The Industrial Court (IC) had ruled that the Company, had proven the misconduct against the Claimant, and that the dismissal was with just cause and excuse.
However, the High Court (HC) quashed the decision of the IC when it accepted the Claimant’s contention that he had submitted the claim to the Company by an “innocent mistake”.
The Company appealed against the decision of the HC. The Court of Appeal (COA) overturned the High Court’s decision and affirmed the Industrial Court’s decision.
The Claimant filed an application for leave to appeal to the Federal Court. Recently, the Federal Court dismissed the Claimant’s application for leave to appeal to the Federal Court.
 The Claimant’s last held position in the Company was Manager, Project Management, Strategy and Business Performance. His last drawn salary was RM7,271.00.
 It came to the Company’s attention that the Claimant had submitted a false claim for a dental expense.
 The Company alleged that the Claimant had claimed a sum of RM488.00 for dental expenses when in fact the said expense relates to his purchase of a pair of spectacles from Alook Dpulze on 7.12.2016.
 The Claimant submitted his claim through the Company’s e-Claim system.
 Company issued a show cause letter to the Claimant. The Company alleged that the Claimant had submitted the receipt of the purchase of a pair of spectacles and claimed the same under dental expenses. The Claimant was required to provide an explanation.
 The Claimant replied. The Claimant did not dispute the allegation of misconduct. He apologized and attempted to justify his action by citing the reason that he was unaware and misunderstood the changes in the Company policy. Further, he contended that he had no intention to cheat as he had uploaded a copy of the receipt for the purchase of his new spectacles. He intended to return RM488 to the Company by way of monthly deduction or in cash. He gave the Company the option to choose.
 The Company found the Claimant’s explanation to be unsatisfactory and convened a Domestic Inquiry (DI).
 The Claimant was required to answer the following allegation of misconduct:
“Bahawa anda pada 29.12.2016 telah mengemukakan tuntutan yang tidak benar bagi tuntutan “dental’ sedangkan anda sedar bahawa tuntutan yang dikemukakan adalah bagi pembeliaan cermin mata berjumlah RM488.00”.
 At the DI, the Claimant pleaded guilty to the charge as specified in the Notice of DI.
 At the conclusion of the DI, the DI panel deliberated, examined the exhibits tendered by the Company and found the Claimant guilty of the misconduct levelled against him.
 The Company terminated the services of the Claimant. The Claimant appealed. The Claimant’s appeal was rejected by the Company.
 The Claimant filed a claim for unlawful dismissal under S.20(1) IRA 1967 at the Industrial Court.
AT THE INDUSTRIAL COURT
 The Chairman of the IC had perused the notes of the DI and found that the Claimant had voluntarily pleaded guilty to the charge wherein he stated “saya mengaku bersalah keatas tuntutan yang dinyatakan iaitu tuntutan dental dan tetapi membuat tuntutan cermin mata berjumlah RM488”.
 The Court found that the Claimant had notice of the charge and sufficient details were stated in the charge that he could comprehend and plead guilty at the DI. Hence, there was no breach of principles of natural justice.
 The IC found that the Claimant was not entitled to receive benefits of purchase of spectacles. The Claimant was aware he was not entitled to claim because in examination in chief he confirmed that he was ineligible. Hence, the Claimant cannot claim that he was unaware or mistaken.
 The Claimant does not deny that he submitted the claim via the e Claim portal under the heading dental by using the tax invoice for the purchase of spectacles as supporting document. The Claimant approved the claim.
 The Claimant claimed at trial that he was informed by his work colleagues that he was entitled to make the claim. The IC found that this was a bare allegation as the Claimant failed to bring his colleagues to testify on his behalf. S.114(g) of the Evidence Act 1950 was invoked against the Claimant.
 During cross examination, the Claimant confirmed that he had submitted the claim under dental vide the e claim portal. Further, he confirmed that he had input the details into the e claim for dental expenses.
 The Claimant had submitted his claim before asking for clarification from HR. The IC found that this was corroborated by the whatsapp message which was sent after he submitted the claim.
 The IC found that the Claimant knew and was aware that he was submitting a claim under the head of dental because he was required to fill several details when submitting a claim under dental. The Claimant confirmed details such as “extraction” and “filing” by stating “yes”.
 The Court was of the view that honesty and integrity were key characteristics that an employee should possess. Further, the Claimant’s long years of unblemished service did not immunise the Claimant from dismissal.
 The IC found that the very fact that the Claimant was a long serving employee, he had to be aware of Company’s policies.
 The IC held, that dishonesty was a serious misconduct which justified the punishment of dismissal.
 The IC ruled in favour of the Company and found that the dismissal was with just cause or excuse.
 Aggrieved, the Claimant filed a judicial review application at the High Court.
AT THE HIGH COURT
 The HC found that the IC’s decision was tainted with errors of law and irrationality which warranted judicial intervention. The HC quashed the decision and ordered the claim to be remitted back to the IC. The HC made the following observations:
(a) The Employee had from the very beginning informed the Employer that he had made a mistake in his claim. The Employee
had apologized for his error and agreed to refund the sum of RM488.00. Further, the receipts submitted with the
Employee’s claim showed that it was for purchase of “new optical lenses”.
(b) If the IC had considered the above facts, it would be apparent that the employee had no intention to cheat or make a
(c) The Finance Department did not reject the claim but approved and paid the claim to the Employee hence the Company
should not have taken disciplinary action against the Employee. IC failed to take this into account, which rendered its
(d) The doctrine of proportionality of punishment applied. The HC was of the view that the punishment of dismissal was
not proportionate to the offence:
(i) There was no intention by the Employee to cheat the Employer or to make a false claim.
(ii) There was an apology from the Employee who agreed to refund the sum of RM488.00.
(iii) The Employee had worked for the Employer for 9 years and 9 months without any previous disciplinary record; and
(iv) The sum in question ie RM488 was nominal.
 Based on the above, the HC found that the IC’s decision was irrational and in contravention of S.30(5) of the IRA 1967.
 Aggrieved, the Company filed an appeal to the Court of Appeal.
AT THE COURT OF APPEAL
 The COA quashed the decision of the High Court. The COA held the following:
(a) Whether the payment was approved, disbursed to the Claimant and whether the Company suffered any financial loss
were irrelevant considerations because the primary issue to be determined is whether the Claimant committed the
(b) In considering whether the punishment of dismissal was proportionate to the misconduct committed, the COA held that the
seriousness of the misconduct outweighs the length of service, whether the Claimant had a clean record prior to the
misconduct and the amount involved in the false claim.
(c) Claimant contended that he was purportedly informed by a colleague that he was eligible to claim the purchase of the
spectacles; however, the colleague was not called to testify.spectacles; however, the colleague was not called to testify.
(d) That the Industrial Court had duly considered the Claimant’s defence when it had evaluated the following evidence:
(i) Under Claimant’s employment terms, he was entitled to submit dental claims but not optical claims.
(ii) Claimant was fully aware that he was not eligible to claim for the purchase of spectacles & despite this he
proceeded to claim under the dental claim.
(iii) There was no option for the Claimant to make a claim for optical expenses in the e-claim portal.
(iv) Claimant had to go through a series of step-by-step processes prior to submitting the dental claim.
(v) Prior to submission, the Claimant must agree to the disclaimer which states that disciplinary action could be taken by
the Company in the event the claim was found to be false.the Company in the event the claim was found to be false.
(vi) The Claimant made a note when he submitted the claim “Remark -New Optical Lens”, thus indicating that he understood
the claim was to get reimbursed for his purchase of a new pair of spectacles; and
(vii) The Claimant falsely declared in the e-claim system that the claim entailed dental “extraction” and “filing”.
 Based on the above, the IC and COA were of the view that the Claimant understood he was not eligible to claim for the purchase of the spectacles but nevertheless proceeded to make a claim for it under the pretext of a claim for dental treatment. Hence, he could not later claim that he was unaware and or mistaken.
 Long service and clean record does not prevent an Employer from taking disciplinary action against the Employee.
 The fact that a claim has been approved and disbursed does not stop an Employer from acting against the Employee if it was discovered later the claim was false.
 Submission of a false claim is a serious misconduct which will warrant dismissal from employment.
 The fact that the Claimant was willing to return RM488 to the Company is not a mitigating factor to be considered when deciding the proportionality of punishment.
SENIOR CONSULTANT INDUSTRIAL RELATIONS
MALAYSIAN EMPLOYERS FEDERATION