SINGAPORE: A district court has awarded the former head of finance of an accounting firm around S$122,000 (US$91,700) in damages, after ruling that her employment was terminated because she was pregnant.
Ms Navinea Kanapathy Pillai was also the sole director at Longitude 101 when she was let go. The company subsequently sued her for misappropriating S$100,500 and breaching her employment contract by failing to return some items.
Ms Pillai then filed a counterclaim against the firm and its sole shareholder, Swiss national Thomas Haeusler, for wrongful dismissal.
In a written judgment dated Mar 1 and released over the weekend, District Judge Samuel Wee rejected Longitude’s claim, saying the company did not show sufficient cause for Ms Pillai’s termination.
The judge ruled in her favour and dismissed the allegations of misappropriation, instead finding that the money withdrawn by Ms Pillai were dividends and shareholder payments paid to Mr Haeusler.
JOINED IN 2019
Longitude is part of boutique consulting firm Latitude 1.1 Group, which was set up by Mr Haeusler in 2012. It provided accounting services to Latitude’s clients.
Ms Pillai was initially employed by Latitude sometime in 2019, when another man was its sole director.
In September that year, Longitude was incorporated with Ms Pillai named as its sole director. Mr Haeusler was behind this decision.
Mr Haeusler, who became a Singapore permanent resident in 2009, was disqualified from acting as a director under the Companies Act for five years from June 2017. This was because three companies of which he was a director had been struck off within the previous five years, which automatically triggers the disqualification.
He advised high-net-worth individuals, family officers and multinational corporations on setting up structures to hold investments and assets, according to a High Court judgment.
TERMINATION WITH SALARY IN LIEU OF NOTICE
When the COVID-19 pandemic struck in early 2020, Ms Pillai began working from home. Longitude provided her with furniture, stationery, computer equipment and documents to facilitate this.
Around Dec 15, 2020, she told Mr Haeusler that she was pregnant.
Between Jan 15 and Mar 18 of the following year, she withdrew sums amounting to S$100,500 from Longitude’s bank account. Longitude later accused her of misappropriating this.
The company then issued her a notice of termination on Apr 27, 2021. She was its only remaining employee at that point.
The dismissal took effect that same day, with Longitude offering to pay her three months’ salary — S$43,500 — in lieu of notice as well as an additional bonus of S$15,000. These sums have yet to be paid to Ms Pillai.
Aside from the reference to the termination with notice clause in Ms Pillai’s employment contract, no reasons were given for the termination.
Longitude also asked that she return some items in compliance with a handover clause in her contract. These included what the company had provided her for work-from-home purposes.
In the termination letter, the company further asked that she propose a time and place for her to meet its representative, who would collect the returnable items and provide her with a cheque for S$58,500. Longitude referred to the fact that she was working from home and “expecting”.
Longitude then sued Ms Pillai. It sought a return of the items, damages arising out of her alleged failure to return them, and payment of S$100,500.
Ms Pillai counterclaimed for damages over her dismissal, asserting that it was due to her pregnancy.
NEGATIVE REACTION TO PREGNANCY
In his judgment, District Judge Wee rejected Mr Haeusler’s argument that he was not acting as a director of Longitude.
The judge found that he was a de facto director who played an active and dominant role in the company’s decisions, such as signing Ms Pillai’s contract. He was referred to as the “boss” of Longitude.
The judge also noted Mr Haeusler’s negative reaction when he first found out about Ms Pillai’s pregnancy.
Based on Ms Pillai’s testimony, Mr Haeusler had told her it was not good to have a baby in Singapore, and suggested that she get an abortion. She also claimed he made life difficult for her.
During the trial, Mr Haeusler conceded that Ms Pillai’s termination was not due to performance-related reasons. District Judge Wee did not accept Mr Haeusler’s argument that tension between Ms Pillai and himself led to his decision to fire her.
The judge found that Longitude and Mr Haeusler did not show any reasons that amounted to sufficient cause for terminating Ms Pillai’s employment. In fact, they chose not to specify the reasons despite being invited by the court to do so.
The judge also found that they conspired by unlawful means to cause damage to Ms Pillai.
District Judge Wee briefly addressed Ms Pillai’s argument that her employment was terminated partly due to Mr Haeusler’s allegedly harassing behaviour.
The judge said he did not need to decide whether there was sexual harassment involved, since he had ruled that Ms Pillai was dismissed because of her pregnancy.
Nevertheless, the judge noted some “inappropriate and unacceptable” conduct on Mr Haeusler’s part. He had sent two topless selfies to Ms Pillai when he was serving his COVID-19 quarantine in a hotel room, in response to her asking about his swab test results.
When cross-examined during the trial, Mr Haeusler accepted it was not normal for a shareholder to send such photographs to a director in “big companies”, but that such an act was appropriate in the context of a smaller company like Longitude.
District Judge Wee said he found this argument “peculiar”.
ALLEGATIONS OF MISAPPROPRIATION
Longitude also argued that Ms Pillai had withdrawn S$100,500 in cash from Longitude’s bank accounts with no basis and kept the money. They claimed they only found this out after terminating her employment.
The judge instead found that Ms Pillai paid Mr Haeusler S$97,000 in dividends because he was the sole shareholder, and a further S$3,500 from a shareholder distribution that he requested.
This was supported by ATM transaction records that were acknowledged and signed by Mr Haeusler.
While Longitude and Mr Haeusler sought to dispute the authenticity of these records the day before the trial began, the judge dismissed this. He added that they had taken “inconsistent positions” as to why they objected to the authenticity.
Initially, they said Mr Haeusler’s signature was forged by ink signing and needed to be analysed by the Health Sciences Authority of Singapore, before conceding that the signature belonged to Mr Haeusler but that it seemed to be a “cut and paste” job. They repeated their initial position in their submissions at the end of the trial.
In terms of the items to be returned to Longitude, District Judge Wee found that it failed to prove it had suffered any quantifiable loss because of Ms Pillai’s breach of the handover clause.
Ms Pillai had indeed held onto some returnable items, such as a computer, cheque books and photocopied documents. But the judge said that Longitude’s position on the issue of loss was “unclear” and there was a lack of evidence on that front.
District Judge Wee also found that Longitude did not prove Ms Pillai had breached the confidentiality clause in her contract. The clause did not specify what constituted confidential information, and there was no evidence she had failed to surrender any such information.
Ms Pillai was awarded S$122,123.93 in damages, plus interest at a rate of 5.33 per cent per annum from the date of termination to the date of judgment.
This comprised her bonus, salary in lieu of notice, encashment of balance leave, employer’s Central Provident Fund contribution, and eight weeks of maternity benefit as her child is not a Singapore citizen.
Ms Pillai was represented by Mr Kishan Pratap and Ms Jasmine Yan from Kishan Law Chambers, while Longitude and Mr Haeusler were represented by Mr Adrian Tan from August Law Corporation.