Industrial Court upholds manager’s sacking over RM2.52mil unpaid rent

A property management company was justified in dismissing a senior manager who failed to ensure tenants had valid tenancy agreements and neglected to pursue the recovery of RM2.52 million in overdue rent, the Industrial Court has ruled.

Industrial Court chairman Andersen Ong dismissed a claim by Hairizal Hosman, a former assistant general manager and head of marketing, sales and leasing at Encorp Must Sdn Bhd.

Hairizal was dismissed on Nov 15, 2024, over allegations of dereliction of duty and breach of fiduciary duties involving tenants at Encorp Strand Mall and Warna Avenue.

The company alleged that he had failed to ensure all tenants had valid tenancy agreements and neglected to take appropriate steps to recover outstanding rentals totalling RM2,522,037.

In his 28-page award, Ong said the evidence, including Hairizal’s admissions and internal audit findings, established that he had failed to discharge his responsibilities.

He also rejected any suggestion that Hairizal’s resignation prevented the company from taking disciplinary action.

Hairizal had tendered his resignation with three months’ notice before his dismissal, but the company rejected it and proceeded with disciplinary action.

Ong said: “The tendering of a resignation by giving notice does not, in itself, bring the employment relationship to an immediate end.”

He said the employment contract and the parties’ reciprocal rights and obligations continued until the notice period expired, allowing the company to take disciplinary action in the meantime.

The court also found no legal restriction preventing Hairizal from responding to the company’s queries, although he had cited legal advice and an ongoing Malaysian Anti-Corruption Commission investigation as reasons for not providing a substantive response.

Ong said Hairizal’s failures had exposed the company to contractual risks and significant financial loss, with outstanding rentals amounting to RM2.52 million.

“In view of the nature, seriousness and consequences of those failures, the court is satisfied that the misconduct established against him was sufficiently grave to warrant dismissal,” he said.

Ong concluded that Hairizal had been dismissed for just cause or excuse and dismissed his claim against the company.

Muis Majid and Mastura Mustafa appeared for Hairizal, while Edward Andrew Saw and Kee Shu Min represented the company.

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