Lavania & Balan Chambers

Introduction

 

The High Court’s decision in Quest International University Perak v. Muniandy Munusamy [2023] CLJU 2945 is an important case in employment law as it examines the complexities surrounding the termination of an employee for providing false academic credentials during the job application process. This article discusses the decision’s legal and practical implications, focusing on the role of misrepresentation in employment contracts and its repercussions under Malaysian law.

 

Brief Background Facts

 

The dispute began when the claimant, a lecturer at the respondent company, was terminated for providing false information in his job application. When applying for the position in 2015, the claimant declared that he holds a bachelor’s degree from Phoenix International University (“PIU”) New Zealand, obtained through a part-time course at Perak Institute of Electronics (“PIE”). Based on the claimant’s credentials, the claimant was offered a position as a lecturer in the respondent company. Some 4 years later, the respondent discovered that PIU does not exist, and that PIE’s business registration had expired prior to the claimant’s alleged graduation.

 

The claimant was issued a show cause notice. During the domestic inquiry, the claimant was found guilty of providing false credentials. The claimant was subsequently dismissed.

 

The claimant challenged the dismissal by filing a representation under s. 20(3) of the Industrial Relations Act 1976 against the respondent for unlawful dismissal. The claimant alleged that he had no intention to falsify his credentials and that he was unaware of the status of PIU or PIE.

 

The Industrial Court ruled in favour of the claimant and held that the claimant’s dismissal by the respondent was without just cause and excuse. In so deciding, the Industrial Court held as follows:

 

(i)            The burden lies with the respondent as the employer to verify the accuracy of the credentials of the claimant at the time of submission of the application form.

 

(ii)       The respondent had failed to prove that the claimant had the intention to mislead or misrepresent the respondent as to his academic credentials.

 

(iii)         At the time of dismissal, the claimant had a valid teaching permit issued by the Ministry of Higher Education, and another local public university had conferred a master’s degree on him based on the bachelor’s degree obtained from PIU.

 

Issues before the High Court

 

On review to the High Court against the decision of the Industrial Court, the main issues were as follows:

 

• Whether the respondent had proven that the claimant’s academic credentials were false.
• Whether the Industrial Court correctly applied the law in concluding that intention to misrepresent was a necessary element of the misconduct.
• Whether the Industrial Court had considered irrelevant factors or disregarded material evidence in its decision.

 

Findings of the High Court

 

The High Court allowed the respondent’s judicial review application, granting an order of certiorari which has the effect of quashing the decision of the Industrial Court.

 

Falsification of Credentials

 

The High Court found that the respondent had taken all reasonable steps to verify the authenticity of the claimant’s qualifications prior to the dismissal. This included seeking confirmation from the Malaysian Qualifications Agency (MQA) and the New Zealand High Commission via email, both of which confirmed that PIU was not a recognised institution and/or does not exist. Additionally, PIE’s business registration had expired prior to the claimant attending the course.

 

The claimant had failed to provide credible evidence to refute these findings. Despite ample opportunities during the domestic inquiry and the Industrial Court proceedings, he did not substantiate his claim that PIU existed. The High Court held that in view of the evidence adduced by the respondent casting doubt over the existence of PIU, the evidential burden had shifted to the claimant to prove the legitimacy of his qualifications, which he failed to discharge.

 

Misrepresentation as Misconduct

 

The Industrial Court’s decision was premised heavily on the alleged absence of intention of the claimant to mislead or misrepresent the respondent about his academic credentials. However, the High Court clarified that the mere act of submitting false credentials – whether done fraudulently or innocently – constitutes a serious misconduct. Relying on the case of Ruth Chai Mei Hui v. Berjaya Steel Product Sdn Bhd [2020] ILRU 0476, the High Court emphasised that misrepresentation undermines the trust and confidence essential in an employment relationship.

 

Procedural Errors by the Industrial Court

 

The High Court found that the Industrial Court had made several procedural and substantive errors. For instance, it had disregarded critical evidence, including emails from MQA and the New Zealand High Commission, on the grounds that the makers of these emails were not called to testify. Conversely, the Industrial Court accepted a letter from the Public Service Department (JPA) adduced by the claimant allegedly recognising a degree from PIU, even though the authenticity of the letter was challenged, and its maker was not called as a witness. The High Court held that the Industrial Court had clearly applied 2 separate rules of evidence.

 

Furthermore, the Industrial Court erroneously relied on the fact that the claimant had been accepted into postgraduate programmes at a national public university as proof of the legitimacy of his bachelor’s degree, asserting that it was “common knowledge” that the national public university would have rejected the claimant’s placement had he submitted a falsified bachelor’s degree. However, the High Court found that there was a total absence of evidence adduced by the claimant that the national public university had properly verified his credentials before granting him placement in their programmes.

 

Therefore, the High Court found that the Industrial Court’s reliance on the JPA letter and the qualifications from the national public university was heavily misplaced.

 

On appeal to the Court of Appeal against the decision of the High Court, the Court of Appeal dismissed the appeal and affirmed the decision by the High Court.

 

Legal Implications

 

The decision underscores several important principles in employment law.

 

Duty to Verify Credentials

 

Employers are entitled to terminate employees who secure employment through false representation, provided the employer takes reasonable steps to verify the misconduct. The respondent’s investigations demonstrated due diligence, including consulting with the relevant authorities and conducting a domestic inquiry.

 

Misrepresentation and Employment Contracts

 

This case reaffirms that misrepresentation, whether fraudulent or innocent, constitutes a breach of trust. This principle is vital for employers seeking to maintain workplace integrity and ensure that employees possess the qualifications they claim.

 

Conclusion

 

The High Court’s decision highlights the serious implications of providing false credentials in job applications. It reaffirms employers’ right to dismiss employees who breach the trust underlying the employment relationship while emphasising the need for fair and thorough investigations. For employees, the case serves as a stark reminder of the importance of honesty and integrity in professional dealings. Ultimately, the decision strengthens the legal framework governing workplace integrity in Malaysia, setting a precedent for future cases involving misrepresentation in employment.

 

Practical Lessons for Employers and Employees

 

For Employers

 

Employers should:

 

(i)    Establish robust procedures for verifying academic and professional credentials during the hiring process.

 

(ii)         Ensure that domestic inquiries are conducted fairly and in compliance with procedural requirements.

 

(iii)         Document all investigative efforts thoroughly to withstand legal scrutiny.

 

For Employees

 

Employees should:

 

(i)   Provide accurate and truthful information when applying for jobs. Misrepresentation, even if unintentional, can lead to severe consequences, including termination.

 

(ii)          Be prepared to substantiate the authenticity of qualifications if challenged.

 

This article is authored by Balan Nair Thamodaran (Partner) and Reuben Raphael Joseph (Senior Associate) of Lavania & Balan Chambers. It contains general information only. The contents are not intended to constitute legal advice on any specific matter nor is it an expression of legal opinion and should not be relied upon as such.