Avoidance Of Conflict Of Interest: An Inflexible Rule

• Law Firm: Lee Hishammuddin Allen & Gledhill
• Subject Matter: Employment and HR, Real Estate and Construction, Unfair/ Wrongful Dismissal, Employee Rights/ Labour Relations, Real Estate
• Author: Mr Shariffullah Majeed and Arissa Ahrom
• Published date: 27 January 2023

Ghazali Abdullah v FGV Plantations (Malaysia) Sdn Bhd (Industrial Court Award No. 32 of 2023)

It is well established in a plethora of Industrial Court authorities that an employee must avoid any conflict of interests or even potential conflict of interests with his or her employer. Should a conflict of interest or the possibility of one arise, an employee owes a duty to disclose the same to his or her employer. This duty to disclose is critical in order to safeguard the interests of the employer so that the management is fully aware of the transactions by employees acting on behalf of the company.

In the instant case, the Claimant last held a senior position of trust as the Company's Senior Manager in its technical department. Around September 2018, the Claimant was involved in the Tender Process Committee of a housing development project ("Housing Project"). His role therein was to, among others, monitor and supervise the Housing Project. In October 2018, the Company conducted an open tender on the Housing Project and invited experienced contractors registered with the Company to submit their tenders.

It was discovered via one of the tender documents submitted by Jajaran Permata Sdn Bhd ("JPSB"), that the Claimant who was at the material time involved with the Tender Process Committee of the Housing Project, was also at the same time, employed as a Senior Engineer in JPSB. Subsequent to this discovery, the Claimant was accordingly removed from the Tender Process Committee of the Housing Project and an investigation into his involvement in JPSB was commenced.

In line with good industrial relations practice and to facilitate further investigations into the matter, the Company highlighted to the Claimant via a show cause letter of his violation of the FGV's Code of Conduct and Policy which expressly states among others, that it is obligatory for employees to disclose to the Company any contractual or non-contractual interests, whether directly or indirectly in another organisation. In his explanation to the Company, the Claimant admitted that:

1. He had merely permitted his friend (one of the Directors of JPSB) to use his Degree in Civil Engineering for the "purpose of the registration" of JPSB with the Construction Industry Development Board;
2. The last time JPSB had contributed into his EPF account was in October 2017 and the contributions were not consistent; and
3. He had never informed the Company of his involvement as JPSB's Senior Engineer since 2013 as he...