YONG KONG CHUAN v AMFUNDS MANAGEMENT BERHAD [2025] 3 ILR 312
Factual Background
The claimant, a Fund Manager, was dismissed after approving an erroneous redemption transaction caused by a maker’s manual input error that escaped the checker’s verification. The employer alleged negligence, but the claimant maintained he followed the established approval process within an extremely limited timeframe.
Summary of the Findings and Principles
The Industrial Court found that the claimant’s dismissal was without just cause or excuse because the employer failed to establish that he had committed misconduct warranting dismissal. Central to the Court’s reasoning was that the claimant had acted consistently with the employer’s long-standing and accepted operational practice. On the day of the incident, he was required to review and approve 26 feeder fund transactions within an extremely limited timeframe, having received the relevant documents only at approximately 1.23 p.m. with a deadline of 2.00 p.m. The Court accepted that, in these circumstances, the claimant performed the same verification process for all 26 transactions and had not arbitrarily departed from the standard expected of him. It was therefore unreasonable for the employer to single out the AmChina transaction while accepting the identical verification process for the remaining 25 transactions.
The Court rejected the employer’s attempt to impose a more onerous duty on the claimant after the incident. Although the employer argued that the claimant, as the Fund Manager and Capital Markets Services Representative’s Licence holder, was the “final gatekeeper” responsible for ensuring the accuracy of the redemption documents, the evidence demonstrated that the employer had, for years, accepted a workflow in which the claimant relied on the maker-checker process and performed only a high-level review of the transactions. If the employer genuinely expected the claimant to independently verify every figure, detect manual amendments, or supervise the work of the maker and checker, it ought to have established a different procedure, provided sufficient supporting documents, and allocated adequate time for such verification. An employer cannot retrospectively redefine an employee’s responsibilities simply because an error subsequently occurred.
The Court also placed significant weight on the systemic shortcomings within the employer’s own internal processes. The erroneous redemption arose because the maker manually amended the redemption quantity after the document had been reviewed by the checker, yet this weakness in the process had previously been highlighted by the claimant during an internal audit. Despite being aware of the risk of human error, the employer failed to implement interim safeguards or monitoring measures before the incident and had still not adequately addressed the issue even afterwards. The Court considered these deficiencies highly relevant in determining whether the claimant alone should bear responsibility for the incident.
Another important issue considered by the Court was the inconsistency in the employer’s disciplinary approach. The claimant argued that the maker, who manually inserted the incorrect figure, and the checker, who failed to detect the amendment, were not dismissed despite the Operational Risk Report identifying the root cause of the error as the maker-checker process. The Court found it difficult to reconcile why only the claimant was subjected to disciplinary action when the alleged failure in verification, if accepted, would equally have applied to all 26 feeder fund transactions processed in the same manner. This selective attribution of responsibility undermined the employer’s assertion that the claimant had acted negligently.
The Court further accepted the claimant’s contention that several allegations relied upon by the employer had evolved after the dismissal. While the show cause and termination letters focused principally on the claimant’s alleged failure to detect the “7 million units” error and to ensure that the checker had performed her duties properly, the employer later sought to justify the dismissal by relying on alleged failures to verify every figure in the redemption documents, to maintain the 95/5 asset allocation requirement, and to comply with other regulatory obligations. The claimant argued that these additional allegations were afterthoughts which had not formed part of the original disciplinary charges and had therefore deprived him of a fair opportunity to answer them. Although the Court ultimately resolved the dispute on the basis that no misconduct had been proven, its reasoning reflected the established principle that an employer must justify a dismissal on the genuine reasons relied upon at the time the dismissal decision was made, rather than by introducing new grounds during litigation.
The Court also took into account the practical realities of the claimant’s role. The evidence showed that he was not provided with the client’s mandate or sufficient information to independently determine whether the redemption amount was incorrect. His responsibility was to confirm that the proposed redemption satisfied the relevant asset allocation requirements based on the documents forwarded to him, rather than to reconstruct the calculations prepared by other departments. The Court was therefore not persuaded that the claimant could reasonably have detected the manual amendment under the circumstances or that his reliance on the maker-checker system constituted misconduct.
Ultimately, the Court concluded that the claimant had discharged his duties diligently in accordance with the employer’s established procedures and that his conduct did not amount to grievous misconduct. The decision reinforces several important employment law principles: an employer cannot discipline an employee for failing to meet standards that were never previously required; disciplinary standards must be applied consistently across similarly situated employees; employers must distinguish between individual misconduct and systemic organisational failures; and dismissal cannot be justified by advancing new allegations after the decision to terminate has already been made. For these reasons, the claimant was awarded compensation in lieu of reinstatement together with back wages.
