SINGAPORE – A 2002 resignation came back to haunt a man more than two decades later when a background check for a prospective job wrongly described his departure from his former employer as an “involuntary resignation”.
The man, Chua Kim Chuan, sued his former employer AXA Insurance – now HSBC Life – claiming the inaccurate reference cost him his new job at Prudential. He argued that an inaccurate employment report that HSBC Life gave to Prudential was defamatory.
The High Court on Sept 18 found HSBC Life had been negligent, and a statement that he had “failed to complete fit and proper exercise” was defamatory in the context in which it was made.
But Chua still lost the case because the court found he had not proved the inaccurate reference cost him the Prudential job opportunity.
High Court Justice Kwek Mean Luck said in a written judgment that the evidence showed that Prudential wanted Chua to join full-time and leave his job at Marina Bay Sands (MBS), but Chua did not want to do so.
Chua had worked for AXA from 2000 to 2002 as an insurance agent and financial services manager. He resigned in September 2002.
After AXA, he worked at Phillip Securities from 2002 to 2008. He joined MBS in 2010.
In 2023, more than 20 years after he left AXA, Chua was looking to return to the financial advisory industry and was interviewed by Prudential.
As part of Prudential’s background checks, screening company Sterling RISQ obtained an employment verification report from HSBC Life, which had taken over AXA.
The report, which was based on AXA’s electronic records, stated that Chua’s reason for leaving AXA was an “involuntary resignation”. It also stated that he had “failed to complete fit and proper exercise”.
Both statements were wrong.
Chua had voluntarily resigned. HSBC Life later found that the statement about the “fit and proper exercise” was also inaccurate. What Chua had not completed was an annual declaration.
After Chua’s lawyers wrote to HSBC Life in May 2023, the insurer checked AXA’s physical records and found the inaccuracies.
HSBC Life then wrote to Prudential in July 2023 to clarify that the two entries were incorrect and apologised to Chua.
Kwek said HSBC Life had breached its duty of care to Chua by providing the employment report with errors that communicated a negative impression of Chua.
The justice said “involuntary resignation” had a negative connotation because it suggested conduct that led AXA to ask Chua to resign.
Kwek noted that the errors would suggest that Chua had been asked to resign.
“This is defamatory, as it would lower him in the eyes of prospective employers in the financial advisory and insurance industry,” he said.
But Chua did not win his defamation claim.
Employment references are protected by the legal concept of qualified privilege, meaning a reference provider can be protected from a defamation claim unless the claimant can show that the protection should not apply, such as by proving malice.
Chua alleged that HSBC Life had acted maliciously because of personal animosity and had been reckless about whether the information was true.
The judge rejected this.
The HSBC Life employee who prepared the reference had relied on AXA’s electronic records and had no reason to harm Chua.
When the errors were discovered, HSBC Life apologised and corrected them.
Chua’s negligence claim therefore turned on a different question: whether the inaccurate reference had caused him to lose the Prudential opportunity.
This was where his claim failed.
Chua had been working at MBS since February 2010 as a dealer inspector and he wanted to keep that job while joining Prudential on a part-time basis.
After his interview with Prudential, he was told that he would have to leave MBS and join Prudential full-time.
The exchange that followed on WhatsApp became an important part of the evidence.
Prudential representative Ong Kai Xin told Chua: “You need to quit then have the MAP”, referring to Prudential’s Management Associate Programme.
Chua replied that he had “insisted and maintained from the start” that he intended to join part-time.
He explained to Ong on WhatsApp why he did not want to give up his MBS job.
“I already said I need my secured income from MBS because among other things, I have a wife who will outlived me,” he wrote.
He added: “I can’t be certain whether I’ll be able to perform as a high flier as I was b4.”
He then made the distinction that became significant in the case: “Reference check is one issue. Leaving MBS completely is another totally different issue.”
Chua later testified that he had been prepared to leave MBS for Prudential.
He explained that he had obtained permission from MBS to work as a financial representative of Prudential because he wanted to keep the option open to work part-time, but had not committed to a decision.
But Justice Kwek found this was an “afterthought” because it was not stated in Chua’s affidavit and contradicted his WhatsApp messages.
Prudential said in court that its main concern was Chua’s concurrent employment at MBS.
Its representative gave evidence that Chua’s job application had not been rejected outright, but that the insurer could not proceed with his onboarding while he continued working at MBS.
The application eventually lapsed after Chua did not follow up.
Justice Kwek said that while there was evidence that Prudential was looking into the reference provided by HSBC Life, there was no evidence that Prudential had declined to offer Chua a job because of the two errors in HSBC Life’s report.
“What is clear on the evidence is that Prudential required Chua to leave MBS before it could accept him and that Chua was not prepared to do so,” he said.
The case also involved Chua’s claims that inaccurate references had been given to other prospective employers between 2009 and 2023. But the court found that he could not establish when some of the alleged references had been provided.
His claims were dismissed and HSBC Life was awarded costs.
HSBC Life has since changed its procedures. The insurer told the court that it now limits employment references to the previous 10 years and checks both electronic and physical records.
