Progress Software v CPF Board: Interpretation of 'Payable' under CPF Act
Progress Software Corp (S) Pte Ltd appealed to the Court of Appeal of Singapore against the Central Provident Fund Board's decision to classify their employees' variable commission component (VCC) as 'additional wages' instead of 'ordinary wages' under the Central Provident Fund Act. The Court of Appeal, comprising Yong Pung How CJ, Chao Hick Tin JA, and Judith Prakash J, dismissed the appeal on 2003-02-28, holding that while 'payable' does not equate to actual payment, the VCC could not be classified as 'ordinary wages' because it was not payable on a monthly basis and there was no obligation to pay it before the 14th of each month.
1. Case Overview
1.1 Court
Court of Appeal of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Court of Appeal held that 'payable' under the CPF Act does not equate to actual payment, but the VCC was still classified as 'additional' wages.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Progress Software Corp (S) Pte Ltd | Appellant | Corporation | Appeal Dismissed | Lost | Sarjit Singh Gill, Dylan Lee |
| Central Provident Fund Board | Respondent | Statutory Board | Appeal Dismissed | Won | Edmond Pereira, L R Penna |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Yong Pung How | Chief Justice | Yes |
| Chao Hick Tin | Justice of the Court of Appeal | No |
| Judith Prakash | Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Sarjit Singh Gill | Shook Lin & Bok |
| Dylan Lee | Shook Lin & Bok |
| Edmond Pereira | Edmond Pereira & Partners |
| L R Penna | Edmond Pereira & Partners |
4. Facts
- Progress Software was required to make CPF contributions for its employees.
- The amount payable depended on whether the wages were 'ordinary' or 'additional'.
- VCC was calculated monthly but paid at irregular intervals.
- Progress Software had the sole discretion to defer payment of the VCC.
- CPF Board initially classified the VCC as 'ordinary wages'.
- CPF Board later re-assessed the VCC as 'additional wages'.
- Progress Software paid the demanded amount under protest.
5. Formal Citations
- Progress Software Corp (S) Pte Ltd v Central Provident Fund Board, CA 104/2002, [2003] SGCA 6
6. Timeline
| Date | Event |
|---|---|
| Progress Software clarified with CPF Board on VCC classification. | |
| Progress Software wrote to CPF Board describing VCC as payable monthly. | |
| CPF Board conducted periodic checks on Progress Software's records. | |
| Progress Software wrote to CPF Board stating commission is usually paid out the following month. | |
| CPF Board reconfirmed that VCC should be considered 'ordinary wages'. | |
| CPF Board re-assessed VCC as 'additional wages' and demanded additional payment. | |
| Progress Software applied to the Court by way of Originating Summons. | |
| Court of Appeal dismissed the appeal. |
7. Legal Issues
- Interpretation of 'payable' under the Central Provident Fund Act
- Outcome: The court held that 'payable' cannot be equated to actual payment.
- Category: Substantive
- Sub-Issues:
- Definition of 'payable' as actual payment
- Whether 'payable' can be defined as a legal obligation to pay
- Related Cases:
- [1988] IRLR 238
- [1988] IRLR 444
- [1995] 1 SLR 115
- [1995] 2 SLR 201
- [1994] 2 SLR 154
- Classification of Variable Commission Component (VCC) as 'ordinary' or 'additional' wages
- Outcome: The court held that the VCC must be classified as 'additional' wages.
- Category: Substantive
- Sub-Issues:
- Whether the VCC was payable on a monthly basis
- Whether there was an obligation to pay the VCC before the 14th of each month
- Whether the deferment clause affected the classification of the VCC
- Costs
- Outcome: The court found no reason to vary the order as to costs in the court below.
- Category: Procedural
- Related Cases:
- [1994] 2 SLR 489
- [1998] 2 SLR 489
- [2000] 2 SLR 204
8. Remedies Sought
- Declaration
- Refund of Payment
9. Cause of Actions
- Declaration as to whether VCC should be considered 'ordinary' or 'additional' wages
- Refund of sums paid under protest
10. Practice Areas
- Civil Litigation
11. Industries
- Software
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Secretary of State for Employment v Crane | Employment Appeal Tribunal | Yes | [1988] IRLR 238 | England | Cited to show that courts in other jurisdictions have been unwilling to define 'payable' as actual payment. |
| Morton v The Chief Adjudication Officer | Court of Appeal | Yes | [1988] IRLR 444 | England | Cited to show that courts in other jurisdictions have been unwilling to define 'payable' as actual payment. |
| Central Christian Church v Chen Cheng | High Court | Yes | [1995] 1 SLR 115 | Singapore | Cited to state that English case law is of little assistance in the construction of a local statute. |
| Constitutional Reference No 1 of 1995 | NA | Yes | [1995] 2 SLR 201 | Singapore | Cited for upholding the principle of purposive interpretation. |
| Fay v PP | High Court | Yes | [1994] 2 SLR 154 | Singapore | Cited for the principle that 'Express enactment shuts the door to further implication'. |
| Kent Management Services Ltd v Butterfield | NA | Yes | [1992] ICR 272 | England | Cited by the appellants as being 'almost on all fours with the present case' but the court found that the deferment clause in question was significantly different. |
| Tullio v Maoro | Court | Yes | [1994] 2 SLR 489 | Singapore | Cited for the principle that the general rule that costs follow the event did not cease to apply simply because the successful party did not succeed in every issue or allegation. |
| Rajabali Jumabhoy & Ors v Ameerali R Jumabhoy & Ors (No 2) | NA | Yes | [1998] 2 SLR 489 | Singapore | Cited as an example where the court refused to award full costs to the ultimately successful party because the party had acted unreasonably in putting forward unmeritorious arguments. |
| Tan Tiang Hin Jerry v Singapore Medical Council | NA | Yes | [2000] 2 SLR 204 | Singapore | Cited as an example where the court refused to award full costs to the ultimately successful party because the party had acted unreasonably in putting forward unmeritorious arguments. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, Rule 5) Order 59 Rule 3(2) |
| Rules of Court Order 59 Rule 6A |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Central Provident Fund Act (Cap 36) | Singapore |
| Central Provident Fund Act (Cap 36, 2001 Rev Ed) s 58(e) | Singapore |
| Interpretation Act (Cap 1) s 9A(1) | Singapore |
| Interpretation Act (Cap 1) s 9A(2) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Payable
- Ordinary wages
- Additional wages
- Variable commission component
- Central Provident Fund Act
- Deferment clause
- CPF contributions
15.2 Keywords
- CPF
- Payable
- Ordinary Wages
- Additional Wages
- VCC
- Singapore
- Employment
- Commission
16. Subjects
- Central Provident Fund
- Statutory Interpretation
- Employment Law
17. Areas of Law
- Statutory Interpretation
- Civil Procedure
- Employment Law