High Court rules on government grants in profit calculations while upholding termination
Singapore's High Court recently dealt with a profit-sharing dispute between an employer and its former director. The case highlighted the contentious interpretation of profit-sharing arrangements in employment contracts and the inclusion of government grants in such calculations.
The worker claimed entitlement to a share of various government grants under their profit-sharing agreement, arguing these grants should offset operational costs when calculating divisional profits. They also contested their summary dismissal, maintaining it was unjustified and potentially orchestrated to avoid paying what was owed.
The employer, meanwhile, not only denied owing additional payments but sought to recover sums already paid, claiming these payments were made by mistake and never should have been included in the profit calculations. This created a standoff about contractual interpretation with significant financial implications for both parties.
The worker was employed as the business development/operations director of a security services company from April 2015 until March 2021, when he was summarily dismissed. He ran the company's "Events" security business under a profit-sharing arrangement detailed in an Addendum to his Letter of Appointment.
According to this Addendum, gross operational profit would be split 65% to the employer and 35% to the...
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