Amendments to the Singapore Employment Act: The Employment Claims Tribunal – Part 3

This post is the last in our series on the Employment (Amendment) Bill (the “Bill”) which was passed by parliament on 20 November 2018. We discuss the amendments to the Employment Act (Cap. 91) (the “EA”) and how it may affect you, whether you are an employee or an employer. Click here and here if you wish to view our previous posts on the Bill. The Bill can be found here .

A. Statutory Annual Leave
Statutorily provided annual leave is presently only found in Part IV of the EA which applies to a certain group of employees. Annual leave for employees who fall outside of Part IV of the EA will be accorded according to the terms of the respective employment contracts.

The Bill will shift the annual leave provision out of Part IV of the EA into the general section of the EA. As mentioned in our first post, the Bill will cover nearly all employees (save for public servants, domestic workers and seafarers – who are covered under separate legislations) and therefore these employees will soon all be entitled to statutorily provided annual leave.

The method of calculation of the amount of annual leave which an employee is statutorily entitled to remains unchanged and can be found in the new Section 88A.

B. Salary Deductions
The Bill would require employers to obtain their employees’ written consent before making any deductions from their salary for the following:
i. deductions for house accommodation supplied by the employer;
ii. deductions for such amenities and services supplied by the employer
iii. any other deductions which are not identified in the EA

At present, deductions for house accommodation supplied by the employer and deductions for such amenities and services supplied by the employer can be made without the employee’s consent.

The Bill also accords further protection to employees in this respect as it expressly provides that an employee’s written consent in relation to the above deductions may be withdrawn by the employee at any time before the deduction is made by giving a written notice of withdrawal to the employer. Importantly, the employee cannot be penalised by the said withdrawal of consent.

The Bill will remove the ability of an employer to make deductions for the actual cost of meals supplied by the employer at the request of the employee. Further, the Bill will entitle an employer to deduct sums for “unearned employment benefits” which will include things such as annual leave taken in advance. Employers will be pleased to note that the ability for employers to make deductions for salary over-payment(s) remains unchanged.

C. Sick & Hospitalisation Leave
i. Sick Leave
Employers are required under the present EA to accord paid sick leave only if the medical certificate is issued by Government or employer-appointed doctors. This measure was put in place since the enactment of the EA in 1968 to combat frequent absences due to fictitious medical certificates.

Doctors today are registered under the Medical Registration Act (Cap. 174) and are subject to the Singapore Medical Council Ethical Code and Ethical Guidelines. There is therefore no longer a need to distinguish between medical certificates issued by different groups of doctors where paid sick leave is concerned. As such, the Bill provides that employers must recognise medical certificates issued by any registered doctor or dentist.

ii. Hospitalisation Leave
At present, an employee is deemed to be hospitalised for the purposes of determining the hospitalisation leave entitlement under the EA as long as the employee is certified ill enough to require hospitalisation irrespective of actual hospitalisation.

The Bill will change this position so that an employee is only deemed hospitalised for the purposes of determining the hospitalisation leave entitlement under the EA if:

i. warded in an approved hospital; and

ii. upon discharge is certified by a medical practitioner from said approved hospital that the employee is ill enough to need to remain hospitalised during that period or the employee will need to rest during that period in order to recover.

D. Retrenchment
The Bill would require an employer to furnish information on the retrenchment of any employee if required to do so by the Commissioner for Labour and a breach of this obligation will be regarded as a civil contravention such that an errant employer may be subjected to payment of administrative penalties.

This provision is in addition to the current obligation on employers who employ at least 10 employees to inform the MOM if 5 or more employees are retrenched within any 6 month period beginning 1 January 2017.

Please contact Kim Seah at Kim.Seah@incisivelaw.com at  for any employment law related enquiries.

 

Amendments to the Singapore Employment Act: The Employment Claims Tribunal – Part 2

This post is the second in our series on the Employment (Amendment) Bill (the “Bill”) where we discuss the proposed amendments to the Employment Act (Cap. 91) (the “EA”) and how it may affect you, whether you are an employee or an employer. Click here if you wish to view our first post on the Bill. The Bill can be found here.

I. The Employment Claims Tribunal

The Employment Claims Tribunals (“ECT“) was established under the Employment Claims Act 2016 with the aim to provide employees and employers with a speedy and low-cost forum to resolve their salary-related disputes. Parties must first register their claims at the Tripartite Alliance for Dispute Management (“TADM”) for compulsory mediation and thereafter, only disputes which remain unresolved after mediation at the TADM may be referred to the ECT.

A total of 1,190 employment claims were filed at the State Courts in the year since it launched the ECT on 1 April 2017. According to the State Courts approximately 78% of the types of claims referred to the ECT involved unpaid or short payment of salary or allowance. Other common claims referred to the ECT include disputes in respect of overtime pay and salary in lieu of notice.

Claims in respect of wrongful dismissal are presently dealt with by the Ministry of Manpower (“MOM”). If an employee feels that his/her dismissal is unfair, he/she may submit a written appeal to the Minister of Manpower who, if satisfied that the dismissal is unfair, may order the employer to either (1) reinstate the employee to the former job; or (2) pay the employee a sum of money as compensation.

The Bill will see employment disputes mechanisms streamlined as the ECT will have an increased jurisdiction to hear both salary and wrongful dismissal related claims.

II. Wider Definition of Dismissal

Another welcome change would be the expansion of the definition “dismiss” in the EA.

Presently, Section 2(1) of the EA defines “dismiss” to mean “the termination of the contract of service of an employee by his employer, with or without notice and whether on the grounds of misconduct or otherwise”.

The Bill will amend this definition to mean “to terminate the contract of service between an employer and an employee at the initiative of the employer, with or without notice and for cause or otherwise, and includes the resignation of an employee if the employee can show, on a balance of probabilities, that the employee did not resign voluntarily but was forced to do so because of any conduct or omission, or course of conduct or omissions, engaged in by the employer”.

Upon the Bill coming into effect, an employee’s involuntary resignation will be recognised as a form of dismissal if the employee can satisfy the requirements found in the amended definition of “dismiss”. This will therefore allow an aggrieved employee who has been the subject of constructive dismissal an extra avenue of recourse: the ECT.

Look out for our upcoming posts on the Bill where our discussions will include changes to sick and hospitalisation leave , obtaining consent from the employee when making deductions to salary and more!

Please contact Kim Seah at Kim.Seah@incisivelaw.com for any employment law related enquiries.

 

Amendments to the Singapore Employment Act: How will it affect you? – Part 1

On 2 October 2018, the Parliament of Singapore tabled the Employment (Amendment) Bill (the “Bill”). The Second and Third Reading of the Bill is expected to be sometime in November 2018. If the Bill is passed by the Parliament in its present form and with the President’s assent, the amendments to Employment Act are scheduled to take effect on 1 April 2019.

This post is the first of our series on the Bill where we will discuss the proposed amendments to the Employment Act (Cap. 91) (the “EA”) and how it may affect you, whether you are an employee or an employer. The Bill can be found here.

I. The Big Change
The biggest amendment which the Bill brings would be the removal of the salary cap of SGD4,500/month for professionals, managers and executive (“PMEs)”. This group of PMEs is presently excluded from the EA.
The removal of the salary cap will mean that nearly all employees (save for public servants, domestic workers and seafarers – who are covered under separate legislations) will be entitled to the benefits conferred by the EA.

Employers should conduct a comprehensive review of their employment contracts to ensure that they will be compliant with the EA when the amendments take effect. In a similar vein, employees should familiarise themselves with the statutory benefits conferred by the EA and understand any additional benefits which they may have.

The statutory benefits conferred by the EA include a minimum of 7 days of annual leave (the material section of the EA will be shifted out of Part IV of the EA which only covers certain employees and will be further discussed below), 14 days of paid sick leave and 60 days of paid hospitalisation leave, maternity benefits and childcare leave, and redress for wrongful dismissal.

II. Part IV of the EA- Raising the Salary threshold
The amendments will see the monthly salary cap in respect of non-workmen increased from SGD2,500 to SGD 2,600. This increase will see more non-workmen benefiting from benefits conferred by Part IV of the EA such as stipulated mandatory rest days, maximum hours of work, and statutory overtime pay.

In this regard, it is important to note that the salary cap for calculating overtime pay for non-workmen will also be increased to SGD 2,600.

Employers should take note of these amendments should their employee(s) now fall within Part IV of the EA as there are serious consequences should an employer not adhere to the provisions Part IV of the EA or fail to pay any salary according in to the provisions Part IV of the EA such as a fine not exceeding $5,000 for the first offence, and heavier fines and a possible jail term for subsequent offences.

Look out for our upcoming posts on the Bill where our discussions will include the revamped Employment Claims Tribunal, wrongful dismissal claims;  obtaining consent from the employee when making deductions to salary and more!

Please contact Kim Seah at Kim.Seah@incisivelaw.com for any employment law related enquiries.

 

Insurer fails in bid to reject claim for foreign worker’s medical expenses

Incisive-Law-Employment-Tribunal-Claim

In a decision[1] welcomed by employers and employees alike, the Singapore Court of Appeal (“CA”) has rejected an insurer’s argument and allowed the appellant’s claim for medical expenses arising out of a road accident in which the appellant (a foreign worker) and other local and foreign workers were injured due to the driver’s undisputed negligence.

The negligent driver’s insurer raised a curious but not unintelligent challenge to the claim for medical expenses, on the argument that since the appellant was a foreign worker and his employer is obliged under the law (namely the Employment of Foreign Manpower Act (“EFMA”) read with the Employment of Foreign Manpower (Work Passes) Regulations 2012 (“EFMR”) (collectively, “the Rules”)) to pay for the medical treatment of the foreign worker, then even in an accident scenario the employer must bear the medical expenses and cannot claim against the driver’s insurer.  The insurer further argued that allowing the claim would lead to double recovery.

In our view, the CA rightly disagreed with the insurer at various levels, of which we will highlight just two.

(1) The CA distinguished between the employer’s obligation under the Rules to pay for medical treatment in ordinary situations where there is no tortfeasor vs situations where the injury or need for treatment arises out of a tort.  Surely, in the latter scenario, the employer or the employee must be entitled to pursue its claim against the tortfeasor.  The Rules are not intended to abridge the recovery of medical expenses as between a tortfeasor and a victim, It could not be the case that the effect of the Rules would be to exonerate the tortfeasor of his common law obligation to pay for the victim’s medical expenses notwithstanding his negligence.

(2) There is no material risk of double recovery.  Whether the employer is able to claim reimbursement from his EFMA insurer is a matter between employer and insurer. If there were fraud or falsification of claims on the employer’s part, other consequences including criminal liability may follow. As between employer and employee, there can be a non-recourse loan agreement which obliges the employee to turn over to the employer any expenses recovered from the tortfeasor).

In conclusion, although it remains the broad and uncompromising duty of the employer to make payment of its foreign employees’ medical expenses even if these were occasioned by a third party tort, this does not preclude the foreign employee/his employer from recovering such expenses from the tortfeasor. This, we say, ought to be the case.

The CA also took the opportunity to opine that in a situation where the victim-foreign employee is not in a financial position to bring a suit against the tortfeasor, maintenance and champerty would not be obstacles to the provision of litigation financing by the employer insofar as the employer having made the payments for the medical expenses, would have a genuine and substantial interest in the enforcement of the claim.  This is music to the ears of many an injured foreign employee worried about the cost of enforcement.

[1] Minichit Bunhom v Jazali bin Kastari and another [2018] SGCA 22

Singapore High Court orders employer to pay seven days’ salary to employee dismissed for misconduct.

An employee was dismissed for misconduct involving forgery of documents.  He made a claim for wrongful dismissal on various grounds including an allegation that the employer had concluded that there was misconduct before “due inquiry” into the allegations.

While the employee did not succeed on his claim for wrongful dismissal, the court was minded to draw a distinction between “inquiry” and “due inquiry”.

The Judge noted that the phrase “due inquiry” means something more than just the making of inquiries and the conduct of an investigation. Otherwise the word “inquiry” alone would suffice.

In the written decision published this year, the Judge opined that the phrase “due inquiry” suggests some sort of process in which the employee concerned is informed about the allegation(s) and the evidence against him so that he has an opportunity to defend himself by presenting his position, with or without other evidence. In coming to this view, the Judge found the guide on MOM’s website that the employee concerned should have the opportunity to present his case to be a useful one. The opportunity to present one’s case accords with notions of justice and fairness especially since serious consequences may follow.

In order for an employee to be given an opportunity to present his case effectively, he must first be informed clearly what the case against him is. While “due inquiry” does not mandate any formal procedure to be undertaken, the more the informality the greater the danger that “due inquiry” was not undertaken.

Take away:

Employment contracts typically provide employers with the option to either terminate an employee’s employment for cause (say for misconduct) or with notice.  If the employer elects to terminate for cause, it should be mindful to ensure that “due inquiry” is conducted into the allegation against the employee.  Although on the facts of this case the employer was only ordered to pay for seven days’ worth of salary (namely the sum of S$5,512.98) that was as the facts suggested that even if the employer had conducted a due inquiry the process may not take more than seven days to complete.  This does not mean that in every case the court will simply order seven days’ worth of salary as compensation for failure to conduct due inquiry. Where no formal process is undertaken, the courts may be less sympathetic to the employer as the courts have to balance the practicality of the employer’s business operations with the employee’s right to be protected from summary dismissal without being heard. 

What damages may an employer have to pay for breach of duty?

A year after the Singapore Court of Appeal (“CA”) clarified the principles and factors that the Singapore courts will apply and take into account when considering an employer’s duty of care in the provision of a reference for its employee, the Singapore High Court awarded the same employee with the sum of S$4,026,000 for the employee’s loss of earnings (see Ramesh s/o Krishnan v AXA Life Insurance Singapore Pte Ltd [2017] SGHC 197).

At first glance an award of S$4 million in damages to a former employee looks like an astronomical figure but is it really?

  1. The sum awarded was for 5+2 years’ worth of annual loss of earnings from August 2011 to July 2018, the first 5 years’ worth being for loss of earnings and the next 2 years’ worth being for loss of future earnings (although the employee sought 4 years’ worth of loss of future earnings).
  2. The employee’s remuneration in the preceding 3 years was equal to or far more than the average sum awarded for the 7 year period. In 2009 he earned S$694,963.55.  In 2010 he earned S$2,389,629.98.  In 2011 he earned S$1,702,250.87.
  3. The employee had sought S$27 million in loss of earnings based on an estimate that he would have earned S$3m in year 1 and S$6m per year for the next 4 years.
  4. He also sought S$15 million in loss of future earnings for the next 4 years on the basis that he would take about 4 years to rebuild the 100-adviser agency he would otherwise be operating by now.
  5. No aggravated damages were awarded although he sought 50% of his loss of actual and future earnings as the sum of aggravated damages.

What factors were considered, or what formula did the Court apply?

  1. When a tortious wrong has been committed by a defendant, the plaintiff ought to be restored to the same position as if the tort had not been committed. That is the aim of an award of damages.
  2. In cases where a plaintiff seeks compensation for the loss of earnings or profits it would otherwise have received but for the defendant’s tortious action, the courts will engage in the “hypothetical exercise” of estimating the loss, provided that the plaintiff adduces sufficient evidence. The evidence is not assessed on the basis of a balance of probabilities. Rather, the court does its best to evaluate the chances, taking all significant factors into account.
  3. The employee was leaving AXA for Prudential and the CA found that Prudential eventually decided not to hire the employee because of AXA’s significant delays in responding to Prudential’s background checks on the employee. Thus, but for AXA’s negligence, Prudential would have hired the employee.
  4. It then follows that this is not a mere ‘loss of chance’ case, and all losses arising from AXA’s negligence are recoverable in full, subject only to mitigation and the requirement that the losses suffered be a reasonable foreseeable consequence of the tort.
  5. Loss of the high remuneration he would have earned in Prudential is a reasonable foreseeable consequence of the negligence.
  6. Damages were awarded for loss of earnings from August 2011 (assuming that but for AXA’s negligence the employee would have started work with Prudential within 6 weeks of his application) to July 2016 (which is when the CA released its decision in favour of the employee and thus ‘vindicated’ the employee’s reputation).
  7. However, the sum of damages was not based on the employee’s estimation of his likely growth in Prudential or his past success in AXA as there were too many uncertainties in those estimations. Instead, more conservative estimates would be based on the Establishment Package offered by Prudential (although it was both a draft and a conditional offer).  The Establishment Package had included a commencement allowance of S$675,000 and monthly pay of S$65,625 for the first 12 months and S$43,750 for subsequent months.
  8. Aggravated damages, unlike punitive damages, serve a compensatory function – they are awarded to augment a sum awarded in general damages to compensate for the enhanced hurt suffered by the plaintiff due to the aggravation of the injury by the manner in which the defendant committed the wrong or by his motive in so doing.
  9. Aggravated damages can be awarded in appropriate negligence claims but exceptional or contumelious conduct or motive in committing the wrongdoing is necessary. However, in this case, there was no finding of bad faith on AXA’s part nor was there any proof that AXA’s dominant motive was to injure the employee.

This case (both in terms of the decisions on liability and on damages) encapsulates many issues arising from allegations of negligence on an employer’s part and looks set to be the precedent for the relevant legal principles for at least the near future.

Click here to read an earlier article summarizing the CA’s findings on an employer’s duty of care.

Arising out of and in the course of his employment

Incisive Law Employment Blog

“Arising out of and in the course of his employment” – this phrase which encompasses two concepts – what does it mean?

An employer’s liability for compensation under the Work Injury Compensation Act (“WICA”) is set out at section 3(1) read with Section 3(6) which reads:

Employer’s liability for compensation

3.—(1) If in any employment personal injury by accident arising out of and in the course of employment is caused to an employee, his employer shall be liable to pay compensation in accordance with the provisions of this Act.

3.–(6) For the purposes of this Act, an accident arising in the course of an employee’s employment shall be deemed, in the absence of evidence to the contrary, to have arisen out of that employment.

It is noteworthy that “arising out of” and “arising in the course of” are two separate and distinct concepts. An accident has to satisfy both requirements before it qualifies for compensation under section 3(1) of WICA. An accident arising out of the employment requires a causal connection between (a) the employment (and its incidents) and (b) the accident.  In contrast, an accident arises in the course of the employment if it bears a temporal relationship with the employment.

The employee does not need to prove that the injury arose “out of and in the course of the employment” – it is the accident which needs to have arisen “out of and in the course of the employment” for an employee to be entitled to compensation under WICA.

Where an employee suffers personal injury caused by an accident which took place in the course of his/her employment, the presumption at section 3(6) of WICA kicks in and the burden of proof then shifts to the employer to prove that the accident had not arisen out of the employee’s employment.

Workplace Safety – Fatality at Bakery

Incisive Law Workplace Safety

MOM says: “Safety should never be taken for granted”

In a press release dated 17 May 2017, the Ministry of Manpower (MOM) announced that Commonwealth Culinary Creations Pte Ltd (CCCPL) was fined S$90,000 under section 11(a) of the Workplace Safety and Health Act for failure to ensure that its workplace is safe and without health risks to every person within the premises, which caused the death of an employee who slipped on the production floor on 21 August 2015.

MOM’s investigations revealed that CCCPL had failed to:

1. Keep floor conditions safe;
2. Provide anti-slip floor mats; and
3. Install warning signs.

Take-away:

None of the three precautionary safety measures mentioned above which should have been put in place to ensure workplace safety are novel or require excessive effort. Yet it is often precisely the most obvious of measures that are taken for granted. The consequence is unnecessary injury (or in this case, loss of life) for the employee and damage to the company’s reputation and finances. Borrowing from MOM’s press release: “Safety should never be taken for granted.”

Employer’s Negligence

Incisive Law Employer Negligence

Employer cannot rely on the fact that its worker did not have a work permit, to deny claim for damages arising out of employer’s negligence.

In a recent decision of May 2017, the Singapore High Court awarded an injured worker 80% of his claim for damages although the defendants (namely the employer Dongwu Steel Industry Pte Ltd and the employer’s director Mr Chen) argued that the worker was not entitled to claim as he was working for Dongwu without a permit.

At the time of the accident, the worker was employed by another company (SPG Marine) with a work permit only for his work for SPG Marine, and was moonlighting at Dongwu’s worksite at the instructions of Mr Chen.

The defendants argued that public policy militated against imposing a duty of care on the defendants as employers, as any contract of service entered into between the parties would have been contrary to the Employment of Foreign Manpower Act which clearly prohibits moonlighting by foreign employees. This argument was not accepted by the High Court as the judge noted that it “blatantly ignores the fact that the defendants themselves had breached the law by employing a foreign worker without a valid work permit to work for them”.

What this case tells us:

Do not assume that there is some lower degree of duty of care towards workers who assist on a shorter term basis. Employers should not “discriminate against employees whom they choose to hire despite knowing that it is illegal”.

Director’s Liability for Workplace Safety

Incisive Law WSHA

Personal liability for the managing director in addition to sanction of the company, for breach of Workplace Safety and Health Act (“WSHA”).

In a press release dated 19 May 2017, the Ministry of Manpower (“MOM”) announced that both TGG Pte Ltd (a main subcontractor carrying out reinforced concrete structural works and mechanical and electrical works) and TGG’s managing director (“MD”) have been fined for breach of the WSHA resulting in the death of one of their workers. TGG was fined S$270,000 while its MD was fined S$40,000.

At the time of the accident, formwork dismantling on the 38th storey and catch platform dismantling on the 31st storey were taking place concurrently. When a worker at the 38th storey attempted to lift a formwork frame by himself and fell, the frame dropped and struck an adjustable base plate which then fell into the lift shaft and struck the worker on 31st storey. The latter worker succumbed to his injuries.

MOM’s investigations revealed the following failures on TGG’s part:

1. Untrained workers for the formwork dismantling;

2. Risk assessment (“RA”) and safe work procedure (“SWP”) for formwork dismantling not disseminated to those carrying out the works and safety measures identified not taken;

3. No RA and SWP for catch platform dismantling at the 31st storey;

4. Failed to properly coordinate works and ensure that safety netting was installed; and

5. Failed to address the risk of falling from height.

TGG was charged under section 12(1) read with section 20 of the WSHA for failing in its duty as an employer to take, so far as was reasonably practicable, measures that were necessary to ensure the safety and health of its employees at work.

TGG’s MD Mr. Kwek was charged under section 48(1)(b) read with section 12(1) and section 20 of the WSHA, for failing in his duty as the MD of TGG to exercise all such diligence to prevent the commission of the offence by TGG.

Take-away: 

Senior management responsible for having oversight of the day to day operations and business of the company should be alerted to the fact that they too can be sanctioned for breaches pertaining to the workplace safety. At the end of the day, for there to be a “workplace safety culture”, the people running the business will have to instil their safety-first attitudes, behaviours and mindsets throughout the organisation.