Singapore MRT Ltd v Moh Puay Kheng and Others

• Jurisdiction: Singapore
• Judge: Lim Teong Qwee JC
• Judgment Date: 13 October 1993
• Neutral Citation: [1993] SGHC 246
• Docket Number: District Court Appeal No 64 of
• Date: 13 October 1993
• Year: 1993
• Published date: 19 September 2003
• Plaintiff Counsel: Lee Han Yang and Marian Ng (Lee & Pnrs)
• Citation: [1993] SGHC 246
• Defendant Counsel: Leonard Hazra (Tan Rajah & Cheah)
• Court: High Court (Singapore)
• Subject Matter: Administrative Law,Whether s 116(1) allows Commissioner of Labour to make order against a party to a contract with the employer if that party does not admit the debt,s 65(1) Employment Act (Cap 91),Appellant contracted out work to employer,Appellant contracted out work to a company,Employment Law,Whether appellant liable as principal for wages of company's employees,Whether appellant should have given priority to salaries of employer's workmen before deductions and claims can be made against employer under the contract,Whether written statements by appellant admitted debt,Words and Phrases,Whether rule on right to be heard breached,Commisioner for Labour inquiry,Assistant commissioner made order under s 116(1) of Employment Act against appellant without hearing appellant,Meaning of 'work undertaken by the principal','Work undertaken by the principal',Pay,ss 33(2), 65(1), 116(1) & (2) Employment Act (Cap 91),ss 33(2), 65(1), 116(1) &(2) Employment Act (Cap 91),s 116(1) Employment Act (Cap 91),Natural justice,Whether it is sufficient that the work is in furtherance of the interests of the appellant's trade or business,Whether the work undertaken by the employer under contract is to be the whole or part of work undertaken by the principal,Audi alteram partem,Contract between appellant and employer,Whether assistant commissioner had power to make order against appellant without summoning appellant under s 116(1),Recovery,Prohibition order under s 116(1) of Employment Act,Whether appellant jointly or severally liable with employer for salaries of employees,Liability as principal under s 65(1) of Employment Act

Pursuant to s 115 of the Employment Act (Cap 91) (`Act`) an Assistant Commissioner for Labour inquired into the dispute between Moh Puay Kheng and 157 others as employees and York Cleaning Pte Ltd (`York`) as employer and on 14 June 1990 she ordered York to pay the total sum of $70,409.36 to the employees. The order is at RA-53/62. I will refer to this case as ID 900480 & Ors . The assistant commissioner also inquired into the dispute between Fong Yoo and six others as employees and York as employer and on 25 June 1990 she ordered York to pay the total sum of $3,244.52 to the employees. The order is at RA-74/75. I will refer to this case as ID 900766 & Ors . On 9 October 1990 she ordered under s 116 of the Act that Singapore MRT Ltd (`SMRT`) pay as principal under s 65 of the Act the sum of $43,666.04 to the Commissioner for Labour in satisfaction of the claims of the employees. The order is at RA-46. SMRT was served with the order and appealed against it. I heard the appeal on 2 September 1993 and allowed it and I set aside the order. The employees now appeal against my judgment.

Disputes between employees and York

Section 115(1) of the Act provides:

Subject to this section, the Commissioner may inquire into and decide any dispute between an employee and his employer or any person liable under the provisions of this Act to pay any salary due to the employee where the dispute arises out of any term in the contract of service between the employee and his employer or out of any of the provisions of this Act, and in pursuance of that decision may make an order in the prescribed form for the payment by either party of such sum of money as he considers just without limitation of the amount thereof.

The disputes that the assistant commissioner inquired into were between the employees and their employer York. No other person who under the Act might have been liable to pay the salaries due to the employees was joined as a party to the disputes and was not heard or given any opportunity of being heard. Both the orders dated 14 June 1990 and 25 June 1990 recited that the assistant commissioner had inquired into the disputes between the employees and York as employer and in both orders it was York and York alone that was ordered to pay.

Order requiring SMRT to pay to the Commissioner

SMRT is a public company incorporated under the Companies Act and operates the mass rapid transit system of Singapore under an agreement dated 27 August 1987 with Mass Rapid Transit Corporation (`MRTC`) a statutory corporation which owns the rolling stock and the land including stations, substations and depots associated with the system. The agreement provides for a lease of the rolling stock and an agreement for a lease of the land. On 2 October 1989 SMRT awarded to York Contract No W89079 and Contract No W89078 (which are the two contracts referred to in the assistant commissioner`s order of 9 October 1990) for York to provide daily and periodic cleaning of all the interior and exterior surfaces of the premises at the stations, substations and depot specified in the scope of work in each case. The contract documents are marked `A-21/77` and exhibited to the affidavit of Lim Heng Toh.

On 14 June 1990, the assistant commissioner sent a copy of the order of 14 June 1990 in ID 900480 & Ors to SMRT. She referred to s 116 of the Act and asked for a statement of account for money owing by SMRT to York. On 21 June 1990 SMRT delivered statements in respect of the two cleaning contracts with York as well as another which is not relevant to these proceedings. The statement in Contract No W89079 is at RA-27 and that for Contract No W89078 is at RA-28. For some unknown reason, the statements refer to the cleaning contracts as contracts for upkeeping and maintenance of stations (which is the description used also by the assistant commissioner in the order of 9 October 1990) although the scope of work defined in the contract documents covers only cleaning.

According to the statements no money was owing by SMRT to York but instead York was owing SMRT $329,895.60 in Contract No W89079 and $147,579.08 in Contract No W89078. Not surprisingly nothing more was heard from the assistant commissioner but more than three months later and without any prior notice to SMRT she made the order dated 9 October 1990 ordering SMRT to pay to the Commissioner for Labour $43,666.04 in satisfaction of the claims of the employees. This is the order appealed against.

Section 116(1) of the Act provides:

Whenever the Commissioner has made an order under section 115 against any employer ... for the payment of any sum of money to any workman ... and after inquiry finds that there exists between that employer ... and some other person a contract in the course of the execution of which the workman ... performed the work in respect of which the order has been made, the Commissioner may summon that other person and may make an order ... requiring him to pay to the Commissioner any money (not exceeding the amount found due to the workman ...) admitted by him to be owing to the employer ... in respect of the contract:

Provided that where that other person admits to the Commissioner in writing that money is owing by him under the contract to the employer ..., he need not be summoned before the Commissioner and the Commissioner may make such order in his absence. [Emphasis added.]

The assistant commissioner has made an order under s 115 against York as employer for payment of money to the employees who are by definition `workmen` for the purpose of s 116(1). There exist between York and SMRT two cleaning contracts and I assume for the purpose of this appeal but without deciding the point that in the course of the execution of one or the other of the contracts the employees performed the work in respect of which the order dated 14 June 1990 in ID 900480 & Ors and the order dated 25 June 1990 in ID 900766 & Ors have been made. In fact, the contracts were terminated about one month earlier but I think they nevertheless `exist` within the meaning of s 116 of the Act so long as some money is owing in respect of or under them. During the inquiries into the disputes cleaning contracts with SMRT were disclosed and it appeared to the assistant commissioner that there could be money owing to York. In these circumstances the assistant commissioner may summon SMRT and make an order requiring it to pay to the Commissioner any money (not exceeding the amount ordered to be paid by York under s 115) but only if such money is admitted by SMRT to be owing to York by SMRT in respect of the contracts. It seems to me that where there is a dispute as to whether any money is owing or as to the amount the assistant commissioner has no power under s 116 to hear or determine the dispute. Her power is limited to making an order in respect of money admitted by SMRT to be owing to York. To exercise this power she has to summon SMRT. This is made abundantly clear by the proviso. It is only when SMRT has admitted to the Commissioner in writing that money is owing by it to York under the contracts that the assistant commissioner may exercise this power without summoning SMRT. In para 10 of the grounds of decision the assistant commissioner says she does not see the necessity for doing so. In para 7 she says SMRT should give priority to salaries before proceeding to make any deductions or claims against York and more so because under s 65 SMRT is jointly liable with York for the salaries. In para 10 she says if such deductions are disregarded there would be money owing by SMRT to York.

Whether SMRT has admitted in writing that money is owing by it to York under Contract No W89079 and Contract No W89078

The statement in Contract No W89079 shows that the value of work done was $292,340.58 and payments to account come to $175,874.52. That leaves $116,466.06. One item of deduction is:

Deduction for absenteeism

(Cl 11.7 of works spec) $139,337.26

The statement shows other items of deduction as well and the final position of $329,895.60 owing by York to SMRT.

For the purpose of the proviso to s 116(1) a deduction that appears on the face of the statement to have been made under the terms of the contract cannot be disregarded. If the deduction can be, and is, disregarded so that money is owing by SMRT to York the proviso applies and the consequence is that the Commissioner can make an order for payment by SMRT without summoning it and in its absence. On the other hand if SMRT is summoned and attends before the Commissioner and claims such deduction in consequence of which it does not admit that money is owing to York the Commissioner cannot make any order for payment. His power is limited to making an order in respect of money admitted to be owing, not money found to be owing. He has no power to hear or to determine the claim to make any finding. He cannot disregard the deduction claimed. It would be strange if he can so that the proviso applies as a result of which he can make an order for payment without summoning SMRT which order he would have no power to make if he had summoned SMRT and SMRT had claimed the very same deduction. In my judgment the deduction of $139,337.26 cannot be disregarded for the purpose of the proviso to s 116(1).

The statement in Contract No W89078 shows that the value of work done was $294,499.19 and payments to account come to $184,469.68. That leaves $110,029.51. There is a deduction of $92,375 claimed which is:

Deduction for absenteeism, etc

(Cl 11.7 of works spec) $92,375.00

That leaves $17,654.51. There is an amount recoverable from York described in the statement as:

Amount recoverable from York under cl 38 of conditions of contract

Outstanding contract sum of York $171,826.54

(26 May 90 to 24 Sep 90)

Contract sum for Chye Thiam $329,324.00

(26 May 90 to 24 Sep 90)

...