Next of kin of Ramu Vanniyar Ravichandran v Fongsoon Enterprises (Pte) Ltd

[1] This appeal arises out of a fatal accident involving Ramu Vanniyar Ravichandran (“the deceased”). On 26 May 2005, about 2 pm, the deceased was found drowned in the sea near the PSA Pasir Panjang Terminal (“the Terminal”) with the respondent’s forklift which he was operating prior to the mishap. Subsequently, the Commissioner of Labour (“the Commissioner”) issued a Notice of Assessment of Compensation (“the Notice”) dated 18 July 2006, determining that the respondent was liable to pay compensation of $78,624.00 to the next-of-kin of the deceased, ie, the appellant. The respondent challenged this assessment, and the matter was set for a hearing before the Commissioner where the key issue was “whether the [deceased] was in the employment of the [respondent] and whether the accident happened out of and in the course of that employment” (Grounds of Decision of the Commissioner (“GD”) at [12]).

[2] After the inquiry, the Commissioner reached the following conclusion (GD at [11]; see also GD at [27]):

The Commissioner therefore held that the respondent was not liable to pay compensation to the appellant.

[3] In the result, the appellant filed the present appeal against the Commissioner’s decision pursuant to s 29 of the Workmen’s Compensation Act (Cap 354, 1998 Rev Ed) (“WCA”). The salient sub-sections of s 29 are as follows:

[4] At all material times, the deceased was holding a work permit to work for M/s Goldin Enterprises Pte Ltd (“Goldin”). Goldin was engaged in lashing works at the Terminal in December 2005. The deceased was employed to do the lashing work with Goldin and had a valid PSA pass from 20 December 2005 to 30 December 2005.

[5] While working at the Terminal, the deceased befriended the foreman of the respondent, Muhamed Yusuff Muhamed Meera (“Meera”). Meera testified that the deceased had approached him to find a part-time job to supplement his income. Consequently, Meera engaged the services of the deceased on four occasions to tighten the bolts and nuts to crane rails, including 26 December 2005, the fateful day of the fatal accident. On each of the first three occasions, the deceased was paid $100 out of Meera’s own money (on two occasions) or from petty cash given by the respondent to Meera (on one occasion).

[6] Given the facts, the Commissioner was of the view that whether there was an employer-employee relationship between the respondent and the deceased would turn on whether Meera had the authority to engage the services of the deceased on the respondent’s behalf (GD at [13]):

[7] He subsequently concluded that no such authority existed, and thus the deceased was never in the employment of the respondent (GD at [14]-[16]):

[8] The Commissioner also held that even if the deceased had been in the employment of the respondent, he was not authorised to handle the forklift. The Commissioner further held that the deceased went on a frolic of his own in using the forklift, given that the work the deceased was asked to do by Meera on the day of the accident did not involve the use of a forklift. The Commissioner thus concluded that even if an employer-employee relationship between the respondent and the deceased was established, the deceased’s death was not by an accident arising out of and in the course of that employment (GD at [20]-[26]).

[9] On appeal, the appellant raised a host of arguments, some of which overlap with one another. These arguments can be summarised into several main points which are as follows:

(a) the Commissioner erred in law in his application of agency principles and in concluding that there was no employer-employee relationship between the respondent and the deceased;

(b) the Commissioner failed to apply the presumptions under ss 3(4) and 3(6) of the WCA;

(c) the Commissioner failed to apply s 17(1) of the WCA; and

(d) the Commissioner erred in law in holding that the deceased’s death was not caused by an accident arising out of and in the course of the deceased’s employment with the respondent.

[10] The respondent argued that these arguments were, in the main, against the finding of fact by the Commissioner that the deceased was not an employee of the respondent. The respondent thus submitted that the requirement in s 29(2A) of the WCA that “a substantial question of law” must be involved in the appeal (see [3] above) was not satisfied. As shown above (see [7] above), the Commissioner had reached the conclusion that the deceased was not an employee of the respondent after considering the relevant agency principles. The thrust of the appellant’s arguments was that the Commissioner had arrived at this (wrong) conclusion by his erroneous application of the agency principles and his failure to consider and apply the presumptions provided by the relevant provisions of the WCA. In my opinion, these arguments certainly raise questions of law. Further, given that the application of the principles of agency law and the presumptions in WCA are likely to feature in most workmen’s compensation cases, these questions of law are, in my view, substantial. Accordingly, I find that the requirements in s 29(2A) of the WCA for an appeal against the Commissioner’s decision to be brought have been satisfied.

[11] Under the WCA, the liability of the respondent to pay compensation is premised on there being an employer-employee relationship between the respondent and the deceased (s 3(1) of the WCA). As rightly pointed out by the Commissioner (on the given facts), whether there is a relationship of employment would, in turn, depend on whether Meera had any authority to engage the deceased’s services on the respondent’s behalf.

[12] On the adduced evidence, it is clear that Meera had no express authority to hire other workers. The appellant, however, argued on appeal that Meera had implied or apparent/ostensible authority to do so.

[13] Generally, implied authority, as the term suggests, is authority not expressly stated, but, implied by the circumstances (Tan Cheng Han (gen ed), Walter Woon on Company Law (Sweet & Maxwell Asia, 3rd Ed, 2005) (“Walter”) at p 83). Such authority is usually expressed as the authority to do things incidental to the fulfilment of the tasks that one is expressly authorised to do (F M B Reynolds, Bowstead and Reynolds on Agency (Sweet & Maxwell, 18th Ed, 2006) (“Bowstead”) at para 3-018; Walter at p 83; Pole v Leask (1860) 28 Beav 562, (1863) 33 LJ Ch 155) or “usual authority”, ie, authority to do things that one in a certain position usually does (Bowstead at para 3-027; Walter at p 83; Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549). However, an agent’s implied authority may be restricted by express authority (Walter at p 83).

[14] In light of the circumstances of the present case, I am of the same view as the Commissioner that Meera had no implied authority to hire other workers on the respondent’s behalf. Meera’s own evidence is that he clearly had no authority to engage workers for the respondent. Thus, even if a foreman in Meera’s position had implied authority to hire workers on the basis of his position, such implied authority was restricted by his express authority to begin with. Even if there was no express authority which prevented Meera from hiring workers, the circumstances still did not justify a finding that Meera had implied authority to hire workers on the respondent’s behalf. Although Meera was the respondent’s foreman and was given petty cash (up to $500) by the respondent, this petty cash was only meant to purchase food and supplies and was never meant to pay the wages of workers. Further, Meera never informed the respondent that he had hired the deceased or other workers, and there is no evidence to suggest that the respondent had knowledge of such illegal hiring of workers and had acquiesced to such a practice (it was held in SPP Ltd v Chew Beng Gim [1993] 3 SLR 393 that a corporate agent may be given implied authority by the acquiescence of his superiors).

[15] However, it would appear that the appellant had made out a case of apparent authority. It should be noted that express and implied authority are commonly referred to collectively as actual authority (see Bowstead ([13] supra) at paras 3-001 and 3-003). But in addition to actual authority, it is possible to confer an agent with apparent authority. The latter authority has been described as follows (Bowstead ([13] supra) at para 8-013):

[16] Although Meera had no actual authority to engage workers on the respondent’s behalf, the respondent would be estopped from raising this fact as a defence to liability if the doctrine of apparent authority is successfully invoked (Walter ([13] supra) at p 88):

[17] Indeed, under the doctrine of apparent authority, a principal may be bound by the acts of an agent which he has not authorised and has even forbidden (Bowstead ([13] supra) at para 8-014). What is crucial is that there must have been a representation by words or conduct from the principal and that representation must have been relied on by the third party (Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 (“Freeman”); Walter ([13] supra) at p 89).

[18] In the present case, the evidence adduced showed that Meera was the foreman in charge of the respondent’s operations at the Terminal and, at most times, had free-rein in the running of these operations:

Cross-examination of Peter Seah [site supervisor for the respondent]:

[19] It appears that Meera was well-trusted and was given such a great deal of autonomy that he was able to negotiate directly with PSA for an extension of time for the respondent’s works at the Terminal:

[20] The fact that PSA was willing to deal with Meera directly and granted the respondent an extension after Meera had asked for one is evidence that Meera was regarded by others as the respondent’s representative who had overall control of the day to day running of the respondent’s works at the Terminal. The respondent by entrusting Meera with the daily operations and with such great autonomy can be said to have made a representation to others that Meera had the authority to make decisions in regard to the running of the respondent’s works at the Terminal (including the hire of extra-hands to complete the works), “by permitting the agent to act in some way in the conduct of the principal’s business with other persons” (Freeman (supra [17]) at p 503).

[21] This is probably the reason why the deceased had, in the first place, approached Meera to ask if he could help find him some part-time work as the deceased had perceived Meera to be someone who had the authority to hire workers on the respondent’s behalf. Meera had, indeed, found him work on four occasions, including the fateful day of the accident. There is also no evidence that the deceased knew or suspected that Meera was paying him using his own money or the petty cash given by his bosses that was for the purchase of food and supplies. In fact, Meera himself, although admitting that he had no (actual) authority to hire workers on the respondent’s behalf, thought he was able to claim back from the respondent the $300 he paid the deceased:

[22] In these circumstances, I am of the view that the respondent had by conduct represented that Meera had the authority to engage part-time workers for the respondent, and the deceased had relied on such representation and approached Meera for work and was, in fact, engaged to help out on the respondent’s works at the Terminal on no less than four occasions. The respondent is therefore estopped from denying that an employer-employee relationship existed between the respondent and the deceased on the ground that Meera had no actual authority to hire workers on the respondent’s behalf. I am thus of the view that the deceased was, in fact, an employee of the respondent.

[23] It follows then that the presumptions in ss 3(4) and 3(6) of the WCA will apply. The two provisions state as follows:

[24] Section 3(6) was not considered by the Commissioner below, though he did consider s 3(4) (GD at [23]):

[25] If it is accepted that Meera had apparent authority to hire workers on the respondent’s behalf, the respondent cannot deny then that the deceased was in fact its employee, and it would seem that the presumptions in ss 3(4) and 3(6) would apply. The burden would then be on the respondent to show that the deceased had used the forklift for his own purpose, and thus the accident was one that did not arise out of and in the course of the deceased’s employment with the respondent.

[26] As mentioned, the Commissioner below was of the view that even if there was an employment relationship between the respondent and the deceased, there was no evidence that the deceased had used the forklift for the purposes of or in connection with the respondent’s business (GD at [24]):

[27] There was, however, some evidence that the forklift was in fact required for the day’s work on 26 December 2005, ie, the day of the accident. Meera himself had testified that the deceased had approached him during the course of the fateful day to inform him that there was a need to shift a generator:

[28] Peter Seah’s evidence, which was relied on by the Commissioner (see [26] above), was also not unequivocal; although he had testified that the forklift was not needed on 26 December 2005, he had also contradicted himself:

Thus, it appears that Peter Seah himself has suggested that the work on 26 December 2005 could have entailed the use of the forklift.

[29] I am of the view that the evidence on the whole suggests that the deceased had used the forklift for some purpose that was in connection with the respondent’s work on 26 December 2005, although the evidence is unclear what exact purpose the forklift was used for. Henceforth, although the deceased was not authorised to use the forklift, and “was acting without instructions from his employer” when he used it, s 3(4) of the WCA would avail him, and the accident would still be deemed to have arisen in the course of his employment with the respondent. Hence, given the evidence adduced, I am of the view that the respondent has failed to rebut the presumptions in ss 3(4) and 3(6) that the accident had arisen out of and in the course of the deceased’s employment with the respondent.

[30] Given the conclusion above, there would strictly be no need to determine if s 17(1) of the WCA applies in this case. However, for the sake of discussion and completeness, this argument raised by the appellant would be dealt with briefly. Section 17(1) of the WCA provides as follows:

[31] The appellant’s argument based on s 17(1) is this — if Meera is to be regarded as the employer of the deceased (as remarked by the Commissioner (see GD at [19])), then Meera is the “contractor” of the respondent who is tasked to carry out the respondent’s works at the Terminal, and, accordingly, based on s 17(1), the respondent as “principal” was liable to pay compensation to the deceased.

[32] I think that the appellant’s argument is unfounded. It appears that s 17(1) is meant to apply only in instances where the principal had sub-contracted the works to an independent contractor (see Lee Keng Hiong t/a William Trade & Tran-Services v Ramlan bin Haron [2002] 2 SLR 52 at [28]-[29] where it was held that even if the appellant’s employee was an independent contractor, this would not have absolve the appellant from liability because of s 17(1) of WCA). It is undisputed in this case that Meera was, at all material times, the employee of the respondent and was not an independent contractor. As such, I find that s 17(1) has no application in this case.