Singapore Court Rules Negligent Employees Can Be Personally Liable for Employers' Financial Losses and Finds Fabricating Documents to Conceal a Breach Constitutes Fraud

This is Part 3 of a three-part client alert series examining recent Singapore employment law decisions of practical relevance to employers and in-house HR/legal teams. 

This part focuses on an employer’s successful claim against an employee for breach of her contractual duties, specifically, failure to perform assigned tasks and the fraudulent fabrication of documents to conceal that failure.

Background

The defendant was employed by Stamford Land Management Pte Ltd as an accountant. Her employment contract comprised an offer of employment letter and an employee handbook. There was also a separate job description that she relied on but which was held not to form part of the contract, as it was never referenced, signed, or intended by either party to be binding.

Under the employee handbook, the defendant was expressly obliged to obey lawful and reasonable instructions. In March 2023, she was instructed to take over accounting duties from a departing colleague, including placing a substantial sum of money (the Sum) on fixed deposit (FD), and she initially complied. 

However, between December 2023 and May 2024 (around five months), she failed to place the Sum on FD. She also fabricated documents to conceal that failure. The matter was discovered in May 2024.

The employer sought S$119,490.14, representing lost interest income that the employee was supposed to obtain from the FD. 

Outcome: The defendant was ordered to pay the full amount claimed, plus costs and disbursements.

Court’s key findings

1. Contractual duty of obedience

The defendant’s duty to obey lawful and reasonable instructions arose from the employee handbook. Further, the court found that, by initially placing the Sum on FD, she had accepted this instruction as lawful and reasonable and acted on it; therefore, she could not later disclaim responsibility.

2. Job descriptions are not automatically part of the employment contract

A job description does not automatically form part of the employment contract unless it is referenced in the contract or signed or accepted by the employee, or there is other clear evidence that both parties intended it to be binding, none of which was present here.

3. Measure of damages for employee’s breach of duties

The defendant breached her contract by failing to place the Sum on FD despite knowing it was her duty, and the court found she had fabricated documents to conceal that failure. As a result of the breach, the employer was entitled to be put in the position it would have been in had the contract been performed. Damages were calculated at the FD interest rate of 3.42% per annum over the five-month period, yielding S$119,490.14

Conclusion

This decision confirms that employees face real personal financial liability for breaches of contractual duties, including through inaction and document fabrication, and that employers can recover their full losses without needing to prove negligence in tort. To that end, employers should:

• Ensure job descriptions intended to have contractual force are expressly referenced in (or appended to) the employment contract and signed by the employee.
• Document material changes in an employee’s responsibilities, as lawful instructions from supervisors create binding contractual duties even where the job description does not cover them.
• Implement segregation of duties, independent verification processes, and regular reconciliation checks, particularly for financial functions, to detect breaches early.
• Ensure misconduct investigation procedures are capable of detecting document fraud, as employees who fabricate documents to conceal failures face personal liability for the employer’s full losses.

This concludes our three-part series on recent Singapore employment law developments. For earlier instalments, please refer to Part 1 (notice periods and salary in lieu) and Part 2 (probation management and dismissal). Should you require further guidance on any of the matters discussed in this series, please do not hesitate to contact the authors listed below.

Client Alert 2026-174