OVERTIME PAY FOR EXCEEDING 72 HOURS A MONTH UNDER THE EMPLOYMENT ACT

Hossain Rakib v Ideal Design & Build Pte Ltd [2023] SGHC 166 was an appeal concerning a claim for overtime pay for over 700 hours of overtime work under the Employment Act 1968 (2020 Rev Ed) (“EA”). Goh Yihan JC allowed the appeal and found that s 38(5) of the EA was intended to protect employees, and not to prevent them from claiming overtime pay beyond 72 hours per month.

Section 38(5) of the EA. Section 38(5) of the EA provides that (at [23]):

“(5)  An employee must not be permitted to work overtime for more than 72 hours a month.”

So, when the appellant performed work as required by the respondent, which included overtime hours (at [6]) beyond 72 hours a month, did s 38(5) of the EA prohibit the appellant’s claim for overtime pay (at [19])?

Per Goh JC, this was essentially a question of statutory interpretation (at [19]).

While “the [learned Tribunal Magistrate (“the Judge”)] interpreted s 38(5) as imposing a maximum cap of 72 hours that an employee may claim as overtime pay per month (“the Overtime Cap”)” (at [7]) and disallowed the claim, Goh JC reversed the decision on appeal (at [3]).

 

First stage. Applying the three-step framework in Tan Cheng Bock v Attorney-General [2017] 2 SLR 850 (“Tan Cheng Bock”) which sets out the principles of statutory interpretation, Goh JC found that there were two possible interpretations of s 38(5) of the EA (at [20] – [34]). See [25] where Goh JC summarised the parties’ positions:

“25 In this regard, the appellant admits that there are two possible interpretations of s 38(5), namely, the Judge’s interpretation and his (the appellant’s) interpretation. For convenience, I summarise these two interpretations as follows:

(a) The Judge’s interpretation: s 38(5) is an absolute bar to an employee claiming more than 72 hours of overtime pay per month (ie, the Overtime Cap).

(b) The appellant’s interpretation: s 38(5) prevents an employer from requiring, requesting, or even allowing their employee to carry out overtime work for more than 72 hours per month. However, s 38(5) does not contain any statutory prohibition or restriction to bar or otherwise prevent an employee from claiming for overtime pay performed beyond 72 hours a month, if the employee was required or compelled by the employer to perform such overtime work.

Beyond understandably submitting that the Judge’s interpretation is correct, the respondent does not dispute the existence of these two possible interpretations.”

 

Second and third stages. Having two possible interpretations under the first stage, Goh JC then went on to assess which interpretation was better aligned with the legislative purpose of the Employment Act under the second and third stages of the Tan Cheng Bock framework, which Goh JC said that, in practice, will often merge (at [34] – [35]).

New statutory purpose of s 38(5). Goh JC agreed with the appellant “that the original purpose of s 38(5) when it was enacted in 1968 has been superseded by a new purpose in light of the … amendments” to s 38(5) in 1972 and to s 35 of the EA (which prescribed the scope of application of Part 4 in which s 38(5) resides) in 2013 and 2018 (at [41] – [42]).

This was relevant because Goh JC found that the Judge’s interpretation was “premised on the legislative purpose behind s 38(5) in 1968”, which did not take into account subsequent legislative amendments (at [54]).

Goh JC found that the general purpose of Part 4 of the EA (at [46] – [49]) and the specific purpose of s 38(5) of the EA (at [50] – [56]) were to protect employees.

General purpose of Part 4. Because the main purpose of Part 4 was to protect employees and not employers, Goh JC found that it would be inconsistent if s 38(5) allowed an employer to require an employee to work overtime outside the statutory limits without having to pay the employee (at [48]). Goh JC also considered the “very practical power imbalance between the employer and the class of vulnerable employees who are protected by Part 4 of the EA.” (at [49]). See Goh JC’s reasoning at [49]:

“49 In as much as the Judge suggests that the employee should also be responsible for knowingly breaching the Overtime Cap by forgoing the affected overtime pay (see the Judgment at [54]–[55]), I respectfully disagree. This is because, as stated earlier, Part 4 of the EA is intended to “[provide] additional employment protection and benefits for the more vulnerable employees who are engaged in manual labour or are paid lower wages” [emphasis added] (see 2008 Parliamentary Statement). As such, and with respect, the Judge’s view overlooks the very practical power imbalance between the employer and the class of vulnerable employees who are protected by Part 4 of the EA. It would not be realistic for an employee like the appellant, who has travelled all the way from Bangladesh to find manual work in Singapore, to be in a position to reject work required of him by his employer, the respondent. It would be patently unfair and unreflective of the legislative purpose of Part 4 of the EA if the employee who has, in effect, been compelled to work beyond the Overtime Cap is then told that he or she cannot claim the overtime pay concerned. This cannot be right.”

(emphasis in original)

Specific purpose of s 38(5). As for s 38(5), Goh JC found that the legislative purpose had changed since it was first introduced in 1968, to now afford protection for employees against onerous overtime work hours (at [50] – [54]).

“52 Nevertheless, to be fair to the Judge, he is correct that the legislative purpose behind s 38(5) might have been different in the past. As I alluded to above at [41], the primary purpose of s 38(5) when it was first introduced in 1968 was not to protect an employee from working too much overtime, but to regulate and limit the amount of extra work that a worker could do in order to generate employment for more people in Singapore. …

53 Be that as it may, the specific purpose of s 38(5) changed when Parliament later amended s 38(5) to increase the permitted number of overtime hours from 48 to 72 … in the light of the change in employment situation in Singapore, the purpose behind s 38(5) was no longer to spread out employment opportunities. Instead, the purpose shifted to protecting employees from onerous overtime hours …”

S 38(5) does not prohibit overtime pay. Goh JC concluded that, at least where the employee was required by the employer to perform such overtime work beyond the statutory limits, s 38(5) did not prohibit such overtime pay because “the protection afforded to employees by s 38(5) must extend to the consequences of exceeding the Overtime Cap.” (at [55] – [56]; emphasis in original).

 

Significance. This decision serves as a reminder on how the principles of statutory interpretation are applied. In essence, if a provision offers different possible interpretations, one will need to take into account the general purpose of the act and the specific purpose of the provision, and bear in mind that subsequent statutory amendments may disclose a change in the legislative intent over time.  

 

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Xian Ying Tan