Announcement

Shattered Trust: Industrial Court upholds dismissal of Senior Employee for Conflict of Interests involving Vendors of the Company

Share:

Print
14 November 2024

Our Employment and Industrial Relations Partner, Wong Keat Ching together with her Associate, Ameerah Nasri have successfully acted for a Telco company in an unfair dismissal claim by a former employee at the Industrial Court, wherein YA Tuan Paramalingam A/L J. Doraisamy handed down Industrial Court Award No. 1648 of 2024 dated 21.10.2024.

BRIEF FACTS
The Claimant was employed with the Telco Company since 1997 with over 21 years of service prior to his dismissal in 2019. Between the years of 2017 and 2018, the Claimant, in his position as the Head of Property Acquisition, had committed 3 separate misconducts involving vendors of the Company.

First misconduct: The Claimant had requested the CEO of the Company’s active vendor (“Vendor A”) to purchase Electric Train Service (“ETS”) tickets for himself and his subordinate, and subsequently submitted claims for such purchase which were approved and credited into the Claimant’s account by the Company. In this regard, the Disciplinary Committee which was chaired by the CEO of the Company at the time found that the Claimant’s act not only breached the Company’s conflict of interest policy, but was an act of deceiving the Company into paying him an amount which he did not incur himself, and which he never disclosed to the Company.

Second misconduct: The Claimant had directly awarded 20 project sites to the same Vendor A, knowing he was in a situation of conflict of interest as his daughter was employed by Vendor A at the time of the award. The Claimant had failed to declare such conflict, and only did so after his investigation interview with the Company’s Corporate Investigation Team, 2 years later. This was once again a breach of the Company’s conflict of interest policy which the Disciplinary Committee found could have been avoided had the Claimant followed a fair procurement practice by calling for tender, or recused himself from the process of awarding such sites to the vendor in question.

Third misconduct: The Claimant had sought the favour of the Managing Director of another vendor (“Vendor B”) to find/or secure employment for his daughter at a preferred company. The Claimant’s defence was that such act could not have constituted a misconduct because even though Vendor B was a registered vendor, it had no active business dealings with the Company. The chair of the Disciplinary Committee had testified in Court that generally, a personal favour may impact such employee’s judgment when it comes to making decisions. As such, the Company could not repose the necessary trust and confidence in the Claimant any longer.

DECISION OF THE INDUSTRIAL COURT
First misconduct: The fact that the CEO of Vendor A was a close friend of the Claimant for the past 6 years prior to his dismissal was not lost on the Court. The Claimant in his admission that he had indeed sought the assistance of the CEO of Vendor A to purchase such tickets for him and his subordinate, had contended no mala fide intention as he had later reimbursed the CEO for the cost of the tickets. The Court did not accept the Claimant’s defence as it did not explain why the Claimant had failed to inform the Company when he made the submission for the reimbursement of the ETS tickets, that he had in fact obtained the assistance of Vendor A via its CEO, which the Court concluded was an act of deception on the Claimant’s part and spoke volumes of his mala fide intention. The Court further concluded that the Claimant was fully aware that had he disclosed to the Company that he sought such assistance from Vendor A, he would have landed in hot soup with regard to the Company’s policy on conflict of interest. Lastly, the Court determined that whether or not the Claimant had reimbursed the CEO of Vendor A for the cost of the ETS tickets was irrelevant as it did not exonerate the Claimant from his deceptive act.

Second misconduct: The Court held that the onus was on the Claimant to declare to the Company the situation of conflict of interest which he was in, as per the Company’s conflict of interest policy. As such, the Claimant was found to have abused his position and failed to act in the best interests of the Company.

Third misconduct: The Court found that the Claimant gave short shrift to the Company’s conflict of interest policy due to his brazen act of not only asking the Managing Director for such favour, but to make such request using his Company email address, sent to the Managing Director’s company email.

Based on all the above, the Court found that the Company succeeded in proving on a balance of probabilities that the Claimant was guilty of all 3 charges against him.
The Court determined that the punishment of dismissal meted out by the Company to the Claimant was proportionate to the acts of misconduct committed as (1) the Claimant had held a senior position in the Company which implied added responsibilities and a fiduciary duty to act in the best interests of the Company, (2) the Claimant had concealed his conflict of interests from the Company, and (3) the Claimant had practiced deception on the Company.

KEY TAKEAWAYS
This case serves as a stark reminder of the perils of a skewed perception of personal interests versus professional duties. Through its decision, the Industrial Court provides clear guidance on what constitutes unacceptable conduct, emphasising that even seemingly minor transgressions can erode trust and compromise corporate integrity. The Industrial Court’s decision highlights that employers are justified in taking decisive action to protect their organizational integrity, particularly against those entrusted with greater responsibilities.

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

Please email your details to [email protected] if you would like to subscribe to our Knowledge Centre.

Let's Connect!
➭ LINKEDIN: Zul Rafique & Partners
➭ INSTAGRAM: @zrplaw