Is an employee’s misconduct of submitting a false claim a just cause or excuse for his dismissal?

TELEKOM RESEARCH AND DEVELOPMENT SDN BHD v. AHMAD FARID ABDUL RAHMAN [2021] 1 LNS 1711
[CIVIL APPEAL NO: W-01(A)-170-03 OF 2020]

• Ahmad Farid Abdul Rahman (“Farid”) in this case was employed by a Company called Telekon Research And Development Sdn Bhd (“TRD”).

• Farid had submitted a false dental claim amounting to RM488 through TRD’s online claim system, when the claim in fact was for the purchase of a pair of spectacles.

• A show cause letter was issued by TRD, directed to Farid.

• In reply, Farid admitted he had mistakenly submitted the claim and denied any wrongdoing or misconduct on his part.

• A domestic inquiry was conducted whereby Farid pleaded guilty and admitted to the charge of submitting a false dental claim.

• Farid was dismissed from his employment.

• Farid then filed a representation for unfair dismissal against TRD to the Industrial Relations Department which then referred the matter to the Industrial Court.

• The Industrial Court in its Award decided that TRD had successfully proven the charge against Farid and found the dismissal in question to be with just cause and excuse.

• Farid applied to the High Court to set aside the decision.

• The High Court quashed the Award of the Industrial Court and remitted the matter back to the Industrial Court for determination of back wages and compensation in lieu of reinstatement.

• One of the reasons used by the High Court ins setting aside the award was the length of service of Farid.

• TRD appealed to the Court of Appeal.

• The Court of Appeal found that based on the xoth procedures involved in submitting the claim, the conduct of Farid and the overall circumstances surrounding Farid’s submission of the false claim, the claim was submitted deliberately, thereby negating his defence of unawareness and genuine mistake.

• There was a significant element of dishonesty in Farid’s conduct which was in conflict with the trust and responsibility reposed in him in light of the fiduciary relationship between them as employer and employee.

• The Court of Appeal also held that the serious repercussions of the Farid’s misconduct far outweighs the length of the Respondent’s service, the Respondent’s clean record prior to the misconduct and the amount involved in the false claim.

• The Court of Appeal opined that TRD as the employer cannot now be reasonably expected to continue the employment of Farid, given that Farid’s integrity and honesty would be at the forefront of their mind.

• Therefore, Farid’s submission of a false claim pertaining to dental expenses is a serious misconduct and a just cause or excuse for his dismissal.