A toxic employee exhibits undesirable behaviour and contributes to an unhealthy working environment.  For example, an employee that spreads negativity, or gossip mongers maliciously. However, as such toxic behaviour is hard to define and often subjective, this leads to a question of whether an employer can dismiss an employee on these grounds.

In Afnizahanim Mohammad Saad v Kemaman Bitumen Company Sdn Bhd [2019] 4 ILR 503, the Industrial Court considered whether it was fair for a company to dismiss its employee for spreading rumours and “character assassination”.

Brief Facts

  • The Claimant was the Company’s Human Resources Manager.
  • The Company charged the Claimant with these allegations of misconduct:
    • Charge 1 : Harassing subordinates by spreading unsubstantiated rumours of a malicious nature and character assassination of a male subordinate and a female employee.
      • The allegation here was that the Claimant had on several occasions, made slanderous remarks about two employees, insinuating that they were having an affair. The rumours spread throughout the Company and resulted in a complaint being lodged by one employee.
    • Charge 2: Conduct unbecoming of a senior employee of the Company by interacting with people outside the company in an undesirable manner and causing potential loss of reputation for the Company and its shareholders
      • The Claimant was alleged to have slandered and badmouthed former employees to their new employers.
    • Charge 3 : Withholding information or making untrue statements and lying to the CEO
      • During a meeting with the CEO, the CEO informed the Claimant about complaints made against her. The CEO asked the Claimant if she had spoken to anyone else about the two employees’ alleged relationship, and the Claimant denied doing so. It was later discovered that the Claimant had spoken to multiple other employees about this issue.
  • A domestic inquiry was conducted. The Claimant was found guilty of Charges 1 and 3, and dismissed.
  • The Claimant lodged a complaint of unfair dismissal.

Court’s Findings

  • As the DI held that Charge 2 was not proven, the Court focused its decision on Charge 1 and 3 only.
  • The Court found that the Company had proved Charge 1 on a balance of probabilities. The Court observed that the Claimant’s conduct in handling the “alleged affair” between two employees “left much to be desired”. The Court noted the CEO’s testimony on why the Claimant’s behaviour warranted dismissal:

“It is important to note that the Claimant was the Head of HR at the material time. In that role, she was expected to follow the best ethical working practices as well as uphold all the policies and procedures of the Company to set an example for other employees. Instead, she conducted herself in a manner completely unbecoming of a senior management employee…


One of the key responsibilities of the HR Manager is, as the name suggests, to nurture and manage the human resources and to ensure there is a conducive, harmonious and friendly environment for the employees to work in. On the contrary, the Claimant created an environment of distrust and disharmony and tried to misuse her position to intimidate subordinates…” 

  • The Court also found that the Company had proved Charge 3 on a balance of probabilities. The Court agreed that where an employee’s conduct is incompatible with his duties, the employer may dismiss him.
  • The Claimant had acted irresponsibly and unprofessionally and also lied to the CEO. This dissolved the trust held in her, and is a misconduct in breach of the Company’s core values of integrity, and the Company’s Code of Ethics. The Court believed the Company when it said they could no longer repose the trust and confidence they had in the Claimant.
  • During trial, the Claimant alleged that she had exemplary service with the Company before these charges were levelled against her. The Court’s view was this is not enough to be considered a mitigating factor; on the contrary, past exemplary service should have been a deterrent for the Claimant to act in such a manner.
  • Overall, the Court concluded that no reasonable employer would have retained the Claimant in its employment, after being found guilty on Charge 1 and 3. It was not a suitable case for letting the Claimant off lightly with just a warning or demotion. The decision to dismiss her was reasonable and fair.

Key Takeaways

It is possible to dismiss an employee for misconduct if they behave unprofessionally or inappropriately – for example: malicious rumour mongering that damages the industrial harmony of the workplace.  It will, however, boil down to proof and proportionality. Factors considered include the employee’s position in the company. Here, the charges were serious because the Claimant was holding a senior management position, and was the Head of HR, no less.

The Claimant’s version of events was that she did not want the Company’s good name to be tarnished, given that the two employees were working in Kemaman, which had a conservative local community.  The Claimant’s view was that she was acting in the Company’s interests, by trying to mitigate against the alleged affair.

The Company proved its charges against the Claimant because they had witnesses to testify about the rumours spread by the Claimant. For example, one employee who was the subject of the gossip testified in Court about the rumours, her confrontation with the Claimant,  the mental distress suffered and possible damage to her marriage. Another witness testified that he heard the Claimant making those slanderous remarks during a lunch outing with the Claimant and another witness.

Malicious and slanderous gossip should also be distinguished from petty “tea room” gossip, which can be annoying but is mostly harmless. An employer who wishes to take disciplinary action against an employee who behaves unprofessionally by spreading rumours, should ensure there is sufficient evidence to reasonably conclude that the rumours originated from the accused employee. Direct evidence is best (an employee confirming that they heard the rumour directly from the accused employee), instead of second/third hand information (an employee saying they heard it from someone else, who heard it from the accused employee). The employer should also be able to articulate why this is a misconduct,  how it has damaged industrial harmony, and why it is severe enough to warrant dismissal.


This article was written by Donovan Cheah. Donovan has been named as a Recommended Lawyer for Labour and Employment by the Legal 500 Asia Pacific 2017, 2018, 2019, 2020, 2021 and 2022, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.

Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory.  Have a question? Please contact us.


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