GENA HULASH RAM v LIM JOO HUAT ENTERPRISE PTE. LTD

Facts

Mr Gena Hulash Ram, an Indian national, worked for Lim Joo Huat Enterprise Pte. Ltd as a "Packer" from 17 December 2022 to 25 August 2023. His only written terms were in the In-Principle Approval Letter (IPA) from the employer's work pass application, which declared a basic monthly salary of $1,000, a $200 housing allowance, a $300 allowance labelled "Others", and an overtime rate of $7.87 per hour.

The employer treated the $300 "Others" allowance as a flat payment for overtime, whatever the hours actually worked, and said this was for administrative convenience. The employee filed a claim in the Employment Claims Tribunal on 19 December 2023 for unpaid overtime pay. The Tribunal Magistrate in ECT 11052/2023 allowed the claim in part. The Magistrate accepted the employee's record of hours but held that overtime pay should be offset against the $300 allowance, reducing the award from $5,711.11 to $3,254.84. The employee appealed to the General Division of the High Court in Employment Claims Tribunal Appeal No 2 of 2024, heard by Philip Jeyaretnam J. Counsel for the employee acted pro bono.

Issues

1. Whether an employer may offset a foreign worker's overtime pay against a fixed monthly allowance declared in the work pass application.
2. Whether party-and-party costs may be awarded to a successful party whose counsel acted pro bono.

Holding

The High Court allowed the appeal. It ordered that the overtime payment due from the employer be increased from $3,254.84 to $5,711.11, being overtime at the declared rate for the hours the Magistrate found were worked, without deducting the $300 allowance already paid. The employer was ordered to pay costs fixed at $9,000 all-in.

Reasoning

On the offset, the court rejected the employer's position that the "Others" allowance could serve as a fixed payment for overtime. Section 38(4) of the Employment Act entitles a worker to be paid for the extra hours actually worked, so an employer cannot cap overtime or fix it at a set sum. The IPA adopted the definitions in the Employment of Foreign Manpower (Work Passes) Regulations 2012, under which fixed monthly allowances are allowances that do not vary from month to month and must not include any form of overtime payment. The "Others" allowance was such a fixed allowance and so could not cover or absorb overtime. Paying only that allowance also, in effect, lowered the overtime rate below the rate declared to the Controller of Work Passes, which the Regulations forbid without the employee's written consent. The court accepted that s 8 of the Employment Act makes less favourable terms void only to the extent they are less favourable, but held that permitting the offset would not bring the arrangement into line with the statutory scheme; it would still cut the overtime rate.

On costs, the employee's counsel sought $10,000 all-in. Following SATS Construction Pte Ltd v Islam Md Ohidul [2016] 3 SLR 1164, applied in Liu Huaixi v Haniffa Pte Ltd [2017] SGHC 270, the court held that a successful party may recover costs even where counsel act pro bono, and that this does not give effect to a champertous arrangement. There was no unjust benefit, since counsel had done substantial work, and no prejudice to the employer, which would have faced costs in any event. Costs were fixed at $9,000 all-in.

From the judgment