Employment and Industrial Relations Update: What Happens when the Chief People Officer, the Gatekeeper of HR Fails to Protect the Bank? The Industrial Court Upholds Her Dismissal. Validation is Given to the Fit and Proper Assessment as a Continuous Threshold to be Met throughout the Employment for Senior Officers
Introduction
In January 2026, the Industrial Court upheld the dismissal of the Bank’s former Chief People Officer ("CPO") for failing to exercise due care and prudence to safeguard the Bank’s interests in the discharge of her duties in, inter alia, failing to manage the contract and corresponding benefits of the former Deputy President/Chief Executive Officer ("DP/CEO") which was under her purview. Her failure resulted in the Bank incurring unnecessary financial expenditure arising out of the above.
Brief facts
In Siti Aishah Binti Md Lazim v Bank Pertanian Malaysia Berhad1, the Claimant, the former CPO of the Bank, was issued a Show Cause Letter following findings arising from an audit by the Jabatan Audit Negara and thereafter the Bank’s subsequent internal investigations into irregularities that had arisen.
The irregularities related to, inter alia, the failure to safeguard the Bank’s interests in relation to the renewal of the former Chief Risk Officer’s contract, and the subsequent appointment of the same individual as DP/CEO who, during both roles, simultaneously served as the Covering President/Chief Executive Officer ("CP/CEO"). Specifically, while the Claimant in her capacity as CPO was responsible for managing the appointment of the DP/CEO, she failed to ensure that the DP/CEO’s entitlements were exercised in accordance with the applicable service agreement.
There were no clauses in the service agreements relating to the entitlement of the Bank’s vehicle and driver concurrently. The contract only provided for the payment of a car allowance and driver allowance. In the event a driver was utilised, the monthly driver allowance was to cease. Although the Chief Risk Officer (and later in her subsequent role as DP/CEO) was appointed as CP/CEO, the appointment only provided for an acting allowance without any other benefits.
Despite not being entitled to a Bank’s vehicle, the Claimant, as the CPO, failed to ensure that the Chief Risk Officer (and later in her subsequent role as DP/CEO) ceased to receive a monthly car and driver allowance in the duration that she utilised the Bank’s vehicle and driver for daily transportation, including the use of petrol cards and a Touch & Go card.
Thereafter, sometime after the DP/CEO ceased serving as the CP/CEO, the DP/CEO requested the cessation of the car and driver allowance in exchange for the use of the Bank’s vehicle and driver through an internal memorandum to the President/CEO.
The memorandum failed to disclose that she was already utilising both the Bank’s vehicle and driver neither did it set out what her contractual entitlements were at the first instance based on the service agreement. The Claimant though aware of the contents of the memorandum did not bring to the forefront the absence of such information. The initial approval of such request was subsequently withdrawn when the actual contractual benefits entitlements came to light.
The Claimant’s contention in her role as guardian of the Bank’s human resource related affairs was that, notwithstanding the express provisions of the contract, the DP/CEO was entitled to enjoy the benefits associated with the position/office of the President/CEO, namely the use of the President/CEO’s office car and driver while carrying out her duties and functions in her acting capacity. Hence, she contended there was no wrongdoing.
The Court agreed with the Bank’s decision that the Claimant’s failure to exercise due care in the discharge of her duties resulted in the Bank having incurred unnecessary expenses for the unauthorised usage of the Bank’s vehicle, driver and Touch & Go card. In the determination to dismiss the Claimant for misconduct, the management also considered whether the Claimant was a fit and proper person to remain as a senior-level employee given the nature of misconduct in question.
The Claimant contended that she should not be subjected to any fit and proper assessment under Bank Negara Malaysia’s fit and proper criteria at the point of determining the punishment to be meted out as such assessments had already been undertaken previously at the onset of employment and upon each renewal of her contract.
The Industrial Court’s decision
The Industrial Court upheld the dismissal, concluding that despite being aware of the DP/CEO’s contractual entitlements and that the CP/CEO appointment letter only provided for a monthly acting allowance without any entitlement to the Bank’s vehicle and driver, the Claimant failed to bring these matters to the attention of the Board of Directors or the President/CEO for clarification or direction.
The Court found, as the gatekeeper for HR matters within the Bank, the Claimant should have escalated the issue if there was any uncertainty regarding the DP/CEO’s entitlements. As the custodian and guardian of the Bank’s interests, the Claimant should have rectified the matter during the appointment of the DP/CEO. Given her senior role as CPO, the Claimant was found to have failed to act with the level of prudence expected of someone holding such a position.
The Court upheld the sanctity of the written terms of contract, emphasising that an acting or covering appointment does not automatically confer the benefits or privileges attached to that office unless expressly provided under the terms of appointment.
In relation to the memorandum submitted, the Court found that there had not been full and frank disclosure. The Claimant had failed to disclose the DP/CEO’s entitlements to the President/CEO and had by such conduct created the impression that the DP/CEO was entitled to the use of the Bank’s vehicle and driver.
The Industrial Court also found that the Bank was entitled to conduct fit and proper assessments at regular intervals, and that it was reasonable for senior officers of a bank to be subjected to continuous fitness and propriety evaluations, without having to wait for a fixed review period to determine their ongoing suitability.
The Claimant’s dismissal was upheld as proportionate to her misconduct. The strict requirement and adherence to integrity was reaffirmed by the Industrial Court, particularly those serving in financial institutions, where a high standard of care, honesty, and conduct is required to maintain public confidence.
Key takeaways
This decision reinforces the importance of integrity and accountability in the workplace, particularly within financial institutions.
The banking industry provides essential services to the public and is therefore subject to heightened standards of governance and accountability. Employees particularly in the banking sector, are expected to uphold a high standard of care, honesty and professional conduct. Where in doubt, ignorance is not a defence. Employees should not make assumptions. The absence of an express prohibition in a contract or the company’s policy does not equate to permission. Similarly, the absence of an express entitlement does not give rise to an implied right to claim or enjoy benefits associated with an acting position.
Senior management personnel are entrusted with leadership responsibilities and are to exemplify the highest standards of honesty, prudence and integrity in the discharge of their duties.
- Award No.: 87 of 2026.
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