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Tutorial 4 – Terms and Conditions in Employment Contracts

Question 1

Rick received his letter offer, a handbook when report for duty as at Syarikat Maju Jaya Sdn Bhd. His
letter of appointment is silent on overtime pay. Nevertheless, provisions on overtime pay are
mentioned in the handbook. Rick wants to know whether he is entitled to overtime pay based on the
handbook. Advise Rick.

QUESTION 2

With reference to decided cases, discuss whether an employee who is paid a fixed salary can make a
complaint against his employer who does not provide any work for him to do.

QUESTION 3

Lina is a secretary with Syarikat FGH Sdn Bhd. She was instructed by her boss, Mr David to keep
some of the confidential documents. Lina decided to read the documents and found that it contained
the company’s R & D plan for 2020 to 2025 including the production of a few new products. Lina was
excited and decided to mention this in her blog. Mr Ian, the GM of Syarikat Tiru Saja Sdn Bhd saw
the posting and contacted Lina. He offered Lina a job with his company with a higher pay if Lina
gives him the said documents. The offer was impossible to resist. Lina make copies of the documents,
resigned from Syarikat FGH Sdn Bhd and joined Syarikat Tiru Saja Sdn Bhd.

Based on the facts above, discuss whether Lina had breached any of the terms in her contract of
employment with Syarikat FGH Sdn Bhd. If yes, what are the remedies available for Syarikat FGH
Sdn Bhd against Lina and Syarikat Tiru Saja Sdn Bhd.
Introduction

 Before we dive into the questions, let’s discuss about what is contract of employment

 Contract of employment is signed agreement between an employee and an employer. It


establishes both the rights and responsibilities of the two parties which are the worker and the
company or in other words employer and employee .

 There are several important things which are included in an employment contract such as salary
or wages, schedule, duration of employment, general responsibilities, confidentiality,
communications, benefits and future competition.

 Other possible terms will also be include such as an ownership agreement (stating that the
employer owns any work-related materials produced by the employee), information on solving
disputes at work, or qualifications on where the employee can work after leaving the company
(this is a way to limit competition between related companies)

 A written contract is a great way to clearly define the job, your responsibilities, and your benefits.
It prevents any confusion about the job

 It should be noted that any term or conditions in the contract must comply with the existing laws
or statute such as our very own Employment Act 1955

What is “conditions”?

 Conditions are matters which wont lead to breach of contract if the either parties didn’t comply
and it is merely matters that unilaterally imposed by the employer to the employee.

 For instance, in the situation where the employer’s norm is to give wages via bank accounts but
one of the employee hesitate to open bank account. In that case, such action will not lead to
breach of conditions from the side employee and the employer still has the obligation to give the
salary perhaps via cash

What is “terms”?

 Unlike conditions, not complying with terms in contract of employment will lead to breach of
contract

 Terms are matters which are agreed by both employer and employee. Terms cannot be changed
by any party without the consent of another

 Terms can be divided into two which are implied term and express term

 'Express' terms – Terms that are expressly or specifically stated, either orally (at the initial
interview, say) or in writing. Express terms include things like pay, hours and holidays
 ' Implied ' terms- Terms which are not expressly or explicitly stated because, in the main, they
are fairly obvious to both parties to the contract of employment. Implied terms include statutory
rights such as the right to equal pay and duties,duty of care and duty of mutual trust and
confidence

Question 1

Issue: Whether Rick is entitled to overtime pay despite his letter of appointment is silent on overtime
pay

Laws:

General rule: Employees are entitled to overtime wage even if the employment contract is silent or
contrary to the payment of overtime wages

-S.60 (3) (b)= Overtime is defined in this section. Overtime means the number of hours of work
carried out in excess of the normal hours of work per day.

- The normal working hours is not more than 8 hours per day and the working hours must not be more
than 104 hours per month

- s.60 (3) (a) = For any overtime work carried out in excess of the normal house of work, the
employee shall be paid at rate not less than one and half times his hourly rate of pay irrespective of
the basis on which his rate of pay is fixed

- s.60 (8) = Payment for overtime is not applicable to employees engaged in work which by its nature
involves long hours of inactive or stand-by employment

Case:

1) TARASINGH v CHAIRMAN, SAILORS' INSTITUTE COMMITTEE, SINGAPORE [1959] 1


MLJ 1

Case Summary:

The appellant, a swimming pool mechanic attendant, employed by the


respondent in that capacity, on August 6, 1957 submitted a claim to the Asst.
Commissioner for Labour for Sunday pay, statutory holidays pay, and overtime
pay, covering a period of 20 months from December 1, 1955 to July 31, 1957.
The Asst. Commissioner allowed the claim at ordinary rates of pay for Sunday
and statutory holidays but disallowed the claim for overtime pay. The question
whether the appellant was entitled to be paid overtime depended upon
whether he was excluded from the statutory provisions which entitle a
workman to overtime by reason of section 43(7) (same with s.60(8) of
Employment Act 1955) of the Labour Ordinance which reads: "The provisions
of this section shall not apply to workmen engaged… in work which by its
nature involves long and regular hours of inactive or stand-by employment."
Held:
The evidence in this case showed that the appellant's work,being a pool
mechanic attendant, involved long and regular hours of inactive employment,
therefore he was not entitled to the benefit of overtime provisions contained
in section 43 of the Labour Ordinance

2) ENG GIAP PUBLIC MOTOR BUS CO LTD v GAN ENG KENG & 36 ORS [1975]
1 MLJ 106

Case summary:
The respondents had been employed by the appellants as bus drivers and
conductors. They had to work approximately twelve hours a day and their
wages were originally inclusive of overtime work. The respondents claimed
overtime wages for the average of 60 hours a month, to which they claimed
they were entitled after the coming into force of section 60A(3) of the
Employment Ordinance, 1955 on the October 9, 1969. The appellants had
continued to pay the same wages to the respondents after the coming into
force of that law. The Labour Officer who conducted the inquiry under section
70 of the Employment Ordinance, made an order that the appellants pay
overtime wages for 4 hours a day. On appeal to the High Court, the High Court
dismissed the appeal and confirmed the order of the Labour Officer but
ordered that the amount of overtime for the first eight days of October 1969
be deducted, as the new law did not come into effect till October 9, 1969. The
appellants appealed to the Federal Court.

Held:
(1) as there was no dispute as to the number of hours for which the
respondents worked and as there was no written contract of service,
whatever overtime work the respondents did was clearly done at the request
of the appellants and they were, therefore, entitled to overtime wages; (2) in
this case, the learned judge should have considered the provisions of s 60A(8)
of the Employment Ordinance 1955. In the light of that provision, as each of
the respondents had at least two hours of inactive or standby employment in
relation to the four hours of overtime work, such rest periods must be treated
as long hours of inactive employment; (3) the respondents were, therefore,
entitled to wages for two hours of overtime work per day.

Conclusion:
Whether Rick is entitled to overtime wage depends mainly on the nature of his
work which shouldn’t fit in the description of s.60(8) of Employment Act 1955.
If his nature of work doesn’t fit in the description of s.60(8) of Employment Act
1955 then he would be entitled for overtime wage if he carried out work in
excess of normal working hours according to s.60(3) (a) of Employment Act
1955.

Question 2

Issue: Whether an employee who is paid a fixed salary can make a complaint against his employer
who does not provide any work for him to do

Cases:
1) Collier v Sunday Referee Publishing Co. [1940] 2 KB 647

Ratio: The plaintiff was a chief sub-editor with the defendant. He sought the
right to work and be paid for working.
Held: The employee had the right to work. Asquith J discussed a former
employee’s right to earn a living: ‘It is true that a contract of employment does
not necessarily, or perhaps normally, oblige the master to provide the servant
with work. Provided I pay my cook her wages regularly she cannot complain if
I choose to take any or all of my meals out. In some exceptional cases there is
an obligation to provide work. For instance, where the servant is remunerated
by commission, or where (as in the case of an actor or singer) the servant
bargains for publicity

2) Turner v Sawdon [1901] 2 KB 653

Case summary: The plaintiffs, a commercial traveller and a salesman


respectively who were retained for a fixed period and remunerated by salary
sought the right for work.

Held: It was held in this case to have no legal complaint so long as the salary
continued to be paid. It was established in this case that general rule that the
obligation to pay wages does not extend to an obligation to provide
work.However, there are three exceptions to this general rule which are (1)
Employee paid on a commission basis; (2) Employee paid on piece-rated
(employee will not get paid if the work is not provided for them) work and (3)
Employee in the performing arts industry where the publicity involved
may be as important as the remuneration

3) Langston v Amalgamated Union of Engineering Works [1973] EWCA Civ 773


Case summary: When the employee worked on night shifts or worked
overtime,he was paid his basic wage plus premium payments. His employers
suspended him without pay, and thus took away his opportunity to earn the
premium payments.

Held: Court held an employer, when employing a skilled man, is bound to


provide him with work, when the work is available and he is ready and willing
to do it. This is because a skilled man takes pride in his work, he does not do
it merely for money, but he needs to use his skill to improve it or to maintain
it.

Conclusion:
There are divided opinion between different cases regarding whether an employee
who is paid a fixed salary can make a complaint against his employer who does not provide any work
for him to do. We personally feel that employees should have the right to work since they can only
increase their experience and skills by working thus it is essential for the employers to provide the
employees with work. It is a must for the employee to get work if his nature of his work demands the
payment of commission or he is paid on piece-rated work or he is artist who receive remuneration for
publicity as well.