18 June 2021
The recent Singapore High Court decision in Dong Wei v. Shell Eastern Trading (Pte) Ltd [2021] SGHC 123 sets out useful guidance for employers when carrying out internal employee investigations. The case deals with the fairly novel issue of the extent of an employer’s duties towards an employee who was the subject of an internal investigation under the portmanteau obligation of mutual trust and confidence.
Mr. Dong, a former Shell trader, had commenced the claim against Shell alleging (among other things) that the internal investigation which he had been subject to prior to the termination of his employment had been conducted in an extremely flawed manner. The gist of Mr. Dong’s complaint was that the investigation had been pre-judged, that he had not been given a fair opportunity to respond to the allegations against him and that the investigations had been unnecessarily prolonged. The Court found on the evidence that none of these complaints were made out as a matter of fact and observed on several occasions that the Shell investigators had provided sensible explanations for their thought process and had diligently and independently conducted their fact-finding process.
The Court also took the opportunity to lay down what the law expected of employers in the context of conducting internal employee investigations:
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First, there would only be a breach of the implied term of mutual trust and confidence in respect of employee investigations and suspensions where the employer’s conduct fell below “the minimum standard of fairness”;
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This “minimum standard of fairness” meant that the investigations should not amount to a “hatchet job”, such that the outcome was pre-ordained against the employee;
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The allegations put to the employee must also be sufficiently clear such that he understands the case that is made against him and has an opportunity to clarify his position;
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Suspension of employees should only be carried out on the basis of clear and credible sources of information – suspending an employee as a “knee-jerk reaction” to an unclear or unspecific allegation may fall below the minimum standard of fairness required;
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The implied term of mutual trust and confidence was not so broad as to import all obligations of natural justice or due process obligations that would apply in other contexts.
Besides a clarification on the scope of employer’s duties in the context of employee investigations, and even though the Court recognised that employers have latitude to conduct their own internal investigations, it is clear from Justice Aedit Abdullah’s thorough written judgment that the Court will not shy away from scrutinising all steps taken in an employer’s investigation procedure, the methodology applied, the contents of the investigation report, as well as relevant internal correspondence when such complaints are brought to the fore.
Our Singapore employment team comprising Goh Seow Hui and David Lee successfully represented Shell in this case.
For further information, please contact:
Goh Seow Hui, Partner, Bird & Bird
seowhui.goh@twobirds.com
