Do Singapore judges favour employers?

by Lucy Hook21 Jul 2016
The common perception – that laws in Singapore favour the employer, not the employee – may be changing, according to Julia Yeo, legal director at Clyde & Co.

Yeo told HRD that the status quo, which she said could be more accurately described as “business friendly”, was showing signs of moving towards stronger employee benefits and protection.

“The shift towards employee protection is really driven by and most clearly seen in legislation changes, and new policies and guidelines from the government and governmental bodies,” she said.

“The message and public pronouncements are clearly geared towards protecting the lower rung workers and the sandwiched ‎class of professional, managers and executives – who are not exactly top earners but still fall out of the purview of the Employment Act.”

Disputes that end up in court, however, tend to be between highly paid individuals and their former employers.

“These cases tend to centre on the contractual, rather than statutory, rights of parties,” Yeo said.

For example, in 2014, the High Court ruled that Commerzbank AG had to pay bonuses to 10 bankers in Singapore who were part of its now-defunct Dresdner unit, because the then-Chief Executive Officer, Stefan Jentzsch, had promised the employees a bonus pool.

The employees claimed that they were entitled to bonuses amounting to SG$9.5m and were induced to stay on in their roles because Jentzsch had pledged in August 2008 that the payments would be made the following February.

Despite the bonuses being discretionary contractually, the court held that a promise had been made and ordered the bank to pay the bonuses.

“This was a very favourable ruling for employees. Employers make bonus promises to employees and yet hope to hide behind contractual clauses giving them wide discretion to decide whether or not to give bonuses,” Yeo told HRD.

Yeo also cited a similar case in which the courts denied a legal bid by brokerage giant Jardine Lloyd Thompson (JLT) to stop its former staff from joining rival firms Howden Insurance Brokers and Huntington Search Partners or being poached by them.

Part of the judgement included the idea that employee mobility is to be encouraged.

Yeo said: “‎This does signal that employers can expect that the courts will not go easy on employers, and will adopt a robust approach in examining employer's claims.”

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