Singapore: Court finds employer lacked sufficient cause to dismiss its former pregnant employee

A pregnant employee was dismissed with payment in lieu of notice. Dispute ensued and the employer brought claims for the return of company property and misappropriation of company funds. The former employee argued that her employment was terminated because she was pregnant and filed counterclaims for wrongful dismissal. The Singapore District Court in Longitude 101 Pte. Ltd. v Navinea Kanapathy Pillai [2024] SGDC 47 allowed the counterclaims and in doing so considered the Tripartite Guidelines on Wrongful Dismissal (Tripartite Guidelines) in assessing what amounted to sufficient cause under section 84(1)(b) of the Employment Act 1968 (EA).

This update focuses solely on the employee's counterclaim for wrongful dismissal.

Background

The defendant employee (Employee) was the sole employee and director of the plaintiff employer (Employer) at the time of the termination of her employment. The Employee's employment contract provided for three months' notice or payment in lieu of notice.

On or around 15 December 2020, the Employee informed the Employer's sole shareholder of her pregnancy. On 27 April 2021, the Employer issued a notice of termination to the Employee.

The notice of termination stated, amongst others, that the termination was with immediate effect and that the Employer would pay the Employee 3 months' salary in lieu of notice (S$43,500), as well as an additional cash bonus of S$15,000. No reasons were provided for the termination, but the notice of termination referred to the right to give contractual notice.

Subsequently, the Employer commenced proceedings against the Employee for her alleged failure to return company property and for payment of a sum of S$100,500 allegedly misappropriated from the Employer's bank accounts.

In response, the Employee argued that the termination was wrongful as it was due to her pregnancy and was in breach of section 84(1)(b) of the EA, and brought counterclaims for damages.

Decision

Section 84(1)(b) of the EA provides that a female employee who is pregnant and has served her employer for at least three months shall not be deprived of maternity benefits that would have been due to her under Part 9 of the EA if she was given a notice of dismissal without sufficient cause by her employer.

Definition of sufficient cause

The court observed that the EA did not define sufficient cause for dismissal under section 84(1)(b), and there were no reported decisions clarifying this.

The court then turned to the Tripartite Guidelines on Wrongful Dismissal (Tripartite Guidelines) on what constituted wrongful dismissal. The court noted that, even though there was no specific reference to the Tripartite Guidelines in the EA, the Employment Claims Tribunals (ECT) were required to have regard to the Tripartite Guidelines when deciding a wrongful dismissal dispute (including such disputes relating to section 84(1)(b)). There was no reason why civil courts should not equally do so to prevent inconsistencies in decisions, which could lead to forum shopping by parties seeking the most favourable venue for their wrongful dismissal claims.

On sufficient cause, the court found:

• giving contractual notice or paying salary in lieu of notice did not of itself amount to sufficient cause. Under the Tripartite Guidelines, it was wrongful to dismiss a pregnant employee with notice to deprive her of her maternity benefits where: (a) the employer was unable to provide a legitimate reason for the dismissal, (b) the employee was dismissed shortly after she informed her employer of her pregnancy and (c) the employer did not pay her maternity benefits;
• retrenchment did not amount to sufficient cause;
• a dismissal without notice on the ground of misconduct, if the employer had not conducted due inquiry into the alleged misconduct, did not amount to sufficient cause;
• a dismissal due to discrimination did not amount to sufficient cause; and
• a dismissal to punish an employee for exercising an employment right did not amount to sufficient cause.

Burden of proof

The court highlighted a difference in the legal burden of proof for claims under section 84(1)(b) of the EA, depending on whether the claim was brought under the Employment Claims Act before the ECT or the General Division of the High Court, or in court proceedings such as the present matter:

• for the former, the employer bore the legal burden of proving that a pregnant employee was dismissed with sufficient cause; and
• for the latter, the employee bore the legal burden of proving that she was dismissed on the grounds of her pregnancy. The initial evidential burden fell on her to adduce some (not inherently incredible) evidence that her dismissal was due to her pregnancy. Thereafter, the evidential burden shifted to the employer.

Findings

It was not disputed that the Employer was aware of the Employee's pregnancy at the time the notice of termination was issued. As noted above, termination with notice or payment in lieu of notice, without more, did not amount to sufficient cause. On evidence, the Employer failed to specify any reasons for terminating the Employee's employment with notice, and the court found that the Employer failed to establish sufficient cause for the Employee's dismissal.

The court granted the Employee damages which covered salary in lieu of notice, maternity benefit under the EA (as the baby was not a Singapore citizen), encashment of annual leave, the additional cash bonus declared in the notice of termination and the related CPF contributions.

Key Takeaways

Terminating a pregnant employee's employment is a sensitive matter and requires careful handling. The threshold to show that there is sufficient cause for dismissal entitling the employer to avoid paying maternity benefits, is high. Giving contractual notice, without more, falls short of this standard.

The court's reference to the Tripartite Guidelines also clarifies that the guidelines are relevant regardless of whether the wrongful dismissal claim is brought before the ECT or in court proceedings.

Herbert Smith Freehills LLP provides access to Singapore law advice through our Formal Law Alliance with Prolegis LLC.