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Branch Manager dismissed after instructing his 3 subordinates to open Preferred Account using his own funds

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Ms Teoh Alvare and Mr Muhamad Sharulnizam from ZUL RAFIQUE & partners' Employment & Industrial Relations practice group, succeeded in defending CIMB (the 'Bank') in an unfair and unjust dismissal claim by the Bank's former Branch Manager in the case of Othman Bin Abdul Manan ("the Claimant") v CIMB (Award No. 751 of 2020), Kuala Lumpur Industrial Court.

In this case, the Claimant had instructed the transfer of his own funds into the accounts of the 3 staff, in order for them to open a Preferred Current Account (PCA). However, his contention that the said transfers were to reward the said 3 staff does not hold water in light of the fact that each and every transfer that was made by the Claimant to the said 3 staff were later transferred back from the current accounts of the 3 staff to the Claimant's account. The 3 staff testified in Court that they were not qualified to attain the Preferred Customer status as they did not have RM250,000.00 to achieve the Asset Under Management (AUM) criteria. For a customer to qualify as a Preferred Customer and open a PCA, the customer must meet the criteria of having an AUM of at least RM250,000.00. They also testified that they opened the current account upon the Claimant's instructions, who was their superior, i.e. Branch Manager, at that point in time. The said funds that was transferred by the Claimant into the accounts of the 3 staff were then transferred back in January 2018 after the Branch KPI for 2017 was completed.

On this issue, the Industrial Court found that it cannot be said by any stretch of imagination that the transfers were rewards by the Claimant to the 3 staff. They did not receive any benefits from the said transfers. In fact, even the interest earned, i.e. RM65.00, had to be returned by them to the Claimant.

The Court also found that the entire exercise was perpetrated by the Claimant in order to serve his own self-interest in achieving his year 2017 Branch KPI target for "Number of Successful Acquisition - New Preferred Customer". Without the additional 3 PCAs from the 3 staff, the Branch would only achieve the rating of 3 (Meet Expectations) instead of 5 (Far Exceed Expectations) for New Preferred Customer and the overall score for KPI would have been 2.60 instead of 2.70.

Further, the Court found that as an employee of the Bank, and more so as a Branch Manager, the Claimant was expected to discharge his duties with full trustworthiness and probity. This is more so where the Bank is a custodian of public funds and thus places its employees on strict standards of trust, honesty and integrity. Any form of misconduct which challenges the ability of its employees to carry out its duties with honesty and integrity is one that warrants dismissal. The fact that there was no monetary loss matters not one bit. His conduct in misrepresenting facts to the Bank for his own self-serving needs damaged the trust and confidence reposed in him by the Bank, justifying the Bank in dismissing him from his employment. The act of lying connotes a serious lack of integrity on the Claimant's part and constitutes a serious misconduct on his part just as much as stealing and cheating would.

As such, the Court upheld that the Bank's action in terminating the Claimant's services was done with just cause and excuse."


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For more insight into this area of law, please contact our Partners in the Employment & Industrial Relations Practice Group: 
P Jayasingam 
Wong Keat Ching  
Thavaselvi Pararajasingam