Chan Miu Yin v Philip Morris Singapore Pte Ltd

• Jurisdiction: Singapore
• Judge: Shaun Leong Li Shiong AR
• Judgment Date: 04 July 2011
• Neutral Citation: [2011] SGHC 161
• Court: High Court (Singapore)
• Docket Number: Suit No 152 of 2011 (Summons No 1924 of 2011)
• Year: 2011
• Published date: 12 July 2011
• Hearing Date: 30 May 2011
• Plaintiff Counsel: Tan Chau Yee (Harry Elias Partnership LLP)
• Defendant Counsel: J. Sathiaseelan and Ramesh Kumar (Allen & Gledhill LLP)
• Subject Matter: Civil Procedure,Employment Law
• Citation: [2011] SGHC 161

Shaun Leong Li Shiong AR: Introduction

The present striking-out application raises the interesting question of whether it is plain and obvious that a former employee’s claim against the former employer for damages in having been dismissed in an unfair manner, or in bad faith, discloses no reasonable cause of action.

The plaintiff is a former employee of the defendant, and she claimed to have been dismissed in an unfair manner, and/or dismissed in bad faith, by the defendant. The defendant brought an application to strike out the plaintiff’s claim, principally on the basis that a claim brought by a former employee against an employer for the unfair manner of dismissal and dismissal made in bad faith is not recognised under the law. I have explained how it is not plain and obvious that the law does not recognise a former employee’s claim in damages for the unfair manner of dismissal and dismissal in bad faith (see especially [38]–[40], [43]-[45], [48]-[51], [57]-[59]), notwithstanding the seminal House of Lords’ (as it then was) decision of Johnson v Unisys Ltd [2003] 1 A.C. 518 (“Johnson v Unisys”) and the developments subsequent to the decision.

Nevertheless, in view of the plaintiff’s material admissions in the pleadings, I found the claim to be inescapably and fundamentally flawed, the continuance of which would achieve no practical result other than to advance the plaintiff’s collateral interests in pursuing the defendant to pay her more than what she was contractually entitled to under her employment contract. The claim is therefore struck out as it is frivolous, vexatious, and an abuse of proceedings.

Factual background

The plaintiff entered into a written contract of employment with the defendant pursuant to a letter of appointment dated 26 June 1997, where the plaintiff was appointed the manager of Information Systems. Its terms included a discretionary variable bonus in addition to the salary, and a termination clause, the relevant parts of which has been reproduced as follows (“the termination clause”): 9. Termination

... your service with the Company may be terminated by either party giving to the other not less than one(1) month’s notice in writing or one(1) month’s salary in lieu of notice.

Your employment may be terminated immediately by the Company without prior notice if you shall at any time: -

(i) Commit any serious or persistent breach or any of the terms of your employment; or (ii) be guilty of any grave misconduct or wilful neglect in the discharge of your duties; or (iii) become bankrupt or make any arrangements or composition with your creditors.

The plaintiff was employed by the defendant for about 13 years before her employment was terminated on 21 January 2011. According to the plaintiff, her contract of employment was terminated because the defendant had wanted to “silence her”, as she had highlighted several unlawful activities that the defendant was allegedly involved in. Specifically, in 2009, the plaintiff had raised some questions regarding the defendant’s conduct of alleged unlawful marketing activities to the defendant’s then general manager, one Mr Daniel Touw.

Subsequently, on 17 June 2010, the Health Sciences Authority (“HSA”) preferred two charges against the defendant (the legal proceedings in connection with these two charges were on-going as at 29 March 2011). Under the two charges, it was alleged that the defendant had published advertisements that contained express inducements to purchase a tobacco product.

On 2 August 2010, the plaintiff again highlighted the defendant’s alleged unlawful marketing activities, this time to one Mr Martin Inkster (“Mr Inkster”), the general manager who had replaced Mr Touw. According to the plaintiff, she had strongly advised Mr Inkster to discontinue those alleged unlawful marketing activities.

During a performance review on 14 January 2011, Mr Inkster informed the plaintiff that her work performance for the year 2010 was assessed as “improvable”, which was the lowest rating under the defendant’s appraisal process. The appraisal was based on Mr Inkster’s personal assessment of the plaintiff’s work performance, as well as on the assessment provided by Ms Jennie Chan, the director of Information Systems Asia, and Ms Hsu King Lan, who was Ms Jennie Chan’s immediate supervisor.

It was not disputed that the plaintiff had received relatively positive annual appraisals prior to the year 2008, and that the plaintiff had received a few awards in recognition of her service to the defendant, the last of which was received in around November 2008. However, it was also common ground between the parties that the plaintiff had been given the lowest appraisal rating of “improvable” for three consecutive years, from 2008 to 2010.

On 17 January 2011, the defendant, through Mr Inkster and Mr Chua Chee Wee (the defendant’s Human Resource officer) (“Mr Chua”) offered to terminate the plaintiff’s employment with payment of one month’s salary in lieu of notice in accordance with the termination clause, and an ex gratia payment of S$40,000. The plaintiff requested for more time to respond.

Mr Inkster and Mr Chua met the plaintiff in the morning of 21 January 2011, when the plaintiff rejected the defendant’s offer made on 17 January 2011. According to the defendant, the plaintiff had, at this meeting, alleged that Mr Inkster had conspired to terminate the plaintiff’s employment because; the plaintiff had highlighted several unlawful activities that the defendant had allegedly been involved in to Mr Inkster on 2 August 2010, and that the plaintiff had in her possession information that may be damaging to the defendant in the legal proceedings related to the two charges preferred by HSA. Mr Inkster rejected these allegations and maintained that her dismissal was due to the plaintiff’s poor work performance as reflected in her getting the lowest rating under the defendant’s appraisal process. Mr Inkster thereafter informed the plaintiff that if the terms of the 17 January letter were rejected, the defendant would be constrained to terminate her employment in accordance with the termination clause in the letter of appointment, and asked the plaintiff to re-consider the offer.

Mr Inkster and Mr Chua met the plaintiff again in the afternoon of 21 January 2011. According to the plaintiff, she had expressed that the manner in which she was terminated was unfair, especially given her many years of contribution to the defendant, and the fact that the ex gratia payment of S$40,000 would in any case, have been paid to her as part of her incentive compensation. It was not disputed that the plaintiff found the offer of ex gratia payment of S$40,000 a paltry offer as she have heard of cases where former employees of the defendant who were dismissed were paid much more when they were dismissed. The defendant increased its offer of ex gratia payment from S$40,000 to S$75,000. The plaintiff rejected this offer.

The defendant therefore terminated the employment contract by a letter dated 21 January 2011. No reasons were given for the termination. It was common ground between the parties that no express terms of the employment contract have been breached in the termination. It was undisputed that, the termination clause has been complied with, as the plaintiff was in fact paid more than one month’s salary in lieu of notice; specifically the sum of S$26,993.47. This amount comprises the plaintiff’s one month’s salary for the period of 1 January 2011 to 31 January 2011 (S$11,706.00), the plaintiff’s one month salary in lieu of notice (S$11,706.00), the year end bonus pro-rated on a one month basis (S$975.50), transport allowance (S$625.00), mobile phone allowance (S$90.00), and payment for unconsumed accrued annual leave of 3.5 days (S$1,890.97). After taking into account the CPF deductions, the sum of S$25,519.47 was credited to the plaintiff’s bank account.

The plaintiff commenced an action against the defendant, and claimed for damages for having been dismissed in an unfair manner, and dismissed in bad faith. The plaintiff pleaded that the manner in which her employment was terminated was unfair in the following (see Reply at [18]):

...the Plaintiff had expressed that the manner in which she was being terminated is unfair, especially given her many years of contribution to the Defendant, the manner in which she was targeted to leave, how her annual leave balance was adjusted to reflect only up till 31 January 2011 even though the Plaintiff’s employ had not been terminated at the point of time, and the fact that the ex gratia payment of S$40,000 offered in the 17 January Letter would, in any case, have been due from the Defendant to her as part of her incentive compensation.[Emphasis added].

With regard to her claim of having been dismissed in bad faith, the plaintiff elaborated in the pleadings the reasons and motivations behind the dismissal (see statement of claim at [14]):

The Defendant had decided to terminate the Plaintiff’s employ due to the Defendant’s desire to silence the Plaintiff, due to:

a. the Plaintiff’s knowledge of the Defendant’s unlawful marketing activities, b. the Plaintiff raising questions regarding the Defendant’s conducting [sic] [of] any unlawful marketing activities and advising the Defendant to discontinue those activities and to set things right, c. any possible discriminatory evidence that [the Plaintiff] may have against the Defendant’s such activities (including but not limited to the current charges by the [Health Sciences Authority]), d. [the Plaintiff] having continued access to sensitive documents if she were to continue to be under the Defendant’s employ, and/or e. The fact that she may one day be summoned to testify against the Defendant with these evidence that she had access to, given her strong...