DEALING WITH EMPLOYEE CRIMES

• Citation: (2009) 21 SAcLJ 35
• Author: Ravi CHANDRAN LLB (Hons) (National University of Singapore), LLM (Cambridge); Associate Professor, School of Business, National University of Singapore.
• Published date: 01 December 2009
• Date: 01 December 2009

This article essentially examines the question of how an employer can go about dealing with an employee who has been charged with a criminal offence. In particular, it looks at the ways in which the employer may be able to terminate the contract of employment. It also looks at the alternatives to termination.

I. Employee commits a crime and pleads guilty or is convicted

A. Repudiatory breach by reason of criminal misconduct

1 In common law, where the conduct of the employee is such as to show that the employee is repudiating the contract or one of its essential terms1 or is so serious that it strikes at the root of the contract,2 the employer can summarily dismiss the employee. If the crime takes place in the course of employment and the crime is such as to show that the employee is repudiating the contract or one of its essential terms, or is so serious that it strikes at the root of the contract, the employee can be summarily dismissed. For instance, where the employee commits the offence of theft at the employer’s premises, it is likely that the employer has the power to summarily dismiss the employee.3

2 However, not all crimes committed in the course of work would justify summary dismissal. For instance, the crime may not be sufficiently serious looked at in context.4 Alternatively, the crime may be

committed at the insistence of the employer. In such a situation, it is likely to be deemed that the employer has waived the breach on the part of the employee.5 Thus, for instance, if the employer requests the employee in charge not to pay the skills development levy in breach of the Skills Development Fund Act,6 and, as a result, among others, the employee7 in question is convicted of an offence, the employer may not be able to subsequently summarily dismiss the employee on the ground of the criminal offence.

3 If the crime is not committed in the course of employment, then the question is whether there is a sufficient nexus between the crime and the job so as come to the same conclusion that the employee is repudiating the contract or one of its essential terms, or the criminal misconduct is so serious that it strikes at the root of the contract. In this regard, in the New Zealand case of Smith v The Christchurch Press Co Ltd,8 it was stated:

To justify dismissal, there had to have been a clear relationship between the conduct and the employment. It was the impact or the potential impact of the conduct on the employer’s business, including the question of bringing the employer into disrepute, the incompatibility of the conduct with the proper discharge of the employee’s duties, the impact upon the employer’s obligations to other employees or the undermining of the trust and confidence between the employer and employee.

4 On the facts, sexual misconduct on the part of an employee in relation to another, but outside the office, during the lunch hour, was held to have a sufficient nexus justifying summary dismissal, as it was an issue concerning two employees; it arose out of the work situation and had the potential to adversely affect the working environment.9 Similarly in Mathewson v RB Wilson Dental Laboratory Ltd10 where a dental

technician was arrested outside work for possessing drugs, his summary dismissal was upheld. The fact that the employee had to do skilled work and the fact that the young members of staff might be adversely influenced by the presence of someone who is taking illegal drugs, justified the summary dismissal. Likewise, in Moore v C & A Modes,11 where a section leader in a store was caught shoplifting in another nearby store, summary dismissal was justified as there was a sufficient nexus, given the nature of her duties as a store leader.

5 On the other hand, if there is no sufficient nexus, then summary dismissal would not be justified. In Bradshaw v Rugby Portland Cement Co Ltd,12 the employee in question had been convicted on an isolated act of incest with his daughter and was summarily dismissed. However, the court held that summary dismissal was not justified as “it had nothing to do with the applicant’s work, his work did not bring him into contact with female staff, he was working with a gang of men, it did not, apparently, upset his relationship with his workmates in any way, it did not expose anyone to a moral danger from his presence in the works”.13 Similarly, in Port of Singapore Authority v Wallace,14 it was held that negligent driving of a motor vehicle by a harbour pilot did not justify summary dismissal as:15

It was misconduct outside the course of the respondent’s employment as a harbour pilot. It was misconduct in no way connected with the business of the appellants who are the authority responsible for the safe navigation of vessels entering or leaving the port of Singapore. It is not misconduct incompatible with the due or faithful discharge of the respondent’s duty qua his employment as a harbour pilot. It was not the kind of misconduct which could reasonably be said to seriously prejudice or interfere with or affect the interests of the appellants to its detriment.

6 However, ultimately, too much cannot be read into these decisions and much depends on the actual facts of each case.

7 It must also be mentioned that in so far as it is in the course of employment, or not in the course of employment but sufficiently related, the fact that the employee has already been punished for his crime does not have a bearing on the issue. As stated in Gardiner v Newport County, Borough Council:16

The dismissal was characterized as double punishment … the tendency of such a rule would be to restrict the employer’s power of dismissal … In fact ‘double punishment’ is a mere distraction. The Courts are regularly reminded in the course of mitigation that whatever penalty is imposed, will only be a part of the punishment which will fall on the defendant in his social relations, his employment and ultimately in terms of money, and they are well aware that no sentence of theirs carries exemption from further social consequences. The argument would tend to make employers waive consequences which the Court anticipated and allowed for, in fixing its penalty.

8 In addition, it must be pointed out that it is not for the employer to find out the reasons behind why the employee had pleaded guilty. As stated in British Gas plc v McCarrick:17“The suggestion that a reasonable employer would have made inquiries of the respondent’s legal adviser regarding the circumstances in which he was unwilling to plead guilty … that was to impose far too high a burden on the employers … In my judgement it is perverse to suggest that where an employee is given full facilities himself to bring forward information which is under his control, the employer has failed to make proper inquiries in not pursuing such inquiries himself.” On the facts, the employee had been told that if he pleaded guilty he would only be fined as opposed to being sent to prison, and, hence, the employee pleaded guilty. Similarly, in P (Peet) v Nottinghamshire County Council,18 it was held that: “When an employee has pleaded guilty to an offence or has been found guilty by the decision of the court …, it is reasonable for an employer to believe that the offence has been committed by the employee. Any other conclusion would be ridiculous.”19

9 In so far as it is in the course of employment, or not in the course of employment but sufficiently related, and the employer seeks to summarily dismiss the employee, the question of what procedure the employer must follow may also arise. In this regard, in common law generally,20 there is no particular procedure that has to be followed when summarily dismissing the employee, unless the contract provides otherwise.21 Thus, for instance, it is not necessary to give the employee a right of hearing22 before he is dismissed.

10 Thus far, the position of employees not falling under the Employment Act23 has been considered. In relation to employees falling under the Employment Act, the position is largely similar. Section 14(1) of the Employment Act allows summary dismissal after a “due inquiry”, where there has been “misconduct” inconsistent with the fulfilment of the express or implied conditions of the contract of employment. Committing a crime can amount to “misconduct” inconsistent with fulfilment of the express or implied conditions of the contract of employment, though, as said earlier, this will not always be the case.24As for “due inquiry”, a case in which the issue arose was Lim Tow Peng v Singapore Bus Services Ltd.25 In this case, the appellants were summarily dismissed on the ground that they had assaulted a fellow employee. The court found that, in effect, no inquiry was ever held on the alleged misconduct. Further, the appellants were not told of their misconduct nor were they given a chance to be heard. In the circumstances, the court held that there was no “due inquiry” and, as a result, the dismissal was wrongful. However, it is clear that in some circumstances, there can be a “due inquiry” even if the employee is not given a chance to be heard by the employer. In Velayutham v Port Authority of Singapore,26 the employee was arrested and charged with a crime. However, he was later acquitted as the Prosecution could not produce a key witness who was out of town. Nonetheless, based on the information they received from the police, the defendants decided to dismiss the plaintiff. The plaintiff brought an action stating that there was a breach of s 14(1). However, the court rejected the claim. This was because full investigations had been carried out by the police during the course of which the employee was given a chance to be heard and the employee concerned was fully aware of the alleged misconduct. Further, since the police had passed them the relevant information, there was sufficient evidence based on which alone the defendants could reach a...