ZULBAHARI LADAT V. CIMB BANK BERHAD
INDUSTRIAL COURT, PERAK
FREDRICK INDRAN XA NICHOLAS
AWARD NO. 410 OF 2012 [CASE NO: 10/4-321/08]
26 MARCH 2012

The claimant commenced employment with the company on 16 April 1984 as a clerk cum cashier with an initial salary of RM410 per month. He was promoted to the position of Customer Service Officer on 1 September 2001. On 29 June 2007, he was dismissed from the service of the company on two charges levelled against him. He was drawing a salary of RM3,296 per month prior to the dismissal. The two charges levelled against the claimant were: (1) that he had approved two fund transactions amounting to RM39,000 from the account of a customer to accounts of other customers without the prior written permission of that customer concerned, and (2) that he had, jointly with another Customer Service Officer of the company, approved the crediting of RM140,359.44 from the fixed deposits of one customer into the savings account of a third party.

The issue before the court was whether the claimant's dismissal was with just cause and excuse.

Held for the company (dismissal with just cause and excuse):

(1) The claimant owed a fiduciary duty to the bank as its employee. The fact that he believed that such practices were permissible belied the fact that he could have risen to the position of a bank officer without the intuition to discern that such practices were not only out of the ordinary but that it was accepted by the company which primarily dealt with other people's money. In the many years the claimant had served the company, he must have taken to have known the difference between acceptable banking practices and dubious banking practices. From the facts of the case, it was plain and obvious that the claimant ought to have known that what he was doing could not be legitimate and that it was improbable that he could not have known the true nature of his acts. As a corollary, he was in fact deliberately wilful in doing what he did to the detriment of the company, in particular to the company's highly watched-over reputation (paras 44 & 45).

(2) The claimant's contention that the company had condoned the claimant's misconduct by its delay in taking action against him was rejected. The inaction of the bank manager (who had taken over from his predecessor who had resigned) on the claimant's misconduct could not be construed or deemed as condonation on the part of the company (para 46).

(3) The claimant had admitted to the substantial and material elements of the allegations against him and by that he had shown a betrayal of trust and confidence reposed in him by the company (para 47).

(4) As regards the claimant's purported belief that he had done no wrong as he had approved the fund transfers at the behest of his superior, it could not be fathomed how the claimant could have believed that his duties and discretion extended to deliberate and irregular conduct on the 'say-so' of a superior. He must have taken to have known that such instructions handed down by the superior were against common banking industry practice. The claimant should have reported the superior's alleged conduct to a higher authority at the earliest instance after receiving the dubious order. By virtue of his years of service and experience in the bank, the claimant must have known that such unauthorised transactions were improper (para 48).

Award(s) referred to:

Azahari Shahrom & Anor v. Associated Pan Malaysia Cement Sdn Bhd [2010] 1 ILR 423 (Award No. 101 of 2010)

Cellular Communications Network (M) Sdn Bhd v. Ilhami Mohamad [2001] 1 ILR 233 (Award No. 29 of 2001)

Colgate Palmolive (M) Sdn Bhd v. Yap Kok Foong [1998] 2 ILR 965 (Award No. 368 of 1998)

Esso Production Malaysia Inc v. Md Yusop Nordin [1997] 2 ILR 711 (Award No. 356 of 1997)

Ireka Constructions Berhad v. Chantiravathan Subramaniam James [1995] 2 ILR 11 (Award No. 245 of 1995)

Perwira Habib Bank (M) Bhd v. Tan Teng Seng @ Lim Teng Ho [1997] 2 ILR 839 (Award No. 371 of 1997)

Case(s) referred to:

Board Of Education Of The Indian Head School Division No. 19 Of Saskatchewan, The v. Ronald Gray Knight [1990] 1 SCR 653

Bumiputra Commerce Bank Ltd v. Mahkamah Perusahaan Malaysia & Anor [2004] 7 CLJ 77

Goon Kwee Phoy v. J & P Coats (M) Bhd [1981] 1 LNS 30

Haji Ali Haji Othman v. Telekom Malaysia Bhd [2003] 3 CLJ 310

Milan Auto Sdn Bhd. v. Wong Seh Yen [1995] 4 CLJ 449

Smith v. City Of Glasgow District Council [1985] IRLR

Taylor v. Parsons Peebles Ltd [1981] IRLR 119

Telekom Malaysia Kawasan Utara v. Krishnan Kutty Sanguni Nair & Anor [2002] 3 CLJ 314

Union Of Construction, Allied Trades And Technicians v. Brain [1981] IRLR 224

Wong Chee Hong v. Cathay Organisation (M) Sdn Bhd [1988] 1 CLJ 45; [1988] 1 CLJ (Rep) 298

Wong Yuen Hock v. Syarikat Hong Leong Assurance Sdn Bhd & Another Appeal [1995] 3 CLJ 344

Legislation referred to:

Industrial Relations Act 1967, s. 20(1), (2) & (3)

Other source(s) referred to:

Abdul Majid, "Condonation as Waiver of the Employer's Right to Punish Misconduct" [1996] 2 MLJ xvii

Alfred Avins, "Employee's' Misconduct" , pp. 537 & 538

BR Ghaiye, "Misconduct in Employment" Chapter XIX, pp. 650

Dunston Ayadurai, "Industrial Relations In Malaysia: Law & Practice" 3rd edn, pp. 297, 325 & 326

Reported by Usha Thiagarajah