Liu Huaixi v Haniffa Pte Ltd

• Jurisdiction: Singapore
• Judge: Lee Seiu Kin J
• Judgment Date: 01 November 2017
• Neutral Citation: [2017] SGHC 270
• Court: High Court (Singapore)
• Docket Number: Tribunal Appeal No 15 of 2016
• Year: 2017
• Published date: 09 November 2017
• Hearing Date: 16 February 2017
• Plaintiff Counsel: Eio Huiting Sharleen (TSMP Law Corporation)
• Defendant Counsel: Namazie Mirza Mohamed and Ong Ai Weern (Mallal & Namazie)
• Subject Matter: Employment law,Pay,Failure to pay,Effect of In-Principle Approval
• Citation: [2017] SGHC 270

Lee Seiu Kin J: Introduction

The applicant lodged a claim to the Commissioner for Labour against the respondent for a shortfall in the payment of his salary pursuant to s 119 of the Employment Act (Cap 91, 2009 Rev Ed) (“the Act”). On 22 July 2016, the Assistant Commissioner for Labour (“the Commissioner”) dismissed the bulk of the applicant’s claim. The Commissioner found the respondent only liable to pay the applicant the sum of $457.70 due to a mistake in the computation of his overtime. The applicant appealed to this court pursuant to s 117 of the Act. On 16 February 2017, after hearing counsel for the parties, I allowed the applicant’s appeal in part and ordered the respondent to pay $6,500 to the applicant. I also ordered the respondent to pay costs of the appeal fixed at $8,000 inclusive of disbursements. I now give my reasons.

Background

The respondent is a company in the business of selling textiles, jewellery, electronics, toiletries, and food products. The applicant, who is from China, worked for the respondent on a work permit from 7 April 2014 to 23 March 2016.

During this period, the respondent employed the applicant in two different positions: as a warehouse assistant from 7 April 2014 to 12 July 2015, and as a supermarket storekeeper from 13 July 2015 to 23 March 2016. The applicant’s employment ended on 23 March 2016. The parties did not agree whether the respondent or the applicant initiated the termination but that was not material to my decision.

This claim arose out of three sets of claims by the applicant against the respondent: Short payment of the applicant’s salary from 28 March 2015 to 29 February 2016. Non-payment of the applicant’s salary from 1 March 2016 to 23 March 2016. Compensation in lieu of notice for the respondent’s termination of the applicant’s contract.

Although the applicant was employed by the respondent from 7 April 2014 to 23 March 2016, the one-year statutory bar under s 115(2) of the Act meant that the Commissioner only had jurisdiction to consider claims arising up to one year before the date of complaint. Since the applicant only lodged his complaint with the Ministry of Manpower (“MOM”) on 28 March 2016, the Commissioner could only consider the claim from 28 March 2015 to 23 March 2016.

The Commissioner dismissed the bulk of the applicant’s claims. On claim (a), he was not convinced that the applicant’s basic salary was $1,100 per month, as the applicant claimed. Instead, the Commissioner found that the applicant’s basic monthly salary was $680. However, the Commissioner noted that the respondent had wrongly computed the pay due to the applicant for overtime work and for his work on rest days. Hence, he ordered the respondent to pay the applicant $457.70, which the respondent has since paid. On claim (b), the Commissioner found as a matter of fact that the applicant had received his salary for the period 1 March 2016 to 23 March 2016, and accordingly also dismissed that claim. Claim (c) for compensation in lieu of notice of termination was not pursued by the applicant before the Commissioner.

Issues

It was not disputed by the parties that an appeal to the High Court from the decision of the Commissioner is to be heard by way of rehearing and this court is not constrained to reviewing the decision below for jurisdictional or manifest error or unreasonableness: see O 55 r 2(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed); Valentino Globe BV v Pacific Rim Industries Inc [2009] 4 SLR(R) 577 at [10]–[11]. In particular, the court is not bound by any finding of the Commissioner. Accordingly, there were three issues before me: Whether the respondent paid the applicant the full salary that he was entitled to between 28 March 2015 and 29 February 2016. Whether the respondent paid the applicant his salary between 1 March 2016 and 23 March 2016. Whether the respondent was liable to the applicant for compensation in lieu of notice of termination.

I will address each of these issues in turn.

Issue (a): Short payment of salary Applicant’s submissions Basic monthly salary

Counsel for the applicant, Ms Sharleen Eio (“Ms Eio”), submitted that the applicant’s basic monthly salary was $1,100 and not $680. This sum of $1,100 did not include additional amounts for housing allowance, for working overtime, and for working on the applicant’s rest days and on public holidays.

This was based on two documents. First, Ms Eio relied on the In-Principle Approval (“IPA”) submitted by the respondent or its agent to the MOM. The IPA stated that the applicant’s “basic monthly salary” would be $1,100. This sum expressly excluded a further $200 of housing allowance per month. Ms Eio submitted that the IPA should be the starting point in determining the applicant’s basic monthly salary. This was because of the status of the IPA in the Employment of Foreign Manpower (Work Passes) Regulations 2012 (Cap 91A, S 569/2012) (“Employment Regulations”). Regulation 4(3) of the Employment Regulations provides that the applicant’s work permit (which is the final version of the IPA) is subject to the conditions laid down in Parts III and IV of the Fourth Schedule.

Under the Fourth Schedule, para 4 of Part III provides that the amount declared in the work pass application (ie, the IPA) shall be paid to the employee, unless it is revised in accordance with para 6A of Part IV. Paragraph 6A of Part IV in turn allows the employer to reduce the employee’s salary to a sum below what is declared in the work pass application if two cumulative conditions are satisfied: the employee must give prior written agreement, and the employer must inform the Controller of Work Passes in writing. Ms Eio submitted that since neither condition had been fulfilled in this case, the basic monthly salary of $1,100 described in the IPA remained as the amount agreed between the parties.

In Ms Eio’s submission, this amount reflected on the IPA which had to be paid could not be construed as including overtime pay or other forms of allowances because of para 6B of Part IV of the Fourth Schedule, which defines the term “basic monthly salary”. The definition excludes, among other things, “any form of overtime payment, bonus, commission or annual wage supplements”.

The second document that Ms Eio relied on was the letter appointing the applicant as an employee, which also reflected that the applicant’s “monthly salary” was $1,100. Ms Eio submitted that this document was signed by the respondent’s agent and therefore binding on the respondent.

In response to the Commissioner’s finding that the applicant had acquiesced to a lower basic monthly salary of $680, Ms Eio submitted that this clearly contradicted para 6A of Part IV of the Fourth Schedule read with para 4 of Part III of the Fourth Schedule, which prescribed two procedural requirements for the employer to lower the employee’s basic monthly salary (see above at [10]). Allowing the parties to orally acquiesce to lowering this salary, as the Commissioner did, would circumvent this statutory framework entirely. So the applicant’s signature on the two cash vouchers of 7 May 2014 and 9 June 2014 could not have indicated his consent to be paid a lower amount for those same months (since they were not given prior to the reduction), and even if they did, they would still have failed the second procedural requirement of informing the Controller in writing.

Number of hours worked

Ms Eio tendered a table of hours worked in total in the months of March 2015 to March 2016. She based this on the applicant’s handwritten records. The Commissioner had rejected this in favour of the respondent’s thumbprint logs, which reflected a lower number of hours worked in all the relevant months. Ms Eio submitted that the thumbprint logs were inaccurate as the applicant had not been allowed to sign in to the system on some days, despite having actually worked for many hours. She also submitted a different set of rest days upon which the applicant actually worked.

Respondent’s submissions Basic monthly salary

In contrast, counsel for the respondent, Mr Namazie Mirza Mohamed (“Mr Namazie”), submitted that the Commissioner was correct in finding that the applicant’s basic monthly salary was $680. According to Mr Namazie, the contract between the parties was oral and not written. This oral contract was concluded between the applicant and the respondent during an online interview prior to the applicant’s employment. During this teleconference, the applicant was interviewed by one Jose Varghese (“Mr Varghese”), a manager of the respondent, and one Lim Kuan Heng Charles (“Mr Lim”), an employment agent working for BT Employment Agency (“BT”). BT was the respondent’s employment agent. It was during this interview that the applicant had been informed by Mr Varghese and Mr Lim that he would be paid $1,300 per month. However, this sum would comprise of $680 in basic monthly salary, $200 in housing allowance, and the balance was to be for overtime pay.

Mr Namazie submitted that this oral contract was not affected by either the IPA or the letter of appointment. The letter of appointment had never been seen by the respondent or its agent prior to this dispute, and was not signed by the applicant or the respondent. While the letter bore the signature of one “Employment Hub Pte Ltd”, Mr Namazie submitted that this entity was unrelated to either the respondent or its agent. The respondent’s employment agent was BT, and not “Employment Hub Pte Ltd”.

As for the IPA, Mr Namazie acknowledged that the IPA stated a sum of $1,100, but he submitted that there had been a mistake in entering the applicant’s basic monthly salary into the IPA. This was supported by two documents. First, Mr Lim filed an affidavit stating that there was a mistake in the IPA. And second, Mr Namazie tendered a payslip which was given to another Chinese worker employed by...