Public Prosecutor v Jurong Country Club and another appeal

• Jurisdiction: Singapore
• Judge: See Kee Oon J
• Judgment Date: 12 June 2019
• Neutral Citation: [2019] SGHC 150
• Court: High Court (Singapore)
• Hearing Date: 03 April 2019
• Docket Number: Magistrate’s Appeal No 10/2018/01 and 02
• Plaintiff Counsel: Lim Jian Yi and Wu Yu Jie (Attorney-General's Chambers)
• Defendant Counsel: Yim Wing Kuen Jimmy SC and Ang Si Yi (Drew & Napier LLC),Kevin Lee (Aequitas Law LLP) as Young Amicus Curiae.
• Subject Matter: Criminal Law,Statutory offences,Central Provident Fund Act
• Published date: 19 June 2019

See Kee Oon J:

These appeals arose from the District Judge’s decision in [2018] SGDC 314. Jurong Country Club (“JCC”) was convicted of four charges under s 7(1) read with s 58(b) of the Central Provident Fund Act (Cap 36, 2013 Rev Ed) (“CPFA”) at the close of its trial. JCC has appealed against its conviction and the Prosecution has appealed against the District Judge’s dismissal of its application for payment of arrears in contributions and interest under s 61B(1) CPFA.

I reserved judgment after the hearing on 3 April 2019. Having carefully considered the submissions of the parties as well as those of Mr Kevin Lee, the young amicus curiae (“YAC”), I conclude that the District Judge erred in finding that Mr Mohamed Yusoff Bin Hashim (“Yusoff”) was an employee of JCC at the material times. As such, I allow JCC’s appeal and acquit it of the four charges. I dismiss the Prosecution’s appeal accordingly.

I now set out the reasons for my decision.

Facts

The District Judge outlined the background facts of this case at [6] to [15] of her Grounds of Decision (“GD”). I shall refer to the facts in more detail as they become relevant in the course of my judgment. It suffices to highlight the following facts at this juncture.

JCC was formerly a proprietary club owned by Jurong Country Club Pte Ltd (“JCCL”), a wholly-owned subsidiary of JTC Corporation. On 1 December 2003, JCC took over the business of JCCL. JCC operated primarily as a golf club and golfing services were its main source of revenue. JCC also provided ancillary sports, lifestyle and social services. JCC ceased operations on 31 December 2016 after it was notified by the Singapore Land Authority that its land would be acquired for redevelopment.

Yusoff was employed by JCCL on 1 February 1991 as its gym instructor. He then worked under a series of contracts until the club ceased operations. These contracts were negotiated on an annual or biennial basis. Until 31 October 1998, JCCL treated Yusoff as an employee and contributed to his CPF. On 1 November 1998, JCCL purportedly converted his status to that of an independent contractor and Yusoff stopped receiving Central Provident Fund (“CPF”) contributions from this point on. This change resulted in the revocation of Yusoff’s employee benefits such as paid annual leave, medical coverage, annual wage supplement and so on. Yusoff was also permitted to conduct personal training sessions for non-members at the JCC gym outside working hours.

Yusoff was the only gym instructor engaged at the club at least until 2014. Between August 2014 to December 2014, DW5 Wan Xueming Kenric (“DW5”) was engaged as an assistant gym instructor. Yusoff testified that this was to cover the hours he was not at the gym, and DW5 agreed that their working hours seldom overlapped. Both parties accepted that DW5 had been an independent contractor. Yusoff testified that there was another gym instructor engaged by JCC for a few months, again to cover the hours he was not at the gym.

Investigations began in 2016 after Yusoff approached the CPF Board to enquire whether he was entitled to (employer’s) CPF contributions as he found out that JCC would be closing down. The CPF Board found that he was so entitled. This eventually led to JCC’s prosecution and trial before the District Judge on the four charges in question.

Decision below

The District Judge identified two main issues to be addressed. The first was whether Yusoff was in fact an employee of JCC from 2003 to 2016 within the meaning of the CPFA such that CPF contributions were payable. The second question was whether the s 58(b) CPFA offence was one of strict liability (GD at [19]).

The District Judge considered that the first question required her to determine whether Yusoff was engaged by JCC under a contract of service, having regard to s 2(1) CPFA which defines “employed” as being, inter alia, engaged under a contract of service in respect of which contributions are payable under the Central Provident Fund Regulations (Cap 36, R 15, 1998 Rev Ed) (GD at [21] and [23]). She then observed that a multi-faceted test must be applied. Under this test, the decisive factors in each case may differ, and would depend on the specific facts of the case. The District Judge described this fact-based “adaptable approach” as logical since employment arrangements are increasingly varied and complex (GD at [26]).

The District Judge applied the approach adopted by the High Court in Kureoka Enterprise Pte Ltd v Central Provident Fund Board [1992] SGHC 113 (“Kureoka”). While the Prosecution had argued that the main focus of any test determining the existence of an employment relationship should be the degree or extent of control exercised and the manner of remuneration, the District Judge noted that the Court of Appeal had stated that control may not be the only, or decisive, factor in BNM (administratrix of the estate of B, deceased) on her own behalf and on behalf of others v National University of Singapore and others and another appeal [2014] 4 SLR 931 (“BNM”) (GD at [24] and [27]). The District Judge took into account the following factors (GD at [29]): the degree or extent of control exercised by the Club over Yusoff; whether Yusoff was given any employment benefits; whether the contractual terms allowed the Club to terminate the relationship without notice; whether Yusoff was required to render the services personally; whether Yusoff was required to supply or use his own gym equipment; whether Yusoff took on any degree of financial risk or made any investment in the running of the gym for the opportunity to profit; and whether the gym services were an integral part of JCC’s business or if they were an accessory to its main business.

The District Judge assessed these factors in light of all the evidence adduced, including the various employment contracts between Yusoff and JCC. Particular attention was paid to the contracts dated 1 December 2003, 1 January 2007, 30 November 2010 and 1 December 2015 as they directly related to the four charges before the court (GD at [30]).

The District Judge found that JCC exercised considerable control over Yusoff (GD at [34]). The District Judge referred to Montgomery v Johnson Underwood Ltd [2001] IRLR 269 at [19] (“Montgomery”), where Buckley J held that it suffices for the employer to have no more than a “very general idea” of how the work is done, although some sufficient framework of control must exist. The evidence clearly showed that JCC maintained a sufficient framework of control over Yusoff and this clearly pointed to an employment relationship (GD at [45]). The District Judge further found that the lack of employment benefits was not a reliable indicator that Yusoff was an independent contractor: the evidence showed a lack of clarity as to what benefits JCC was prepared to give him. There was “ambiguity” in the “mixed-up” contract that had been executed in 2007 – eg, the provision of 14 days’ paid leave was at odds with his alleged status as an independent contractor. According to the District Judge, this ambiguity continued until 2016 (GD at [51]). While other differences existed in the manner JCC treated Yusoff compared to its other employees, such as the fact that Yusoff was not subject to the employee performance appraisal framework, these were the result of JCCL’s decision to reclassify him as an independent contractor, ostensibly as part of a headcount reduction exercise (GD at [52] and [53]).

Further, the terms of termination in Yusoff’s contracts did not change after 1998, and there was no evidence to show that these differed from those JCC’s employees were subject to. The right to terminate at will and to discipline, which had been exercised, were strongly indicative of an employer-employee relationship. The contractual terms between Yusoff and JCC did not allow or require Yusoff to engage a replacement instructor when Yusoff was not able to work or on leave, and JCC had paid the replacement trainer directly when one was engaged. The fact that Yusoff was not allowed to delegate or sub-contract to another person meant that his position was “no different from that of an employee” (GD at [54] to [56]).

The following factors were at odds with the proposition that Yusoff was running a business on his own account. First, JCC provided and maintained all the gym equipment. There was no evidence Yusoff had been consulted on the gym equipment that was made available, as would have been expected if he had been conducting business on his own account as an independent contractor after 1998. Second, the personal training programmes and the rates for these programmes had to be approved by JCC’s Sports and Recreation Committee (“SRC”). Third, Yusoff made no efforts to increase his opportunity to profit, such as by promoting the training programmes. Instead, he trained any member or guest who approached him because of their connection to JCC. Fourth, the overall management and operational costs of running the gym were dealt with by JCC. While the payment of commissions formed a significant proportion of Yusoff’s remuneration package, this was “at best” a neutral factor as there were other staff members who had similar arrangements. The contracts and the conduct of the parties therefore did not support the propositions that Yusoff had been running a business on his own account as an independent contractor or that he had invested in the running of the gym (GD at [57] to [65]).

JCC had contended that Yusoff’s contract was specifically amended in 1998 to allow him to train outsiders in the gym such that he had the opportunity to profit as an independent contractor. The District Judge did not place weight on this submission given that the evidence adduced to show that Yusoff had trained non-members was “rather nebulous”. There was also no evidence that suggested Yusoff had publicised his...