Public Prosecutor v Jurong Country Club

JurisdictionSingapore
JudgeJasbendar Kaur
Judgment Date14 December 2018
Neutral Citation[2018] SGDC 314
CourtDistrict Court (Singapore)
Docket NumberCS—15496/2017
Year2018
Published date08 August 2019
Hearing Date08 March 2018,29 June 2018,19 March 2018,11 May 2018,07 March 2018
Plaintiff CounselMr N Sreenivasan S.C & Ms Jerrie Tan Qiu Lin (M/s Straits Law Practice LLC) on behalf of The Central Provident Fund Board (Prosecution)
Defendant CounselMr Andrew Goh & Mr Keith Valentine Lee (M/s Fortis Law Corporation)
Citation[2018] SGDC 314
District Judge Jasbendar Kaur:

The Accused in this case is Jurong Country Club (Singapore UEN No. T03SS0226B0 (hereinafter referred to as “JCC” or “the Club”). JCC was charged under the Central Provident Fund Act, Chapter 36 (“CPFA”) with 4 charges under section 7(1) read with section 58(b) of the said Act for failing to pay contributions to the Central Provident Fund (“CPF”) in respect of one employee, one Mohamed Yusoff Bin Hashim. JCC claimed trial to the four charges.

Section 7(1) provides that every employer of an employee shall make a monthly contribution to the CPF in respect of each employee according to the rates set out in the First Schedule to the CPFA and section 58(b) makes it an offence if any person “fails to pay to the Fund within such period as may be prescribed any amount which is he is liable under this Act to pay in respect of or on behalf of any employee in any month”. As Regulation 2(1) of the CPF Regulations (Chapter 36, Reg 15) provides that “all contributions to the Fund payable by an employer …shall be paid to the Board not later than 14 days after the end of the month in respect of which the contributions are payable”, the four charges preferred against JCC made reference to the following offending periods – on or about 15 January 2004 for failing to pay contributions to the CPF for the month of December 2003; on or about 15 February 2007 for failing to pay contributions to the CPF for the month of January 2007; on or about 15 February 2011 for failing to pay contributions to the CPF for the month of January 2011; and on or about 15 January 2017 for failing to pay contributions to the CPF for the month of December 2016.

The trial was heard over five days and at the end of the trial, I convicted JCC on all four charges. After hearing the sentencing submissions by both parties, I ordered JCC to pay a fine of $800 on each charge for the first three charges and $1200 for the fourth charge (Total fine: $3600).

At the end of the case, the Prosecution made an application under section 61B(1) of the CPFA to recover the arrears in CPF contributions. The Defence objected to this application on several grounds. After hearing submissions from both parties, I decided not to exercise my discretion to grant the order.

These grounds are issued as the Defence has filed an appeal against the conviction on all four charges and the Prosecution has lodged an appeal against the Court’s decision not to grant an order under section 61B(1) of the CPFA. These grounds will deal with both appeals.

Background Facts

Many of the background facts in this case were not in dispute. In this regard, an Agreed Statement of Facts [Exhibit PS 1] and an Agreed Bundle of Documents [Exhibit P2] were tendered.

JCC was formerly a proprietary club owned by Jurong Country Club (Pte) Ltd (“JCCL”). On 21 November 2003, JCCL registered itself as a society with the Registry of Societies and on 1 December 2003, JCC took over the club and managed it until December 2016. JCC was primarily a golf club and golfing services were the club’s main source of revenue. It also provided related sports, life-style and social services that complemented its core business. The gym and its related services were one of the sports activities that were made available in the club. All these ancillary activities were managed by the Lifestyle Department of the Club and there was evidence to suggest that these services were subsidised by the revenue generated by the golfing services1.

In May 2015, Singapore Land Authority issued a notification to JCC to inform that the Club’s land was going to be acquired to make way for redevelopment and for the proposed Singapore-Kuala Lumpur high speed rail terminus. With the impending closure, the Club worked with a consultant and the union to come up with a retrenchment benefits package for its 111 employees. The Club also had independent contractors working for the club who did not receive any retrenchment compensation as they were not counted as employees of the club. The Club ceased its operations on 31 December 2016.

Mohamed Yusoff Bin Hashim (PW 1) started working at the club around 1989 when he was employed by Hilton Fitness Centre. During that period, JCCL had contracted with Hilton Fitness Centre to supply gym instructors and PW 1 was one of the instructors who had been assigned to work there. On 1 February 1991, JCCL decided to employ PW 1 and he worked at the club’s premises continuously under a series of contracts until 31 December 2016. From 1991 to 2014, he was the only gym instructor engaged at the club and thereafter, another two instructors were engaged to service the members during the hours when he was not working at the gym.

PW 1’s contract was reviewed on a yearly basis. From 1991 to 1996, he was asked to sign an “Employment Contract”, from 1997 to 2001, he was asked to sign a “Contract of Service” and from 2002 to 2016, he was asked to sign a “Contract for Service”. His main duties and responsibilities remained mostly unchanged during the period that he worked at the club. He worked fixed hours every week2 and his one off-day per week was on Monday. It was not in dispute that the Club had tracked when he reported for work and when he left through the use of a “punch card system”.

PW 1’s remuneration consisted of the fixed base salary component (also referred to as “retainer fees’ by the Defence) and a variable component that consisted of the commission that he earned from the training programmes. From 1991 to October 1998, he was given employment benefits such as one-month Annual Wage Supplement, annual leave, medical coverage and hospitalization leave.

It was not in dispute that PW 1 received CPF contributions from JCCL from 1 February 1991 to 31 October 1998 in accordance with the CPF Regulations and that JCCL ceased paying these contributions with effect from 1 November 1998 when his status was changed to that of an independent contractor. His other employment benefits mentioned above were also revoked by JCCL. When JCC took over the club in 2003, they continued to engage PW 1 as an independent contractor and CPF contributions were not paid to him until he ceased working for the club in December 2016. The four charges took place during the period when JCC was managing the club.

The investigations by the Central Provident Fund Board (“CPFB”) started when PW 1 made inquiries on whether he was entitled to CPF contributions after he found out that the club was closing down. At about the same time, PW 1 had also approached the Club for an ex gratia compensation payment to be included in his separation terms. On 28 October 2016, he was informed that the Club was prepared to pay him $20,000 ex gratia payment as an exercise of “compassion” [See P11 and P12]3. He did not receive this payment as the offer was withdrawn when JCC learned that the CPFB has started investigations against the Club.

In response to the CPFB’s investigations that found that contributions were payable to PW 1 for the period December 2003 to December 2016, JCC filed an Originating Summons in the High Court (“OS 732”) against the CPFB and PW 1 on 27 June 2017 for the Court to make a determination on the following matters: whether PW 1 was an employee of JCC or an independent contractor for the period December 2003 to December 2016; and whether employer’s contributions to the CPF were due and/or payable by JCC to PW 1 and/or the CPFB.

On 22 December 2017, the CPFB filed charges against the Club for failing to pay contributions to the CPF as required under section 7(1) of the CPFA within the period prescribed by Regulation 2(1) of the Central Provident Fund Regulations (Cap 36, RG 15, 1998 Rev Ed). The CPFB also applied to strike off OS 732 on the basis that there were pending criminal proceedings against JCC. JCC did not object to this application and OS 732 was dismissed with costs paid to the CPFB.

Prosecution’s Case

The Prosecution argued that their investigations revealed that PW 1 was an employee of the Club within the meaning of the CPFA during the period 2003 to 2016 and therefore, CPF contributions were payable to him which were not paid. In light of the defence put forward by the Club, they further argued that the Prosecution did not have to bear the legal burden of proving any mental element on the part of JCC in respect of every physical element of the wrongdoing alleged as an offence under section 58(b) of the CPFA is a strict liability offence.

Defence’s Case

The Defence argued that JCCL had started engaging PW 1 as an independent contractor from 1 November 1998 and this arrangement had continued after JCC took over the club in 2003. It was their case that PW 1 was correctly classified as an independent contractor based on the terms on which PW 1 was engaged. JCC further argued that his status was no different from that of the other independent contractors that the Club had engaged to provide services to their members (for e.g., the tennis coach, the swimming coach and squash instructor).

It was also part of their case that the Club would not be guilty of an offence under section 58(b) of the CPFA in relation to PW 1 even if PW 1 had been misclassified as an independent contractor as the Prosecution would not be able to prove that JCC had committed the offence with the requisite mens rea. Their position was that the offence was not a strict liability offence and as the Club had “truly and honestly” believed that PW 1 was an independent contractor who was not entitled to CPF contributions, it could not be said that the Club had intended to avoid its legal obligations under the CPFA4. This, they argued was evidenced by the fact that they had always complied with the requirements of the law in relation to their employees. In other words, it was part of their defence that if PW 1’s employment status had been incorrectly classified, it was...

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