Case Update: Ricardo Leiman v Noble Resources [2018] SGHC 166 – Contractual Discretion and Legal Doctrine of Penalties

Significance: Singapore High Court held that contractual discretion in employment contract is subject to an implied term that the discretion is exercised rationally, not arbitrarily or capriciously, in good faith, and consistent with its contractual purpose. Further, the Court applied the new UK Supreme Court test for penalty clauses in Cavendish Square Holding BV v Makdessi [2016] AC 1172 (UKSC) (“Cavendish“), observing that the clause in question is not a straightforward damages clause, hence the usefulness in applying the Cavendish test.

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Case Update: Tan Kok Yong Steve v Itochu Singapore Pte Ltd [2018] SGHC 85 – High Court upholds 2-year non-compete clause, grants injunction

Significance: the Singapore High Court (Coram: Tan Siong Thye J) upheld a two-year restraint of trade, non-competition, clause and ordered an injunction against an ex-employee. The Court also held there was a valid agreement for a severance package which was not predicated on the employee’s compliance with the non-competition undertaking.

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Case Update: Hasan Shofiqul v China Civil (Singapore) Pte Ltd [2018] SGHC 128 – Meaning of executive in Employment Act – construction supervisor?

Significance: this is the first case where the Singapore High Court elaborated on the meaning of “executive” in the Employment Act for determining whether an employee was entitled to Part IV provisions of the Employment Act, including being paid for overtime work and for working on rest days and public holidays. The Court held that the claimant, who was a construction site supervisor in charge of a team of other construction workers was not an executive.

Key points:

  • Just because an employee is designated or has the job title of a “supervisor” does not mean he is an executive for the purposes of the Employment Act.
  • Generally, the essence of the inquiry is whether the employee is of a class of employees able to safeguard their own interests independently of legislation: [60].
  • Factors which the Court would consider include ([64]-[71]):
    • type of supervisory or management powers given to the employee – whether the employee had actual decision making and control powers
    • qualifications of the employee
    • salary amount.
    • complexity of the work
    • whether the work required specialised training.

Employment Act mandatory requirements grace period ends 31 March

The Employment Act was amended in 2015 to make it mandatory that employees under the Act are provided with itemised payslips and key employment terms (KETs) in writing, and employers are to keep records of employees.  A breach of these mandatory requirements is considered a civil breach which will attract administrative financial penalties / fines.

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Case Update: A M Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11

A M Mohamud (in substitution for Mr A Mohamud (deceased)) v WM Morrison Supermarkets plc [2016] UKSC 11

Significance: the UK Supreme Court held that an employer was vicariously liable for its employee’s act of causing injury to a customer under the close connection test.

Comment: this decision is significant because under previous applications of the doctrine of vicarious liability, an employer will not be held liable for an employee’s acts which were on his whim and frolic, outside the course of employment, or were unauthorised acts. In this case, the Court extended the analysis of unauthorised modes of authorised acts by the employer to an irrational physical attack as falling within the authorised act of an employee’s interactions with a customer.

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“Do more to protect higher-skilled workers: NTUC”

Do more to protect higher-skilled workers: NTUC, Straits Times (25 February 2016)

HR and employment matters can turn very ugly when employees are terminated, retrenched or dismissed. Anger and bitterness resulting in potential long-drawn disputes and litigation can actually be avoided if employers and HR professionals apply the fundamental Golden Rule to employees who are being asked to leave.

Unions offer a form of protection and support. Legal counsel is an even more important way because then one would know what the legal rights are and how to negotiate for a fair and peaceable outcome for all.