Updated 2.50pm with MFSA reply

The Malta Financial Services Authority has been ordered to pay almost €414,000 in damages to a former top official who was unjustly fired by then CEO Joseph Cuschieri.

Reuben Fenech, the chief operations officer of the authority since 2018, sued his former employer before the Industrial Tribunal after he was dismissed with immediate effect in September 2019.

Just three months previously he had received a letter of appraisal from the head, People and Culture, stating that his performance was “meeting expectations.”

Cuschieri had added an attachment to that letter, listing a number of areas which he wanted Fenech to improve.

In July 2019, Cuschieri sent Fenech “additional feedback,” again highlighting those areas and promised to send further feedback in August.

But during a face-to-face meeting in September, Cuschieri told Fenech that his job was being terminated with immediate effect.

Fenech contested that decision but to no avail.

He then took his grievances before the Industrial Tribunal.

The Tribunal, chaired by Joseph Gerada, found that Fenech’s dismissal was “premeditated” and unfair since Cuschieri did not follow the procedures set out in the Staff Handbook. That was an integral part of the employment contract.

When testifying before the Tribunal, Cuschieri said that he could not appoint a disciplinary board since it was the COO who normally chaired such a board.

The Tribunal observed that although an executive official like Fenech was to be scrutinised by a higher organ, that did not diminish his right to disciplinary measures that were transparent, objective and just, like all other employees.

The CEO could have appointed a disciplinary board headed by the Director of Human Resources and Development or some other official purposely appointed for the task by the Board of Management and Resources.

Instead Cuschieri placed himself in the “precarious position of prosecutor and judge.”

As for the allegations that Fenech’s performance was lacking, that too should not have been handled any differently from poor performance by other fellow employees.

There had been several conversations between Cuschieri and Fenech in the build-up to the dismissal. Yet the Tribunal said it could not know what was discussed since no records were kept.

No warning

The tribunal said letters of feedback were no substitute for warning letters. Indeed, Fenech never received any warning about poor performance.

While Cuschieri’s comments were “rather generic”, Fenech rebutted with concrete examples and asked for the opportunity to discuss and clarify further, the Tribunal observed.

It was evident that the two parties had  “diametrically opposed” views on the situation.

The tribunal said Fenech alone had been blamed for an early voluntary retirement scheme that was introduced by the Authority after discussions with the CEO and other top officials.

No one flagged the need to include a clause in the scheme to  prevent a ‘revolving door system.’

When the scheme attracted criticism by the media, Fenech was blamed for not having suggested such a clause.

He was also criticised for not communicating. But evidence showed that Fenech was always accessible to his colleagues, roped in everyone and sought solutions that would ultimately bear results.

Different work ethics

Yet his work ethic did not match that of the CEO.

Cuschieri claimed that his style was “pragmatic and result-oriented” whereas Fenech was “pedantic and picking on details.”

Fenech, on the other hand, said that he based his work practices on public sector rules.

Cuschieri had an “arbitrary” style, ignoring established procedures, claimed Fenech.

Among several examples cited, Fenech said that Cuschieri would first sign direct orders then get angry after being told that the necessary approval for such orders had not yet been issued.

The COO insisted on abiding by the rules when introducing changes to vacation leave, travel, recruitment, procurement, risk management, performance system and budgets.

He complained that Cuschieri would often alter a decision which would have been taken at top level, and would do so unilaterally.

When Cuschieri dismissed Fenech, the move triggered disagreement at Board level with various members voicing concern that the disciplinary action was not in line with the Staff Handbook, the Tribunal noted. 

Faced with such a situation, “a typical principal” would have reconsidered his decision “even if only as a sign of respect towards the Governors of the Public Institution.”  

Instead, it was evident that Cuschieri had already decided to dismiss Fenech when he sent him the second additional feedback in July.

When all was considered, Fenech’s work style was no attempt to hinder the CEO in attaining corporate objectives.

Fenech worked in a competent and professional manner to achieve those objectives according to the rules, in the best public interest and in a sustainable manner.

Being fired from such a high-profile post had serious and far-reaching repercussions on Fenech’s career. He never lost the trust of the MFSA’s Board of Governors who should have better scrutinised Cuschieri's actions.

The Tribunal concluded that the dismissal was therefore unfair and awarded Fenech €413,688, of which €50,000 are moral damages, payable by the Authority by the end of this year.

Fenech was also to get back his seniority and his Jobsplus records were to be amended to show that his dismissal was unjustified.

Lawyers Kathleen Calleja Grima and Mark Muscat assisted Fenech.

MFSA has not yet said whether it intends to appeal the tribunal decision. When contacted, an MFSA spokesperson said the authority "is evaluating the outcome of the Industrial Tribunal’s decision and will take the necessary decisions in due course.”

PN: Cuschieri must be removed from Project Green CEO post

In a statement after the industrial tribunal's decision, the Nationalist Party called on the prime minister to remove Cuschieri from his current post as CEO of Project Green, saying he had committed an injustice and ruined an employee's career. 

"Following this decision, which took five years to be delivered, Joseph Cuschieri’s position as CEO of Project Green is no longer tenable. (Environment) Minister Miriam Dalli must immediately remove Cuschieri, and if she does not, Prime Minister Robert Abela must dismiss him himself," the PN said. 

"If he is not removed, Robert Abela will be perpetuating a culture of impunity in the country. He would be rewarding those who do wrong, break the law, and ruin people’s lives."

The party said the MFSA must immediately take the necessary legal action to ensure that the damages rightly owed to the employee are not paid out of public taxes but by those who blatantly and shamelessly committed this illegality.