cannot be voided as they are not made forcefully.

Two Malaysian cases have been introduced in this report which has been solved with the particular sections of the Contract Act 1950. In the first case regarding breach of contract, section 7(b) and 2 (a) have incorporated the terms of approving, responding of both parties to all facts of agreement. In the second case, the application got void in failure of proofing existence of selling and purchase.  The present study has potentially justified the accountability and fulfilment of legality elements of Contract Act 1950 as it is competent to provide a solution to any kind of breaching in a contract

Element B: Case Analysis report in Business Ethics

Introduction

Business ethics is the study of appropriate business practices and policies regarding controversial subjects such as corporate governance, operational inequality. Business ethics can be changed with management behaviours including wide-ranging effects in the company. The present study is a case analysis report regarding business ethics. This study has chosen the case of DOSH (Department of Occupational Health). This organisation has prosecuted 47 cases with a fine amount of RM740,400. DOSH has also issued 159 compounds regarding various offences due to violating employment rules in Malaysia. Dosh is very much concerned regarding the casualties of 3 construction workers in the accident at the Sungai Besi-Ulu Kelang Elevated Expressway. While implementing the Occupational Health and Safety Act 1994, the Dosh organisation has claimed a fine for violating the rules of employee safety and fair wages (Cheah, F.S. and Lee, 2009). The present study has critically made arguments and evaluated the justification of this particular case in Malaysia. Analysis of case background, application of literature-based evidence, recommendation and reflection on this case is crucially evaluated in this study.

Analysis of the background and conditions of the issues

As per the given case, the Department of Occupational Health (DOSH) in Malaysia, has prosecuted 47 cases against the construction companies and other employment companies with a fine of RM 740,400 in March 2021 (themalaysianreserve, 2021). Dosh organisation has stated that most of the construction companies and employment organisations do not fulfil required training, employee health & Safety, and justified wages (Lee et al. 2014). This huge amount of fine has been demanded for the sake of employee training and heeding employee safety. On the other hand, DOSH company has issued a total of 159 compounds for treating employees in unethical manners that is the value of RM770,500 (themalaysianreserve, 2021). The issues and criminal offences against employees are considerable facts in this case.

 In this context, the accident of Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) can be discussed. Both government and parties have been accountable for developing risk mitigation strategies and workers’ safety. Therefore, three workers die and many civilians are injured. Additionally, the evaluation of the SUKE construction site package as the culmination of six previous accidents that started in 2018, has left all blames of accidents on the construction companies (themalaysianreserve, 2021). In another accident case, two workers and one foreign labour have were injured while metal scaffolding at a light rail transit (LRT) construction site collapsed (straitstimes, 2021). 3 workers have been killed when a crane toppled on the Sungai Besi-Ulu Kelang Elevated Highway construction site in march 23, 2021 (straitstimes, 2021). These above-mentioned accident cases are most frequent in Malaysia. Hence, the seriousness, utility and importance of the case, precedented by DOSH is fully justified.

Most importantly, the incorporation of the Occupational Safety and Health Act 1994 (OSHA 1994) has made a strong base for the case. As per the given case, the DOSH organisation has vitally identified the roles of architectures, engineers, contractors, developers in preserving safety in their activities. Section 15 of OSHA depicts that employers are fully liable for ensuring the safety, welfare and health of all workers. Additionally, Section 24(1) of OSHA explained that employer company is accountable for taking care of their employees. Any type of voiding or breaching of OSHA 1994, can be the reason for RM 50,000 and up to two years jail. In this context, DOSH’s accuse the SUKE construction project and associated 14 companies of not filing the safety and health measures in a proper manner.

Critical Analysis of cases as per the implementation of relevant literature

The construction business is one of the most popular and financially upgraded industries in Malaysia. This particular industry has a higher fatality rate compared to other industries in Malaysia. This industry is liable for the most part of the employment and mortality rate of workers. Therefore, construction companies and related accidents have retained the filthy situation of Malaysian employment. As per the view of Hamid et al. (2019), construction accidents are unintended and unplanned that result in loss or harm in property, personal and production. On the contrary, construction companies’ negligence in health measures and safety procedures along with inadequate training for workers are the main reason for frequent accidents.

Several workers have been killed in tire explosions in Sabah, Malaysia. On the other hand, workers died due to electric shock on 23 August 2020 (dosh, 2020). In the first case, the air receiver of the tire does not have a CF or DOSH registration record. The employer has failed to set up machinery key storage. In the second case, Restoration Movement Control Order (PKPP) has banned the organisation for inadequate safety measures (dosh, 2020).  Above mentioned accidents have happened mostly due to negligence of the employers in developing proper safety and health precautions. Lee et al. (2018) have stated that such accidents can be avoided when construction companies remain careful with supervision and management of duties (Abdul Ghani and Adam, 2010). On the contrary, these accidents can result in sudden disruption in project continuation, cost overrun, financial loss, dissatisfaction of stakeholders and loss of reputation. Most importantly, these cases resulted in removing cost, penalties and compensation.

Hence, the above-mentioned case of DOSH has a strong legal base that can be solved and supported by OSHA 1994. Organizational Safety and Health Act 1994 has influential effects for setting risk assessment activities, planning, procedures, responsibilities and resources of an employer organization. Contrarily, OSHA 1994 is accountable for taking effective steps against the employers who have not taken has influential effects for setting risk assessment activities, planning, procedures, responsibilities and resources. Awang et al. (2019) have stated that OSHA 1994 implements health management, occupational safety, employee’s perception towards culture and safety satisfaction in a positive manner.

Recommendation

Most of the accidents in Construction sites happen due to a lack of safety rules and protocols. Safety protocol preserves the rules and regulations in constructions sites regarding the usage of particular machines, high allocations and instructions of safety measures. The allocation and proper knowledge regarding safety protocols will help workers to proceed with more safety.

Scheduling regular safety meetings with contracts, subcontractor, engineers and project owners can be fruitful for safe employee conditions (Abdul Ghani and Adam, 2010). Most of the construction projects continue over months. Therefore, initial safety meetings can be impactful and that needs to be updated with new safety measures in a frequent manner. With this recommendation, workers will find solutions to new hazards in the workplace. As per the view of Lakatos et al. (2019), an interpersonal committee needs to be developed for preventing injuries and health hazards of workers. This measure will be legally correct and potential to DOSH organization. Additionally, a company will get negative support from OSHA1994, section 15.

Another recommendation is to develop a training program for workers. In this context, the Employee Assistance Program will be beneficial for educating workers about the usage of heavy machines, safety measures and health precautions. This type of education and training will be effective for rejuvenating a strong employee base against de-escalation techniques and violence management. Mazzett et al. (2020) have intervened that proper training is very much effective for developing a sense of safety compliance, personal protective equipment and safety behaviors. As safety perceptions and injury rates have adverse relations, recommendations related to training and education to construction workers will positively reduce the rate of accidents. Another important recommendation is to store proper material storage and handling. Many accidents happen in the workplace due to old and accident-prone machines (Kolar, 2018). Regular safety checks of construction machines and replacement of these machines will be effective for lowering such accidents. 

Conclusion

Business ethics of an organization preserved the matter of legitimacy in a regulation, operational and practical approach. Malaysian companies, especially construction companies are not practicing ethical business activities through setting up proper safety measures for employees. DOSH organization has prosecuted several number cases with fines for not taking risk measures before starting their construction projects. OSHA 1994 have compelled these employers to take regulatory actions for providing necessary education and training to workers along with fair wages, routine safety check of machines and operational safety actions.

I have evaluated and analysed the accident cases of Malaysia that cause the death of several workers. I have also noticed that in most cases the employers have not provided proper employee safety and health activities before starting a project.  Therefore, the given case related to DOSH’s legal appeal is felt as completely justified to me. I think after this strong step; Malaysian employers will take impactful initiatives for reducing these accident cases. I have also incorporated probable safety and risk mitigation recommendation including safety training, frequent health check, fair wages, which can be helpful for further assessment. Additionally, my discussion related to OSHA 1994 and its sections can be directive for a more impactful occupational employee safety.