In two separate decisions, the High Court provides a new sentencing framework that imposes heftier punishments for failing to ensure the safety of employees at work and provides clarification as to whether settlement payments may be taken into consideration when determining the amount of compensation payable by an employer for workplace injury.

In brief

The General Division of the High Court (SGHC) in two recent decisions in Public Prosecutor v Manta Equipment (S) Pte Ltd [2022] SGHC 157 (“Manta Equipment“) and MTM Ship Management Pte Ltd v Devaswarupa and others [2022] SGHC 178 (“MTM Ship Management“) considered two pieces of legislation concerning workplace safety and accidents in Singapore.

In Manta Equipment, the High Court introduced a new sentencing framework with harsher penalties against employers that fail to ensure the health and safety of employees at work under the Workplace Safety and Health Act 2006 (WSHA).

In MTM Ship Management, the High Court confirmed that the Commissioner for Labour (“Commissioner“) is entitled to take into consideration settlement payments made by an employer to an employee when assessing the amount of compensation payable by the employer under the Work Injury Compensation Act (WICA) (Cap 354, 2009 Rev Ed) (“WICA 2009“).

Key takeaways

  • In Manta Equipment, the SGHC clarified that the indicative starting point sentence is to be derived from a holistic evaluation of both potential and actual harm caused by the employer’s breach of its statutory duties under the WSHA. Under the previous sentencing framework, potential harm was the dominant consideration in determining the indicative starting point sentence.
  • Where death or serious injury occurs, the harm caused by the employer’s breach of statutory duty is graded near the top end of the high range and can result in a fine of at least SGD 225,000 if the employer is moderately culpable and SGD 150,000 if the employer’s culpability is low.
  • In MTM Ship Management, the SGHC held that there is nothing under WICA 2009 that prevents the Commissioner from taking into account settlement payments when assessing the sum of compensation payable. However, the issue remains unsettled under the successor Work Injury Compensation Act 2019 (Act 27 of 2019) (“WICA 2019“).
  • The SGHC also clarified that a novel issue of statutory interpretation constitutes a substantial question of law that would allow a party to appeal against an order of the Commissioner. Under both WICA 2009 and WICA 2019, an appeal is permitted only if the appeal involves a substantial question of law, and the order is for the refusal or payment of compensation of SGD 1,000 or more.

Harsher sentencing framework against employers for breach of duty to ensure safety and health of employees at work

Manta Equipment concerns an appeal regarding the appropriate sentence for a breach of employer duties under the WSHA.

On appeal, the SGHC established a new sentencing framework for offences under section 12 of the WSHA which imposes a duty on employers to ensure the safety and health of employees at work. This new framework has resulted in a significant increase in the sentencing benchmarks for the indicative starting point sentence. The SGHC also provided guidance on the factors that should be considered in determining the indicative starting point sentence.

Background

Manta Equipment (S) Pte Ltd (“Manta“) is the employer of a worker who passed away due to a workplace accident. He was struck by the suspended jib of a tower crane being erected on a vessel at a shipyard. The jib had not been rigged according to the manufacturer’s configuration.

Manta pleaded guilty to and was convicted of a charge under the WSHA for failing to take, so far as was reasonably practicable, such measures as are necessary to ensure the safety and health of its employee at work. Specifically, Manta had failed to adequately implement safe work procedures for the erection of the tower crane, and establish and implement an adequate lifting plan.

The District Judge sentenced Manta to a fine of SGD 220,000 based on the sentencing framework set out in previous cases. The Prosecution appealed against the sentence and argued that a heftier fine of SGD 260,000 to SGD 280,000 was appropriate.

Decision of the SGHC

The SGHC rejected the previous sentencing framework that only considered the employer’s culpability and potential harm caused by the employer’s breach in the first stage where the sentencing judge determines the indicative starting point sentence. Instead, the sentencing judge should also consider the actual harm caused by the employer’s breach at this stage.

Under the new sentencing framework, the SGHC also introduced an increase in the indicative starting point sentences at each level of harm and culpability. For example, under the previous framework, an employer with low culpability and whose breach caused a low level of harm may be fined up to SGD 20,000. The new framework allows the sentencing judge to impose a fine of up to SGD 75,000 for such an offence.

The minimum fine for an employer with moderate culpability but whose breach of duty caused a high level of harm (e.g., death or serious injury), has also increased from SGD 150,000 to SGD 225,000. An employer who caused a moderate level of harm and is moderately culpable now faces a fine of at least SGD 150,000, up from SGD 80,000.

Culpability
LowModerateHigh
HarmHighSGD 150,000 to
SGD 225,000
Previously:
SGD 100,000
to SGD 150,000
SGD 225,000 to
SGD 300,00
Previously: SGD
150,000 to
SGD 300,000
SGD 300,000
to SGD 500,000
HarmModerateSGD 75,000 to
SGD 150,000
Previously: SGD
60,000 to SGD
80,000
SGD 150,000 to
SGD 225,000
Previously: SGD
80,000 to
SGD 100,000
SGD 225,000 to
SGD 300,000
Previously: SGD
100,000 to SGD
150,000
HarmLowup to SGD 75,000
Previously: up to SGD 20,000
SGD 75,000 to
SGD 150,000
Previously: SGD
20,000 to SGD 40,000
SGD 150,000 to
SGD 225,000
Previously: SGD
40,000 to SGD 60,000

In Manta’s case, the SGHC held that it was of moderate culpability but caused a high level of harm since the worker had actually died from the workplace accident. The indicative sentence was therefore gauged at SGD 300,000. However, because Manta had pleaded guilty, cooperated with the investigations and put in place post-accident rectification works, the sentence was calibrated downwards to SGD 250,000 under the second stage of sentencing, which involves a calibration of the indicative sentence based on offender-specific aggravating and mitigating factors.

High Court clarifies the effect of settlement payments on compensation orders made under the Workplace Injury Compensation Act

MTM Ship Management concerns an appeal against an order by the Commissioner for MTM Ship Management (“Applicant“) to make compensation to the next of kin of a former employee who passed away as a result of a workplace accident.

The SGHC clarified what constitutes a “substantial question of law” that would allow a party to appeal against an order of the Commissioner under the WICA 2009 and WICA 2019. The court also decided that the Commissioner is entitled to take into account settlement payments made by an employer to an employee when assessing the amount of compensation payable by the employer under WICA 2009.

Background

After a former employee of the Applicant suffered a tragic accident that led to his death, the Applicant approached the next of kin of the former employee to provide compensation for his death. In total, the Applicant paid out USD 144,000 (“Settlement Sum“). Subsequently, the former employee’s wife, mother and children (“Respondents“) lodged a claim with the Commissioner under the WICA 2009, claiming compensation for his death. The Commissioner made a compensation order amounting to SGD 190,703.96 (“WICA Order“).

In response, the Applicant argued that the WICA Order should be withdrawn because the Settlement Sum that had been paid exceeded the sum that the Applicant was ordered to pay under the WICA 2009. Accordingly, the Applicant claimed that it was not liable to pay any further sums to the Respondents. However, this was rejected by the Commissioner and the Applicant appealed to the SGHC.

Decision of the SGHC

The first issue that the SGHC dealt with was whether the Applicant had a right to appeal against the WICA Order. Pursuant to section 29(2A) of WICA 2009, no appeal shall lie against any order of the Commissioner, unless a substantial question of law is involved in the appeal and the amount in dispute is not less than SGD 1,000. Similarly, under section 58(1) of the WICA 2019, an order for compensation made by the Commissioner may only be appealed against if the appeal involves a substantial question of law, and the order is for the refusal or payment of compensation of SGD 1,000 or more.

The SGHC clarified that the requirement of a “substantial question of law” is also fulfilled where novel issues of statutory interpretation are present. The appeal involved the question of whether the Commissioner has the power under the WICA 2009 or the WICA 2019 to take into account settlement payments made by an employer to an employee when assessing the amount of compensation payable by the employer. As this is a question that involves issues of statutory interpretation, the SGHC held that the Applicant was entitled to appeal against the WICA Order.

As for the substantive issue on the settlement payments, the SGHC held that the Commissioner is empowered to take into account settlement payments when assessing the amount of compensation payable for an employee’s death. This permits the Commissioner to deduct settlement payments from any compensation assessed to be payable where they deem it fair and reasonable to do so based on the facts of the case before them.

Based on the facts, the SGHC held that the effect of the payment of the Settlement Sum was to reduce the amount of compensation payable by the Applicant under the WICA 2009 to nil. According to the court, this was a fair and reasonable outcome given that the Settlement Sum exceeded the compensation that the Commissioner had assessed to be payable by the Applicant.

Conclusion

These recent cases highlight the importance for employers to take their duties seriously to ensure the safety and health of their workers while at work. This includes ensuring that there are adequate safety measures and procedures for dealing with workplace accidents and emergencies.

Where a workplace accident does occur, employers should cooperate with the authorities and take active steps to rectify the breaches that resulted in the accident. The employer should also consider proactively giving compensation to workers who suffer workplace injury since this is not only taken into account under the WICA regime, but may also be recognised as a mitigating factor should the employer be prosecuted under the WHSA.

Author

Celeste Ang's practice encompasses corporate dispute resolution, compliance and investigations. She has significant experience acting for global clients in cross-border disputes and advising clients on compliance and regulatory issues in the context of cross-border investigations. She also has a specialist focus on a wide range of employment and employment-related issues, specialising on contentious or potentially contentious issues including termination of employment, dismissal, retrenchment, breach of fiduciary duties and enforcement of restrictive covenants and confidentiality obligations. Celeste has represented employers on employment and employment-related disputes in the Singapore courts as well as in arbitrations and mediations.

Author

Pradeep Nair is a Senior Associate in the Dispute Resolution group of Baker McKenzie's office in Singapore.

Author

Daryl Yang is Associate in the Dispute Resolution group of Baker McKenzie's office in Singapore.