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Meaning of the Term Employee

Info: 5442 words (22 pages) Essay
Published: 14th Aug 2019

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Jurisdiction / Tag(s): UK Law

Underlying a typical employer-employee relationship would be a contract. Hence the matters discussed in the chapters pertaining to contract law would generally still be of relevance. In addition, there are many other legal issues concerning employment. This chapter is concerned with these as well as the contractual issues pertaining to employment.

MEANING OF THE TERM “EMPLOYEE”

The first issue that has to be sorted out is the meaning of the term “employee”. Though it may seem obvious who an employee is, this may not always be so. Instead of being an employee, a person may actually be an independent contractor. It is important to make a distinction between an employee and an independent contractor at the very outset for various reasons. For instance, generally an employer is vicariously liable’ for the acts of his employee, but not for the acts of his independent contractor. Further, various statutes such as the Central Provident Fund Act, Employment Act and the Workmen’s Compensation Act impose obligations on employers in respect of employees and not in respect of independent contractors. Thus it is important to make this distinction.

As stated in Market Investigations, Ltd V Minister of Social Security (1968), in determining whether a person is an employee or an independent contractor, there is no overriding test and all relevant factors have to be taken into account. Further, the way in which the

Subject to exceptions, both the conventions provide for limitation of liabilities. These limitations are binding and are not subject to the issues contract describes the relationship is inconclusive. Thus even if the contract states that a person is not an employee, in legal terms he may still be considered an employee. Some of the relevant factors are:

• control (the more control one exercises over the services of another, the more likely that there is an employment relationship between the parties)

• integral part of the work (if a person engages the services of another and those services form an integral part of the business of the person engaging the services, that points towards there being an employment relationship between the parties)

• method of payment (if payment is made according to work done, that points towards there being no employment relationship between the parties; on the other hand, if payment is made in the form of wages or salary, that points towards there being an employment relationship between the parties)

• obligation to work only for the employer (if there is such an obligation, that points towards there being an employment relationship between the parties)

• stipulations as to working hours (if there are such stipulations, that points towards there being an employment relationship between the parties)

• overtime pay (if there is such pay, that points towards there being an employment relationship between the parties)

• holidays (if the contract provides for holidays, that points towards there being an employment relationship between the parties)

• medical leave (if the contract provides for medical leave, that points towards there being an employment relationship between the parties)

• right to dismiss (if the contract provides for dismissal, that points towards there being an employment relationship between the parties)

• right to delegate work (if the individual can delegate his work to others, that points towards there being no employment relationship between the parties)

• provision of tools and equipment (if the individual provides his own tools or equipment for the services, that points towards there being no employment relationship between the parties)

• chance of profit or loss (if the person providing the services stands to make a profit or a loss, that points towards there being no employment relationship between the parties)

These factors are not exhaustive. Neither are they conclusive. Further, different factors may point in different directions and hence all the factors have to be weighed and balanced before finally coming to a determination.

One case in which the issue arose for consideration was Kuroeka Enterprises Pte Ltd v CPF Board (1991). In this case, the question arose as to whether Central Provident Fund contributions had to be made in respect of certain freelance hostesses. That depended on whether the hostesses were employees of the lounge. On the facts, the lounge had complete control over the services provided by the hostesses. Moreover, the services formed an integral part of the business of the lounge. In addition, the hostesses did not stand to make a profit or a loss by providing their services. Further, the lounge had the right to dismiss the hostesses. In the circumstances, the court held that the hostesses were employees of the lounge.

DUTIES OF THE EMPLOYEE

An employment relationship imposes various duties on the part of the employee. These duties are implied into the contract of employment.’ Some of these implied duties are as follows:

Duty to obey instructions

Firstly, it is the duty of the employee to obey the instructions of the employer. If the employee does not obey the instructions of the employer and that amounts to a repudiatory or fundamental breach’ on the part of the employee, the employer may be able to summarily dismiss the employee without having to give him notice or salary in lieu of notice. In Pepper v Webb (1969) for instance, when the gardener, who was told by his employer to do some work, refused and replied that he could not care less about the employer’s “bloody greenhouse and … sodding garden”, the court held that the employer was justified in summarily dismissing the employee.

However, the employee does not have a duty to obey his employer’s instruction if it is unreasonable. What is unreasonable would depend on the circumstances. However, in Sim v Rotherham Council (1987), the court held that it was not unreasonable for the teachers in question to be asked to cover for teachers who were absent. Similarly, in Cresswell v Board of Inland Revenue (1984), the court held that it was not unreasonable for the employer to ask his employees, who were used to working manually, to switch over to computers.

In addition, the employee does not have to obey an instruction of the employer if it is unlawful or if it exposes the employee to exceptional risk that is not normal in that line of work. For instance, in Donovan v Invicta Airways Ltd (1970), the court held that the pilot employee did not have to obey his employer’s instructions to fly an unsafe plane. Similarly, in Morris v Henlys Ltd (1973), the court held that the employee in question was not in breach of contract in not following his employer’s instructions to falsify certain records belonging to the employer.

Duty of care

Secondly, an employee owes his employer a duty of care or a duty not to be negligent.’ If this duty is breached and it causes a loss to the employer, the employer may be able to sue the employee for the loss. In Janata Bank v Ahmed (1981), the bank employee was careless in not making certain checks, as a result of which a client managed to defraud the bank. The court held that the employee was liable to the bank for the loss.

Where the duty is breached, in addition to suing for damages, if the employee’s breach is repudiatory or fundamental,’ that may also justify summary dismissal without notice or salary in lieu of notice.

Duty of good faith and fidelity

Thirdly, an employee owes his employer a duty of good faith and fidelity. Thus for instance, the employee should not, without the employer’s consent, place himself in a position of conflict of interests, make use of the employer’s property for his own purposes or take a secret profit or bribe.’ If the duty is breached, the employee may be made liable for the losses suffered by the employer or, in certain circumstances, may have to account for the profits made. Additionally if the breach is repudiatory or fundamental,’ the employee may be summarily dismissed without the employer having to give him notice or salary in lieu of notice. In Boston Deep Sea Fishing v Ansell (1888) for instance, where the employee director took a secret commission on a shipbuilding contract, he was ordered to turn over the commission to the company and in addition it was held that he was rightfully dismissed summarily.

The duty of good faith and fidelity also requires the employee not to do outside work if by doing such outside work, his employer’s interests are likely to be greatly affected. For instance in Hivac Ltd v Park Royal Scientific Instruments Ltd (1946), where the highly skilled employees in question who had access to their company’s manufacturing data worked for competitors during their spare time, the court held that this duty was breached. On the other hand, in Nova Plastics Ltd v Froggatt (1982), where an odd job labourer started working for a competitor in his free time, the court held that the duty was not breached, as great harm was unlikely to be inflicted on the employer.

The contract may also expressly provide for such restraints and such restraints would be enforceable if they are not unreasonable considering the circumstances:’ Rowe v Radio Rentals Ltd (1982). If the implied duty or a valid express restraint is breached, the employer may be able to sue for damages if he suffers some loss or to seek an account for profits made by the employee. Further, if

the breach is repudiatory or fundamental,’ the employee may also be summarily dismissed.

The question might also arise as to whether the employee can work for a competitor or set up a business in competition after he leaves his current job. There might be an express clause in the contract pertaining to this, and the validity of such express clauses have been examined elsewhere. However, even without such an express clause, the employee is duty bound not to work for a competitor or set up a business in competition if he had access to trade secrets or highly confidential information. However, if the information is not highly confidential in nature or if it does not amount to a trade secret, then the employee is free to work for a competitor or set up a business in competition. What is highly confidential would depend on the facts of each case. In Medivac International Management Pte Ltd v John Walter Moore (1988), the information in question related to certain charge rates. As these charge rates were easily available in the market, the court held that the information was not highly confidential and hence the employee was not restrained from making use of it.

If the information relates to a trade secret or is highly confidential and the employee starts working for a competitor or sets up his own business in competition, he may be liable in damages or may have to account for profits made. He may also be restrained by means of an injunction from so competing or working for a competitor.

DUTIES OF THE EMPLOYER

Just like the employee, the employer too owes various duties in an employment relationship. These duties are imposed through statutes as well as case law.

Duties under the Employment Act

One statute that imposes various duties on the employer is the Employment Act. Unless otherwise stated all sections referred to in

this part are with reference to the Employment Act. However, the Employment Act does not apply to all employees. It only applies to employees as defined in section 2 of the Employment Act. Section 2 states that an employee is a person engaged under a contract of services and that includes a workman. Under the Employment Act, a workman refers to the following:

• any person, skilled or unskilled who is engaged in manual labour including any artisan or apprentice,

• any person employed in the operation or maintenance of mechanically propelled vehicles used for the transport of passengers for hire or for commercial purposes,

• any person employed partly for manual labour and partly for the purpose of supervising any workman provided, at least half his time is spent on doing manual work,

• bus conductors,

• lorry attendants,

• bus, lorry and van drivers,

• bus inspectors,

• goldsmith and silversmith employed in the premises of the employer,

• tailors and dressmakers employed in the premises of the employer, • harbour-craft crew, and

• all workmen employed on piece rates in the premises of the employer.

However, section 2 of the Employment Act does not extend the term employee to include the following:

• seamen

• domestic workers

• any person employed in a managerial, executive or confidential, position, and

• any person employed by the government or a statutory board.

Thus these persons are not covered by the Employment Act. Further, certain provisions of the Emnlovment Act such as Part IV only apply to employees who are workmen or who earn a basic salary not exceeding $1,600 per month. Thus in the case of an ordinary teacher or clerk in a private school, since he or she is unlikely to be employed in a managerial, executive or confidential position, the Employment Act is likely to be applicable. However, if he or she earns more than $1,600 a month, Part N of the Employment Act and other parts or provisions with similar restrictions would not apply. Further, it must be pointed out that provided a person falls within the ambit of the Employment Act, it does not matter that he is a foreigner or part-timer.”

We shall now proceed to look at some of the duties imposed by the Employment Act. Many of the duties imposed on the employer emanate from Part N of the Employment Act, which contains matters pertaining to rest days, leave and hours of work. However, as stated, Part N only applies to workmen or employees earning not more than $1,600 per month.

(a) Rest days, leave and hours of work

Section 36 of Part IV provides that every employee is entitled to one rest day in a week, which shall be a Sunday or such other day as may be determined by the employer. It is also provided that in the case of shift work, a continuous period of 30 hours of rest may be substituted as a rest day (section 36(2)). Subject to certain limited exceptions (section 38(2)),12 an employee cannot be forced to work on a rest day. However, if the employee does work on the rest day, he is entitled to additional pay, the details of which are contained in section 37.

Section 38(1) of Part IV provides that an employee shall not be required to work more than 8 hours in a day or 44 hours in a week. Thus an employee cannot be forced to work beyond that. However, there are certain limited exceptions to this rule, such as where there has been an accident or where the work is essential for defence or security (section 38(2)). Where the employee does work beyond the required hours, he is entitled to overtime pay, the details of which are contained in section 38(4).

Section 42 of Part IV relates to public holidays, and it provides that the employee is entitled to paid leave in respect of public holidays, though by agreement the employer may substitute some other day or days. If an employee is required to work on a public holiday, he is entitled to additional pay, the details of which are contained in section

42(4).

Section 43 of Part IV relates to annual leave, and it provides that an employee who has served an employer for not less than 3 months is entitled to 7 days of leave for the first 12 months of continuous service with the same employer and an additional day of leave for every year of completed service subject to a maximum of 14 days. However, the contract or collective agreement” may provide for more days of leave (section 53(3)).

Matters such as compassionate leave, study leave or unpaid leave are not governed by the Employment Act. Thus whether the employee is entitled to such leave would turn on the provisions of the contract or collective agreement.

Section 44 of Part IV relates to sick leave. It provides that an employee who has been certified to be sick by a medical practitioner and who has served an employer for a period of not less than six months is entitled to 14 days of paid sick leave in a year, if he is not hospitalised, and to 60 days of paid sick leave in a year, if he is hospitalised.

Failure to observe any of the provisions of Part N results in a commission of an offence on the part of the employer (section 53).

(b) Payment of salary

Aside from Part IV, the Employment Act also has provisions pertaining to the payment of salary, such as when salary is to be paid or when deductions can be made from salary (sections 20 to 34). However, unlike in some countries, Singapore does not have in force a minimum wage that has to be paid. Further, it may be noted that in relation to wage increases, while the National Wages Council may make recommendations in respect of annual wage increases, these are not binding on employers and hence employers are not

legally obliged to follow them. It may also be noted that in relation to redundancy payments, though there is a reference to such payments under the Employment Act, such payments are not compulsory under the Employment Act. However, they may be paid if the contract or collective agreement calls for it.

In respect of employees not covered under the Employment Act or under Part IV of the Employment Act, the various matters discussed above such as sick leave or entitlement to overtime pay would have to be determined by looking at the provisions of the contract or the collective agreement.

(C) Maternity leave

In relation to maternity leave, besides the Employment Act, another statute that is relevant is the Children Development Co- Savings Act. Pursuant to the Employment Act (section 76) and the Children Development Co-Savings Act (section 9), every female employee” is entitled to maternity leave for

• a period of four weeks immediately before and for a period of eight weeks immediately after her confinement, or

• a period of 12 weeks, as agreed to by her and her employer, commencing not earlier than 28 days immediately preceding the day of her confinement or later than that day, or

• a period of eight weeks, as agreed to by her and her employer, commencing not earlier than 28 days immediately preceding the day of her confinement or later than that day and to one or more further periods, not exceeding 24 days in aggregate, as agreed to by her and her employer, which shall be taken within six months commencing on the day of her confinement.

In addition, under the Employment Act and the Children Development Co-Savings Act, in respect of the first and second confinements, the employer is required to pay the employee for a period of eight weeks. This is not subject to any maximum. For the remaining period of the maternity leave, the employer is also obliged to pay the employee by virtue of the Children Development Co-Savings Act. However, this is subject to a stated maximum. Further, the employer who makes the latter payment can seek reimbursement from the Government. In respect of the third and fourth confinements, there is no obligation to pay under the Employment Act. However, there is an obligation to pay under the Children Development Co- Savings Act, though this is again subject to a stated maximum. The employer who makes the payment can likewise seek reimbursement from the Government. Any employer who fails to pay his female employee in accordance with her entitlement would be guilty of an offence (section 87).

Duties under the Central Provident Fund Act

Section 7 of the Central Provident Fund Act provides that every employer, unless exempted, has to pay Central Provident Fund contributions in respect of the employee at the prescribed rates. This duty extends to part-time employees as well. However, there are certain exemptions such as in respect of

• partners,

• domestic employees, and

• foreign employees on employment passes, professional visit passes or work permits.

Where the contributions have to be made and they have not been made, that would amount to an offence under 58 of the Central Provident Fund Act.

Duties under the Retirement Age Act

The Retirement Age Act provides that the minimum age of retirement in Singapore is 62 years. However, there are certain exceptions, such as in the case of cabin crew, police officers and teaching staff of universities and polytechnics. If a person were unlawfully forced to resign or retire before his retirement age on the ground of age, the employer would be guilty of an offence under section 4(3) of the Retirement Age Act. However, if an employee is genuinely dismissed on some other ground, for instance, if he is dismissed because he has misappropriated the employer’s property, section 4(3) would not be triggered.

Duties under the Factories Act

Another statute that imposes various obligations on the employer is the Factories Act. Unless otherwise stated, all sections referred to in this part are with reference to the Factories Act.

Section 6(1) of the Factories Act provides a general definition of a factory. It states that a factory is a place where persons are employed in manual labour for the purposes of

• making of any article or part of any article; or

• altering, repairing, ornamenting, finishing, cleaning, washing, breaking up or demolishing any article; or

• adapting for sale any article.

provided the work is carried on by way of trade or for purposes of gain, and the employer of the persons working therein has the right of access or control over the place.

Though section 6(1) provides that the work must be carried on by way of trade or for purposes of gain, section 6(9) provides an exception. It states that premises, where building operations or works of engineering construction are carried out on behalf of the Government or a statutory board, shall not be excluded on the ground that work there is not being carried on for the purpose of gain or trade. In addition to the general definition in section 6(10, section 6(2) provides some specific examples of factories where persons are

employed in manual labour. These examples include shipyards and any premises in which building operations or works of engineering construction are carried on.

Subject to some limited exceptions, any person who uses or occupies a factory firstly comes under a duty to register it as such. Failure to do so would result in the commission of an offence (section 9).

Secondly, once a place is deemed to be a factory, the person using or occupying it comes under various obligations relating to diverse matters such as cleanliness (section 12), overcrowding (section 13), ventilation (section 14), lighting (section 15),. drainage (section 16), sanitary conveniences (section 17), the secured fencing of certain equipment such as prime movers and transmission machinery (sections 18 to 22), safe equipment (section 25), dangerous substances (section 26), hoists and lifts (section 29), dangerous fumes (section 34), safe access (section 33), steam boilers (section 36), vulcanisers (section 38), air receivers (section 39), gas plants (section 44), first- aid (section 58) and protective clothing (section 62). In addition to the provisions of the Factories Act, there are numerous regulations imposing obligations in respect of matters such as abrasive blasting, asbestos, crane drivers, shipbuilding, building operations and works of engineering construction.

Contravention of the provisions of the Factories Act or the regulations results in the commission of an offence (section 88). In addition, the employee who is injured may bring a civil claim against the employer for breach of statutory duty. The employee may also be able to sue the employer for negligence or breach of contract. Alternatively, the employee may be able to make a claim under the Workmen’s Compensation Act, which is discussed below.

However, it must be pointed out that the Factories Act is likely to be repealed soon and replaced by the Workplace Safety and Health Act. In addition to factories, the latter statute extends the protection to certain other premises such as laboratories. It also imposes obligations on many other parties besides the occupier such as persons at work and manufacturers.

Duties under the Workplace Safety and Health Act

Another statute that imposes various obligations on the employer is the Workplace Safety and Health Act, which has replaced the former Factories Act. Unless otherwise stated, all sections referred to in this part are with reference to the Workplace Safety and Health Act.

Unlike the former Factories Act, the Workplace Safety and Health Act covers more premises. The premises now covered (section 2 read with the First Schedule to the Workplace Safety and Health Act) include:

(a) Factories (which among other premises, includes any premises where building operations or any works of engineering construction are carried out),

(b) Certain parts of an airport,

(c) Any ship in a harbour where certain types of activities are carried out,

(d) Any laboratory,

(e) Any hotel, lodging house, dormitory or service apartment,

(f) Any restaurant, bar or canteen,

(g) Any hospital, hospice or nursing home,

(h) Any veterinary centre, and

(i) Any premises where landscaping or garden maintenance is carried out.

Nonetheless, certain premises such as shops, offices, schools and tourist attractions are yet to be covered. Also unlike the former Factories Act, more people owe duties under the Workplace Safety and Health Act and this, too, is another positive development. For instance, occupiers, employers and employees owe duties under the Workplace Safety and Health Act. The duties of the occupier are set out in section ll and the basic duty of the occupier is to take reasonably practicable measures. The duties of the employer are set out in section 12 and again the basic duty of the employer is to take reasonably practicable measures. The duties of the employee are set out in section 15. For instance, if the employee does not use protective equipment provided or willfully or recklessly endangers the safety and health of himself or others, there could be liability under the Workplace Safety and Health Act.

In addition, unlike the former Factories Act, there can be liability based on risk alone without there being an accident. Finally, it must be mentioned that the Workplace Safety and Health Act only creates criminal liability and not civil liability. If a person is injured at work and wants compensation, he would have to claim work injury compensation under the Work Injury Compensation Act or sue in

negligence.

Duties under the Workmen’s Compensation Act

Section 3(10 of the Workmen’s compensation act provides that if a workman is accidentally injured in the course of his employment,

the employer is liable to pay compensation in accordance with the provisions of the Act.

Section 2(1) of the Workmen’s Compensation Act defines a workman as any person engaged in a contract of service whether by way of manual labour or otherwise, but excludes certain persons such as the following:

• persons employed otherwise than by way of manual labour and earning more than $1,600 per month,

• domestic servants, and

• police officers.

As stated in section 3(1) of the Workmen’s Compensation Act, liability arises only if the injury occurs in the course of employment. In this regard, as stated in Weaver v Tredegar Iron and Goal Co Ltd

(1940),

a man’s work does not consist solely in the task which he is employed to perform, it includes also matters incidental to that task. Times during which meals are taken, moments during which the man is proceeding towards his work from some portion of his employer’s premises to another, and periods of rest may all be included. Nor is his work necessarily confined to his employer’s premises. The man may be working elsewhere, eg in a building a house or in work on a road or in work at a dock. The question is not … whether the man was on the employer’s premises, it is rather was he within the scope or area of his employment.

Thus if a foreign worker working in a construction site is accidentally injured while resting or taking a toilet break, the irLjury would still be deemed to have occurred in the course of employment. Further, so long as the injury occurs in the course of employment, liability would attach and it does not matter that the employer is not at fault.

In order to meet the claims under the Workmen’s Compensation Act, section 23(1) of the Act provides that every employer has to take out compulsory insurance. Failure to do so results in the commission of an offence (section 23(3)). However, the Workmen’s Compensation (Exemption of Employer) Consolidation Notification provides that certain categories of employers, such as companies fully owned by the Government, statutory boards, international airlines, international shipping lines, international oil companies, banks, finance companies, retail shops, coffee shops, theatres, hotels, hairdressing salons, tailoring or dressmaking shops and employers of all persons employed otherwise than by way of manual labour, are exempted from taking out such compulsory insurance.

The Third Schedule to the Workmen’s Compensation Act lists the amount of compensation that is payable. Though a claim for workmen’s compensation may be made quickly, as it does not have to be established that the employer was at fault, there is a maximum limit on the amount of compensation that is payable. This is unlike making a claim under negligence or making a claim for breach of a statutory duty. However, making a claim under negligence or making a claim for breach of statutory duty might involve more cost and time. Thus there are both advantages and disadvantages. But it must be pointed out that the workman has to make a choice. He can either claim workmen’s compensation or sue for negligence or breach of a statutory duty (section 33). He cannot claim both amounts, the reason being he cannot be doubly compensated in respect of the same injury.

Aside from compensation, subject to certain limits, the Workmen’s Compensation Act also requires the employer or his insurer to bear medical expenses related to the treatment of the workman who is accidentally injured in the course of his employment (sections 13 and 14).

Duty of care

In addition to the matters discussed above, the employer owes the employee a duty of care or a duty not to be negligent. Besides

extending to obvious matters such as providing a safe place of work and safe equipment, this duty can extend to other matters as well. For instance, duty of care can extend to providing competent staff, as in Butler v Fife Coal Company Ltd (1912). In this case, the court held that the employers in question were negligent in appointing incompetent staff as officers to be in charge of a mine, which resulted in the death of the plaintiff’s husband, who was an employee working in the mine. Further, though the employer is generally not bound to give job references, if he chooses to give a reference and the reference turns out to be carelessly made, there could be liability to the employee: Spring v Guardian Assurance plc (1994). Moreover, the duty of care not only extends to preventing physical injury or economic loss, but can also in certain circumstances extend to preventing psychiatric damage. In Walker v Northumberland County Council (1995), the employee in question compl

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