When can HR be held personally liable?

As the person who is typically at the frontlines of the hiring, firing and mediating of complaints, HR may have to bear the brunt of decisions made against employees. HR personnel thus may run the risk of being held personally liable for cases of unfair treatment towards an employee or a potential candidate.

HRD spoke to leading lawyer Thomas Choo, partner at Clyde & Co to find out how HR can avoid situations which will hold them personally liable for any ‘unfair treatment’.

HRD: Have there been any cases in Singapore where HR professionals were held liable for “unfair treatment” in an organisation? When can HR be held personally liable for decisions made against an employee?
TC: Unlike in Australia or the USA, we are not aware of any such recent cases or examples in Singapore. However, HR professionals could be liable for summary dismissals, monetary losses suffered by the employer, or in extreme cases, criminal liability.

To better understand personal liability, we need to go back to the basics of employment principles. Firstly, the "principal-agent" relationship. This relationship depends on whether the HR professional has authority to act on behalf of his/her employer in certain circumstances.

In the event the HR professional goes beyond his/her authority, whether expressed, implied or apparent, it is possible for the HR professional to be personally liable. As per the "principal-agent" relationship, the personal liability can be much wider than just unfair decisions such as discriminatory hiring or unfair dismissals.

Secondly, it is implied under Singapore law that an employee owes his/her employer a duty of care. If a HR professional was merely following the orders of his/her immediate superior, it is less likely that there will be personal liability. Higher standards however may be demanded from those who are more senior (eg a group HR head).

HRD: How can HR professionals avoid being held personally liable in their career and manage any potential risks?
TC: HR professionals should always keep themselves abreast with the law and update the senior management as and when appropriate.

If there are any employer practices which raises concern, the HR professional should also advise senior management and the relevant line managers and notify them that personal or corporate liabilities may result if the situation remains unresolved.

Any implementation of employer policies and procedures should always be consistent, and HR professionals should try not to let emotions get in the way – it is often the case where the HR professional is being investigated that the result shows that emotions got the better of him/her.

The HR professional may also suggest his/her employer to take out employment practices liability insurance, and have that policy cover key employees (including the HR professional).