Comment

• Citation: (2019) 31 SAcLJ 316
• Author: Ravi CHANDRAN LLB (National University of Singapore), LLM (Cambridge); Associate Professor, Department of Business Policy, School of Business, National University of Singapore.
• Publication year: 2019
• Published date: 01 December 2019
• Date: 01 December 2019

I. Introduction

1 The Employment (Amendment) Bill1 (“the Bill”) seeks to make significant changes to the Employment Act,2 and it has been announced that these changes will come into force on 1 April 2019.3 While various changes have been introduced, the aim of this comment is to focus on those which directly or indirectly relate to termination of employment. On the whole, the changes are to be welcomed as they further advance the rights of employees, but there are some implications and uncertainties relating to termination which this comment hopes to highlight. All sections referred to are with reference to the Employment Act as amended by the Bill4 unless otherwise stated.

II. Summary of key changes

2 Though the Bill has introduced various changes, three are most pertinent to the issue of termination. The first is the definition of the term “employee”. Prior to the amendments, persons employed in a managerial or executive position were not covered unless they were earning $4,500 or less a month.5 As part of the amendments, all employees in managerial or executive positions are covered, regardless of salary,6 other than those working for the Government or statutory boards.7 The second is the definition of the term “dismiss”. Prior to the changes, “dismiss” meant “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”.8 Following the amendments, “dismiss” has been defined to mean the termination of the:9

… 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.

While the wording is slightly different from what it was previously, the real significant change is the inclusion of constructive dismissal.10 Prior to the amendments, it was not clear if constructive dismissals were covered. However, now they clearly are. Third, formerly, if the employee considered that his or her dismissal was without just cause or excuse, the employee could make representations to the minister in writing. However, now, such claims have to be brought to the Employment Claims Tribunal.11

III. Due inquiry

3 The first section that will be referred to is s 14(1) of the Employment Act which provides that “an employer may after due inquiry dismiss without notice an employee employed by him on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of his service”.

4 As the section refers to dismissal without notice, it is likely to refer to summary dismissal.12 In common law, there is no necessity for a due inquiry when summarily dismissing an employee unless the contract provides for it.13 While this provision has not undergone change as part of the 2018 amendments, now that executives and managers are not an excluded category, there has to be a due inquiry in so far as such employees are summarily dismissed for misconduct without notice.

5 However, in addition to s 14(1), s 11(2) provides that “either party to a contract of service may terminate the contract of service without notice in the event of any wilful breach by the other party of a condition of the contract”. Unlike s 14(1), s 11(2) does not require an employer to hold a due inquiry before summarily dismissing an employee. It is possible for the employee to be guilty of misconduct without there being a wilful breach. For instance, if the employee is grossly careless in not observing safety procedures, there could be misconduct without there being a wilful breach, as wilful breach requires intention.14 However, it is difficult to envisage a situation where there could be a wilful breach without there being misconduct. Whatever the case, in so far as the wilful breach can amount to misconduct, it is likely that the employer who wants to summarily

dismiss the employee would have to hold a due inquiry. On the other hand, in so far as the breach does not amount to misconduct and the employer is trying to summarily dismiss the employee on some other ground (such as perhaps incompetence),15 the Employment Act does not impose an obligation to hold a due inquiry.

6 Further, s 10(1) of the Employment Act allows the contract of employment to be terminated by notice, and s 11(1) allows the contract of employment to be terminated by giving salary in lieu of notice. If there is misconduct, the question may arise whether the employer can, instead of holding a due inquiry, terminate the services of the employee by means of notice or salary in lieu of notice. Noor Mohamed bin Mumtaz Shah v Apollo Enterprises Ltd16 suggests that the Employment Act does confer on the employer a choice. Thus, if there is misconduct, it would not be mandatory for the employer to carry out a due inquiry under s 14(1), and if the employer wants to, the employer can terminate the services of the employee by giving notice or salary in lieu of notice.

7 However, having said that, if the employer decides to terminate the contract pursuant to some other section17 and does not follow any procedure to ascertain whether there are sufficient grounds for the termination, an employee who feels that the dismissal has been without just cause or excuse may lodge a claim pursuant to s 14(2) of the Employment Act. Thus, generally, to prevent such problems from arising, it might be good practice to have a due inquiry even in such circumstances.

8 What will amount to a “due inquiry” was elaborated in recent case of Long Kim Wing v LTX-Credence Singapore Pte Ltd18 (“Long”). The case did not relate to the Employment Act as such. Nonetheless, the principles stated are quite general in nature and likely to be equally applicable. Woo Bih Li J delivering the judgment of the court stated:19

It seems to me 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. The phrase 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. …

However, in order for an employee to be given an opportunity to present his case effectively, he must first be informed[20] clearly what the case against him is. As mentioned above, this includes the allegation(s) and the evidence against him. 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. …

As indirectly alluded to above, if an inquiry is rushed through,21 that may not amount to a due inquiry. A due inquiry may also involve giving the employee a right to make arguments in mitigation.22 The question might also arise as to what happens if an employee demands legal representation during the inquiry in the absence of an express right in the contract. In the UK, there is no such right unless the matter falls within the purview of the European Convention on the Protection of Human Rights and Fundamental Freedoms23 or the contract provides for it, though there is recent authority to the effect that this could possibly also be governed by the implied term of trust and confidence.24 In the context of the Employment Act, it is suggested that there is unlikely to be any such accompanying right. This is because the general framework of the Employment Act is not to allow such representation at least at the lower levels of dispute resolution, probably so as not to protract the settlement of disputes involving small claims. For instance,

hearings before the Commissioner25 and the Employment Claims Tribunal 26 prohibit legal representation. If these venues exclude such a right, it may be argued that such a right can be expected within the employer's organisation as that too could result in protracting the process. The employee is also unlikely to be prejudiced, since if there is no due inquiry, that in itself can subsequently be challenged. Nonetheless, to make the position clearer, the employer may wish to expressly exclude such a right in the contract of employment. Also, in line with what was stated in Long above, there is no specific formal procedure to be undertaken. Thus, the inquiry does not have to be conducted like a quasi-judicial proceeding, with opportunity to cross-examine witnesses, for instance.27 Similarly, generally speaking, the employee need not be given access to witnesses' statements, if any.28

9 With high-level employees now being covered by the Employment Act, it is likely that there will be more challenges as to whether there was indeed a due inquiry. Hence, needless to say, it would be good for employers to maintain good documentation, for instance, as to the process and what transpired during the hearing.29

IV. Unfair dismissal – General

10 Following the 2018 amendments, s 14(2) of the Employment Act provides that “where a relevant employee considers that he has been dismissed without just cause or excuse by his employer, the employee may lodge a claim under section 13” of the Employment Claims Act 201630 “for one of the following remedies”, namely, reinstatement in his former employment or compensation. The term “relevant employee” is set out in s 14(2A) and effectively includes all employees covered by the Employment Act, other than managers or executives who are terminated by notice or salary in lieu of notice, in which case they would have to be employed with the employer for at least six months to be eligible to bring a claim.31 The time limit is set out in the Employment...