2 January, 2020
The Industrial Court, vide Award No. 3200 of 2019 dated 18 December 2019, ruled that Export-Import Bank of Malaysia’s (“the Bank”) decision to dismiss Chairil bin Mohd Tamil (“the Claimant”) owing to the latter’s failure to exercise due diligence in the course of his duties, was with just cause and excuse. The Claimant was the joint second-highest officer of the Bank and held the position of Chief Business Officer. Sometime in 2017, the Bank entered into an agreement with one of its clients for the purposes of granting loan facilities.
Prior to extending the loan, the Bank’s Banking Division (which was one of the departments under the purview of the Claimant) was responsible for preparing the relevant proposals.
The proposals would then be sent to the Claimant for review and approval, prior to submission to the relevant committee for decision. The proposals were approved and accepted by the Claimant and the committee.
However, over the course of the loan facilities, numerous incumbrances were identified, which resulted in the Bank failing to secure the return of the loans.
An investigation was conducted and revealed that numerous weaknesses were not detected in the course of preparing the proposal papers. Given the Claimant’s failure to exercise due care in ensuring the proposal papers were properly prepared by the Banking Division, the Claimant, as well as the officer who prepared the proposal papers, were dismissed.
The Claimant contended that the proposal papers were prepared by his subordinates and that he, as the Chief Business Officer, could not have been reasonably expected to verify every piece of information. As such, the Claimant argued that primary responsibility fell on his subordinates and he should not have been dismissed.
The Industrial Court rejected the Claimant’s contention and ruled that, as the joint secondhighest officer of the Bank, he was placed in a greater duty of care to exercise responsibility in reviewing and/or approving the proposals.
The perfunctory discharge of his duties was clearly a misconduct and amounted to negligence. The Industrial Court accordingly affirmed the Bank’s decision to dismiss the Claimant. The instant decision underlines the importance of an employee’s responsibility to exercise due diligence and meticulously verify all information, including that contained in documents prepared by subordinates.
An employee cannot simply deflect liability on account that the primary, or a portion of, the duties were undertaken by subordinates. The Bank was represented in the instant matter by Vijayan Venugopal and Benedict Ngoh
For further information, please contact:
Sivabalah Nadarajah, Partner, Shearn Delamore & Co
sivabalah@shearndelamore.com
