Malaysia - Norlidah Binti Mhd Shah v Cimb Bank Berhad.
Legal News & Analysis - Asia Pacific - Malaysia - Labour & Employment
30 September, 2019
In this case the Industrial Court upheld the dismissal of the claimant, Norlidah Binti Mhd Shah (“Norlidah”), by the bank, CIMB Bank Berhad (“CIMB”). Norlidah was a former branch manager. The main reason for Norlidah’s dismissal was because she solicited incentive payments from her staff members at the Bangsar South Branch.
Sometime in September 2014, CIMB received complaints that Norlidah had allegedly committed irregularities in the course of the performance of her duties. The complaints were in relation to Norlidah’s solicitation of sales incentive payments from her sales staff.
CIMB commenced investigations into the complaints and a show cause letter was issued to Norlidah. Norlidah’s defence was that the payments made by the staff members to her were of their own free will.
CIMB then dismissed Norlidah.
The central issues to be determined by the Industrial Court were whether Norlidah was guilty of soliciting sales incentive payments from her staff and whether the allegation levelled against Norlidah constitutes just cause or excuse which warrants her dismissal.
Norlidah in this case did not deny receiving the monies. However, she denied allegations of profit sharing arrangements and claimed that the funds were given to her voluntarily by her sales staff without her requesting the same.
Norlidah further alleged that she was merely assisting her subordinates to achieve their respective key performance indicators by introducing potential investors and borrowers. Norlidah contended that since the incentive payments were paid by CIMB directly into the accounts of the sales staff, they were not bound to pay Norlidah if they did not wish to.
Decision and analysis of the Industrial Court
The Industrial Court took into account the fact that, based on Norlidah’s bank account transaction activity, the alleged payments were received from two of her staff (Leslie Yap and Ng Yeong Lim) as incentives from various sales referred by Norlidah and that Norlidah did not deny receiving the monies.
The Industrial Court noted that both of Norlidah’s staff consistently testified in Court that they were compelled to pay a certain amount to Norlidah from the incentive payout given to them by CIMB.
The Court observed that Leslie Yap, in his evidence, firmly and positively confirmed that Norlidah did ask for the payment when she said: “Where is my money? Commission from the sales”. The Court also took into account the fact that Ng Yeong Lim left CIMB due to his frustration of having to work in such a situation.
The Court held that Norlidah had the authority and influence over her staff and thus the Court did not accept Norlidah’s claim that the payments were made to her willingly by her subordinates. The Court further held that Norlidah, as Branch Manager, does the performance appraisals of her staff and therefore the reasons given by Leslie Yap and Ng Yeong Lim that they did not question her on the profit sharing were justified.
The Court also considered that CIMB had issued a memorandum to its area retail managers, customer sales and distribution which states that solicitation by managers for additional commission directly from sales personnel under their purview is completely unacceptable and a serious misconduct. Therefore, the Court held that as Norlidah had been working in CIMB since 1982 it was incumbent upon her to be aware of CIMB’s policies and regulations, in this instance, the memorandum.
On the issue of proportionality of punishment, the Court ruled that CIMB’s decision in terminating Norlidah was proportionate due to the nature and degree of the misconduct as it violates the essential condition of the employment in preserving integrity and such act breaches an employer’s faith in an employee.
In so ruling the Court held that Norlidah as a branch manager is expected to abide by CIMB’s directions or policy and set a good example to her subordinates. The Court further held that it was a serious misconduct which eroded the trust between the employer and the employee when Norlidah breached the clear directions of CIMB by making her subordinates share part of their incentive payments with her. The Court was of the view that compelling a person to give up their monies is not a trivial matter and could amount to a serious criminal act.
It is pertinent to note the fact that the monies were not CIMB’s property/customer funds thereby occasioning no monetary loss to CIMB is irrelevant as Norlidah’s misconduct had breached the trust and confidence CIMB had in her.
This is a good example of a case where the Industrial Court reaffirmed the position that honesty and integrity are key characteristics that employees should possess, regardless of their capacity.
For further information, please contact:
Jamie Goh, Shearn Delamore & Co