Shearn Delamore & Co. Represent Heineken Malaysia: Court Of Appeal Affirms Duty To Disclose Conflict Of Interest

Shearn Delamore & Co. Represent Heineken Malaysia: Court of Appeal Affirms Duty to Disclose Conflict of Interest

The leading Malaysian law firm, Shearn Delamore & Co., represented Heineken Malaysia Berhad/Heineken Marketing Malaysia Sdn Bhd before the Court of Appeal in the case of Tai Lai Mun v Heineken Malaysia Berhad/Heineken Marketing Malaysia Sdn Bhd, delivering key guidance on employees’ fiduciary obligations and conflict of interest disclosures.

Background of the Dispute

The appeal arose from the dismissal of a former Area Sales Manager, based primarily on failing to disclose a conflict of interest and allowing his girlfriend (“Chan”) to be appointed as a director of SSST Connections. The Company had entered a contract with SSST Connections, providing RM320,000 as an opening sponsorship to L’Nine Pub & Grub, owned by Chan. The former employee claimed he was unaware of Chan’s directorship and shareholding in SSST Connections.

Industrial Court Decision

The Industrial Court ruled the dismissal was justified, taking into account the former employee’s influential role in dealings with SSST Connections, his introduction of Chan to the company’s director Siddieq, and official Companies Commission of Malaysia records reflecting Chan’s directorship.

The court held that Siddieq’s absence as a witness did not impair the Company’s case, as sufficient oral and documentary evidence supported the dismissal.

High Court Decision

The former employee challenged the Industrial Court’s award via judicial review. The High Court dismissed the application, affirming that knowledge of a fact can be inferred from surrounding circumstances. The court further held that the onus was on the former employee to provide evidence demonstrating his claimed lack of knowledge and to call Chan as a witness, which he failed to do.

Court of Appeal Decision

The Court of Appeal unanimously concurred with the High Court’s decision, dismissing the appeal. It found no evidence of illegality, irrationality, or procedural impropriety to warrant intervention.

Key Takeaways

• Employees have a strict duty to disclose conflicts of interest, particularly in senior roles where influence over company dealings is significant.
• Non-attendance of a witness does not automatically undermine a party’s case; courts now avoid drawing adverse inferences without evidence of withholding or suppression.
• The decision clarifies the distinction between burden of proof (on the employer to justify dismissal) and onus of proof (on the employee to support claims of ignorance regarding conflicts).
• Senior employees are held to higher standards of integrity and disclosure due to the scope of their responsibilities.

Legal Representation

The Company was represented by Vijayan Venugopal(Partner) and Jamie Goh(Partner), both Partners in the Employment & Industrial Relations Practice at Shearn Delamore & Co.

Conclusion

This ruling reinforces the critical importance of transparency and disclosure in employment relationships, particularly for senior personnel. It provides a robust reference for Malaysian employers and employees regarding conflict of interest obligations and evidentiary responsibilities in disciplinary matters.

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