S’pore company sues engineer who quit after getting bonus, court orders him to give bonus back - Mothership.SG
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If you're considering quitting after receiving your supposedly hard earned bonus for the past year, think twice — or at least double-check your contract.
A man in Singapore resigned after receiving his bonus, but was ordered by a Magistrate's Court to return the money to his company.
He tendered his resignation on Mar. 25, 2022, and started to serve his contractual notice period of two months.
However, the company had already processed payment of his variable incentive two days earlier, on Mar. 23, and he received it in his bank account on Mar. 26.
Besides the S$7,200 cash he received, the company paid S$1,224 to his Central Provident Fund (CPF) account.
The company asked Sia to return the monies, but he refused.
It eventually sued him in court.
It explained that a clause in the company's "Employee Handbook" states:
He further argued that the clause did not allow the company to claw back the variable incentive it had already paid out.
However, the company refuted this by stating that another clause in his contract read:
The judge explained that Sia was not "blindsided" by the company as he knew about the existence of the handbook and that he admitted in the trial that a human resource staff had explained the clause to him when he signed the contract.
When Sia was confirmed as a permanent employee, he received an email informing him that he was "eligible for the benefits indicated in the prevailing Employee Handbook".
He also argued that it "did not occur to him" that the handbook would spell out terms on bonuses, as his contract already stated that there were two bonuses to be paid out, one in December and the other in March.
The judge disagreed and explained:
The judge pointed to another clause which stated that employees had to serve a "service retention period" of at least one month, depending on the amount of bonus they received.
The clause states:
The judge explained that even though the company had overlooked the clause in their claim, the main argument would be the same — that Sia had quit on the same month he received the bonus.
Based on this understanding, Sia could have kept his bonus had he stayed employed in the company a few more weeks.
The company then rebutted that it had emailed employees to notify them of the changes.
It also argued that the bonus was "discretionary in nature"; therefore, it was up to the company to decide how it's paid out.
The company's HR consultant testified that Sia was deemed eligible for the bonus when it was processed, but later on was no longer eligible to receive or retain it.
The judge agreed that the new clause is enforceable and entitles the company to a "clawback payment".
He allowed the company's claim but stated that in a future hearing to decide on legal fees, he would consider that the company had initially based their claim on the wrong clause.
Top image via Google Maps
mothership.sg
A man in Singapore resigned after receiving his bonus, but was ordered by a Magistrate's Court to return the money to his company.
Received bonus day after resigning
According to a judgment published on Apr. 19, 2023, Quantum Technologies Global Pte Ltd employed Sia Chien Kian as a Quality Systems Engineer on Dec. 21, 2020, with a starting salary of S$4,500.He tendered his resignation on Mar. 25, 2022, and started to serve his contractual notice period of two months.
However, the company had already processed payment of his variable incentive two days earlier, on Mar. 23, and he received it in his bank account on Mar. 26.
Besides the S$7,200 cash he received, the company paid S$1,224 to his Central Provident Fund (CPF) account.
The company asked Sia to return the monies, but he refused.
It eventually sued him in court.
"Employee Handbook"
During the trial, the company claimed that Sia was not eligible for the variable incentive and had made the payment because he only tendered his resignation after the payment was being processed, and it was too late to reverse the transaction.It explained that a clause in the company's "Employee Handbook" states:
Engineer said clause not in employment contract
Sia denied the claims and stated that he was unaware of the clause as it was not stated in his employment contract.He further argued that the clause did not allow the company to claw back the variable incentive it had already paid out.
However, the company refuted this by stating that another clause in his contract read:
Judge said engineer knew handbook exists and not "blindsided"
Explaining his decision, the district judge said he agreed with the company that the employee handbook was part of the contract.The judge explained that Sia was not "blindsided" by the company as he knew about the existence of the handbook and that he admitted in the trial that a human resource staff had explained the clause to him when he signed the contract.
When Sia was confirmed as a permanent employee, he received an email informing him that he was "eligible for the benefits indicated in the prevailing Employee Handbook".
Handbook also spelt out other benefits
Sia had also claimed that only certain parts of the handbook applied to him.He also argued that it "did not occur to him" that the handbook would spell out terms on bonuses, as his contract already stated that there were two bonuses to be paid out, one in December and the other in March.
The judge disagreed and explained:
"Service Retention Period" clause
However, the judge felt that the company had claimed against Sia using the wrong clause in the contract, as it did not expressly entitle it to a "clawback payment".The judge pointed to another clause which stated that employees had to serve a "service retention period" of at least one month, depending on the amount of bonus they received.
The clause states:
He then directed the company to amend its pleadings and allowed Sia to amend his defence.
The judge explained that even though the company had overlooked the clause in their claim, the main argument would be the same — that Sia had quit on the same month he received the bonus.
Based on this understanding, Sia could have kept his bonus had he stayed employed in the company a few more weeks.
Engineer claimed he didn't know handbook changed
After the amendments, during the second stage of the trial, Sia argued that the "Service Retention Period" clause was only introduced to the Handbook on Feb. 11, 2022, and that he never acknowledged or agreed to it.The company then rebutted that it had emailed employees to notify them of the changes.
It also argued that the bonus was "discretionary in nature"; therefore, it was up to the company to decide how it's paid out.
The company's HR consultant testified that Sia was deemed eligible for the bonus when it was processed, but later on was no longer eligible to receive or retain it.
The judge agreed that the new clause is enforceable and entitles the company to a "clawback payment".
He allowed the company's claim but stated that in a future hearing to decide on legal fees, he would consider that the company had initially based their claim on the wrong clause.
Top image via Google Maps
