Fake Degree? The Recourse Of Compensation By An Employer

In any employment contract, it is founded on the basic principles of good faith between parties. If an employee resorts to fraudulent documents to secure employment, it would certainly imply that the employer would have been deceived and mislead into entering the employment contract. It is undisputed that such acts attract criminal liability. But what about civil liability?

In KHOO KIM LOANG v. SHOCK MEDIA STUDIO SDN BHD [2018] 1 ILR 320 which dealt with a similar situation.

“The documentary evidence had shown that the claimant had submitted a false CV. The employer-employee relationship is built on trust and when an employer finds that the job has been granted to an employee based on fictitious information, this trust is automatically breached and the employer has every right to terminate the contract of employment. Thus, the termination of the claimant's employment in the instant case, by the respondent company, had been justified and with just cause and excuse.”

It would always appear that the employer right of recourse may only be limited to exercising the right to commence disciplinary proceeding which affects the employment status of the employee. However any employer would argue that the employer had not only been deceived but has suffered losses financially by remunerating an employee that utilized fraudulent documents to secure employment.

The right of recourse of criminal proceeding attracts criminal liability but the question arises that would an employer retain the right to seek compensation?

In YEW CHENG LIM v. REGAL MARKETING & TRADING SDN BHD [2011] 5 CLJ 472 the High Court dealt with a situation where the respondent had misrepresented himself by producing a degree from the University of Hull that was forged and a letter from the university confirming this which was produced before the Court. The learned High Court Judge held that;

“Having found the appellant had misrepresented and induced the respondent to enter into the contract of employment, clearly the contract becomes voidable at the option of the respondent. Here the respondent has lawfully repudiated the contract. With the repudiation, the respondent is saying they had wrongly paid and the appellant had wrongly received the monetary benefits. We are only concerned with the rights of the respondent as the innocent party because the payments would never have been made to the appellant had the misrepresentation been known to the respondent much earlier.”

The Court affirmed the claim by the company for a refund of the payments made to the appellant for the period he was employed by the respondent. It would appear that the employer has the right to seek compensation upon the court deciding that that the employment contract has been breached and is deemed void.

Thus, there cannot be any understatement of the importance of the principles of good faith between an employer and employee and by utilizing fake degree or fake documents to induce and secure employment may not only attract criminal but also civil liability for an employer to seek recourse for compensation.

Article by IRLAW2U.my

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