An Employers Duty of Care

It is often acknowledged that employers have a significant duty of care to their employees, as managers of their employees’ livelihoods. This standard of care arises from their positions of authority, with associated expectations and responsibilities.

A recent case that came before an apex court has reinforced this message. Let’s delve into the clarification of the standard of an employer’s duty of care.

The Case in Question

On 27 July 2016, the Court of Appeal ruled that AXA Life Insurance Singapore had negligently breached its employer duty of care to one of its best-compensated advisers, Mr Ramesh Krishnan. The High Court was tasked with determining the damages owed.

Mr Ramesh, a former financial service director at AXA, had sought employment with Prudential in 2011. His application was, however, rejected when AXA reported his poor rate for retaining clients, and it expressed concerns about the quality of advice given to the clients.

The reference provided by AXA contradicted descriptions of Mr Ramesh as a top representative of the company—a clear reflection of the miscommunication in the duty of care between employer and employee. It was also noted that AXA had previously persuaded him not to resign, indicating his value to the company.

Upon being unfairly denied a job opportunity, Mr Ramesh found employment at a vegetarian café and initiated proceedings against AXA in 2015, citing defamation out of the negligence of their employer duty of care.

How Were Damages Calculated?

When calculating the damages to be paid in such a case, the court will seek to reimburse the victim with what he or she should have had if the unfair action had not taken place.

In this case, the High Court began by considering the employment package conditionally offered by Prudential. It then took into account amounts such as the commencement allowance and monthly salary for both the first twelve (12) months from April 2011 and subsequent months until July 2016. An estimate of the possible loss of earnings between August 2016 and July 2018 was also considered at a discounted rate.

To balance this, the High Court deducted from the above sum the salary Mr Ramesh had earned from his job at the vegetarian café.

Significance of The Case

This case illustrates and clarifies the standard of an employer’s duty of care when providing a reference. Specifically, employers should exercise reasonable care to meet requirements of truth, accuracy, and fairness.

Failure to do so may result in the employer being considered negligent in the context of the employer’s duty of care to its employees. This clarification holds particular significance in industries such as financial advisory and insurance, where references by former employers are a key factor in the hiring process.

What Is an Employer’s Duty of Care?

Legally, a duty of care is considered a presumed responsibility towards another individual. For example, road users owe others a duty to act in a manner that doesn’t endanger their safety.

In the context of employer negligence duty of care, Singapore’s Ministry of Manpower seeks to cultivate a fair and respectful working environment. The standard of care expected from an employer should be in alignment with this goal.

Relevant legislation such as the Employment Act (Cap 91, 2009 Rev Ed) and the Central Provident Fund Act (Cap 36, 2013 Rev Ed) outline the responsibilities and powers of an employer, setting limits to prevent the abuse of power. The Defamation Act (Cap 75), for instance, prohibits actions that may create unjust consequences in an employee’s professional life.

In the case highlighted, part of the employer’s duty of care involves furnishing honest and fair references about an employee.

What is Negligence?

In civil law, negligence denotes the breach of a duty owed to an individual, which may render the person at fault liable for appropriate penalties.

Contrary to deliberate failure to fulfill a responsibility owed to another person, negligence refers to the absence of expected care in one’s actions, leading to a breach of duty.

In this case, negligence arises from AXA’s failure to apply reasonable care in ensuring the accuracy and honest reflection of Mr. Ramesh’s work in the reference provided—a key aspect in fulfilling the employer’s duty of care.

What Are the General Employment Guidelines in Singapore?

For both employers and employees, it is important that you are aware of the guidelines that should be adhered to in an employer-employee relationship. Breaching a duty owed to an employee in the eyes of the law can lead to serious penalties.

Typically, the primary responsibilities of an employer are outlined in the Employment Act (Cap 91, 2009 Rev Ed) and Central Provident Fund (CPF) Act (Cap 36, 2013 Rev Ed). These Acts set out what is expected of employers, such as a duty to grant fair working hours and contribute to their employees’ CPF accounts.

Industry-specific regulations and duties may exist as well. You should consult a professional to be clear on your rights and the expectations put on you.

For more information and resources on employment rights, you may wish to click on the Ministry of Manpower’s WorkRight initiative page (http://www.mom.gov.sg/employment-practices/employment-act/workright).

Has My Employer or Former Employer Been Negligent?

If you suspect your employer has been negligent towards you, you should first identify the scope of the duty owed to you.

Indicators of this may be found in generally applicable guidelines for work practices provided by the Ministry of Manpower and, where applicable, an industry-specific regulatory authority. You should also read through your employment contract.

Following this, you should take note of what has happened that has given rise to your suspicion. Has your employer failed to do something with a reasonable amount of care such that you have suffered losses?

Figuring out whether you have a case and, subsequently, how to fight your case can be a confusing process. Where unsure, it is always best to consult an experienced lawyer who can point out what is important and advise you on the actions available to you.

What If I Am A Part-Time Worker?

The Employment of Part-Time Employees Regulations set out what you have a right to. Should an employer prove to be negligent in any of these aspects, you may be able to claim against your employer.

Where in doubt, you may wish to contact a lawyer for advice. Alternatively, you may lodge your case with the Ministry of Manpower through their WorkRight initiative.

What if I Am Exempted Under the Employment Act?

While the Employment Act covers most employees working under a contract of service with an employer, it does not cover:

• Managers and executives whose salary is more than S$4,500 a month
• Seafarers
• Domestic workers
• Civil servants

The Act may also not apply to professionals with specialised knowledge and who carry out similar responsibilities to managers or executives, such as doctors.

If your case falls under one of the exemptions, but you wish to claim an instance of unfair treatment from your employer, do seek immediate legal advice. Each circumstance is unique, and it is best you obtain the information you need from a professional

What If I Have Employment-Related Queries?

For any matter relating to employment laws or issues such as unfair termination, you may lodge a case via workright@mom.gov.sg or 1800 221 9922. For their online service, click on this link (http://www.mom.gov.sg/eservices/services/report-an-employment-act-violation). Information provided will be kept strictly confidential.

As a guide when lodging a case, you should prepare:

• A valid SingPass
• Details of your employer (e.g. company name, Unique Entity Number)
• Your personal particulars (e.g. address, NRIC, contact number)
• Your employment details (e.g. period of employment, salary)

You may also be required to submit documents to support your case and explain your situation. These documents include, where relevant:

• Your employment contract
• Payslips, CPF statement or bank statement
• Resignation or termination letter
• Timesheets or punch card
• Medical certificate or medical bill