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SINGAPORE: Two days before his probation period at a law firm ended, a man was informed that he had not passed probation and that his employment would end.<\/p>\n
He filed a claim seeking one month’s salary in lieu of notice and won against the law firm, which appealed against the decision.<\/p>\n
Nanyang Law said it was entitled to let the probation period lapse and give the man a letter of non-confirmation with no notice period and no salary in lieu of notice, and that it was not a termination but simply an expiry of the probation period.<\/p>\n
In a judgment published on Monday (Aug 24), Justice of the Court of Appeal Sushil Nair dismissed the law firm’s appeal and upheld the order for Nanyang Law to pay Mr Ghui Meng Yang about S$2,900 (US$2,280).<\/p>\n
Justice Nair, who is the incoming Chief Justice, clarified that whether employment automatically ends when probation expires depends on the wording and construction of the particular employment contract.<\/p>\n
Mr Ghui was hired as a supporting officer in April 2023 by Nanyang Law, with a probation period of three months that ran until Jul 9, 2023.<\/p>\n
According to the terms of employment, either party may terminate the contract during the probation period by giving one month’s prior written notice without the need for any reason to be given.<\/p>\n
On Jul 7, two days before the probation period ended, Nanyang Law issued a letter to Mr Ghui titled “Expiry of Your Probation Period”.<\/p>\n
The letter stated that the company had decided not to continue Mr Ghui’s service beyond the probation period and that his employment would end on Jul 9 with his last physical day in the office being Jul 7.<\/p>\n
The law firm offered a “goodwill payment” of additional salary for seven days, which would mean Mr Ghui was paid until Jul 18.<\/p>\n
Mr Ghui replied in an email on Jul 10, saying it was implied within the law firm’s employment guidelines that the notice period of someone in his capacity should always serve and be served one month’s notice period or be compensated.<\/p>\n
Nanyang Law replied that Jul 9 was the expiry of Mr Ghui’s probation and was not a termination, therefore no notice period was required.<\/p>\n
The law firm claimed that issues arose in relation to Mr Ghui’s performance and punctuality during the probation period, alleging that he made “several significant errors” in his work and failed to improve despite counselling.<\/p>\n
Mr Ghui disputes these allegations.<\/p>\n
In September 2023, Mr Ghui filed a claim with the Employment Claims Tribunal for one month’s salary of S$3,000, saying he was entitled to it in lieu of notice.<\/p>\n
The law firm contended that it was entitled to determine the contract of employment by letting the probation period lapse, and by giving Mr Ghui a letter of non-confirmation. No notice period was required and no salary in lieu of notice was payable, argued the law firm.<\/p>\n
A magistrate heard the case in January 2024 and allowed the claim in part, finding that there is nothing in Singapore law that mandates either that probationers whose contracts define a period of probation must or must not be regarded as fixed-term employees.<\/p>\n
The issue is to be determined in accordance with the agreement between parties, said the magistrate.<\/p>\n
The magistrate pro-rated the salary to 20 working days based on the number of work days left in the one-month notice period.<\/p>\n
On appeal, Nanyang Law maintained its argument and said that it would be pointless to have a probation period if notice is still required, and it is “pointless” to have an unsuitable employee continue working.<\/p>\n
In assessing the arguments, Justice Nair turned to the Employment Act to determine whether the probation period is in itself a contract of service for a specified period of time.<\/p>\n
He said the Employment Act was “silent” on what amounts to a contract of service for a specified period of time and turned to local authorities on how they dealt with probation periods.<\/p>\n
Justice Nair said the question of whether a probationary employee has been confirmed or terminated would depend on the terms of the particular employment contract before the court.<\/p>\n
He said he could accept the law firm’s suggestion that it may be commercially pointless for an employee who has already been assessed as unsuitable during the probation period to continue working during the notice period.<\/p>\n
“However, as (Nanyang Law) itself recognised, all these perceived problems can be obviated by clear drafting,” said Justice Nair.<\/p>\n
He concluded that not every contract that stipulates a probation period is automatically a contract of service of a specified period of time such that employment ends at the end of the period.<\/p>\n
“Consideration would have to be given to the contractual term in question, including where appropriate the factual context in which it was entered into, to determine if it has the effect of providing for automatic termination without the need for notice or payment in lieu of notice at the end of the probation period, if the probationer was informed that they would not be confirmed or retained afterwards,” said Justice Nair.<\/p>\n
He said Nanyang Law’s submissions presupposed that the terms of employment it had with Mr Ghui represented, in effect, a contract for probation.<\/p>\n
This assumption was inconsistent with the other terms, which provided for the conditions of employment including the relevant notice period on confirmation and the conclusion of a probation period.<\/p>\n
Nothing in the terms suggested that Mr Ghui would not continue under the same contract if he had been confirmed, and the terms also provided for escalating annual leave entitlements which would be otiose, or useless, if the contract was only for three months, said Justice Nair.<\/p>\n
He said the magistrate was entirely correct in finding that the probation clause did not create a fixed-term contract between Nanyang Law and Mr Ghui that would automatically expire on Jul 9, 2023 unless Mr Ghui was confirmed.<\/p>\n
Consequently, Mr Ghui was entitled to one month’s notice from the date of notice of termination, which was Jul 7, 2023. Since he had been paid for Jul 7 itself, he was entitled to be paid for the remaining working days of the notice period, which were 20 days.<\/p>\n
The payment in lieu of notice was pro-rated to S$2,857.14, and the judge also ordered the company to pay Mr Ghui disbursements of S$30.<\/p>\n
It will also have to pay costs when they are determined.<\/p>\n<\/div>\n
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