SINGAPORE – Senior management at a software company wanted to remove the head of a sales team from his role after he sent aggressive e-mails attacking another team leader and refused to apologise to her.
But SAP Asia decided to place Mr Prashant Mudgal on a 45-day performance improvement plan (PIP) before terminating his employment in 2019.
This decision was described as a “farce” by a High Court judge, who said the company had prejudged him and did not give him a genuine opportunity to improve.
Mr Mudgal, a foreign national, sued his former employer for nearly $5 million in loss of earnings from 2020 until May 31, 2025.
On Jan 21, Justice Dedar Singh Gill awarded him $1,000 in nominal damages, rejecting his contention that the company’s conduct caused him to suffer “crippling” financial losses.
In his written judgment, he recognised the implied term of mutual trust and confidence.
It is a rule in English common law that requires both employer and employee to act in a way that does not destroy or seriously damage the mutual trust and confidence between them.
The judge said SAP breached the term by behaving in an “intolerable or wholly unacceptable” way because it placed Mr Mudgal on the PIP even though it had the endgame of terminating his employment in mind.
“In so doing, the defendant had prejudged the claimant and misled him into thinking that he was being given a genuine opportunity to improve his conduct and/or performance when this was not the case,” he added.
Justice Gill noted that SAP had an “easy means” of dealing with Mr Mudgal by invoking the termination clause in the employment agreement.
“Yet, this was not the remedy that the defendant immediately availed itself to. It imposed a farce of the PIP on the claimant,” he said.
The company is the Singapore-incorporated subsidiary of a German multinational corporation that develops software systems to manage business operations.
Mr Mudgal was head of services sales in the Asia-Pacific and Japan region for a line of cloud-based management software. He had a strained relationship with Ms Otsakchon Raman, head of services delivery for the same line of business in the Asia-Pacific and Japan and Greater China regions.
The events leading up to his termination centred on two incidents.
One incident in July 2018 arose from the transfer of a staff member, who was working on an ongoing project in India, from Ms Raman’s team to Mr Mudgal’s team.
A series of e-mail exchanges between Ms Raman and a member of Mr Mudgal’s team led him to send an abrasive e-mail to Ms Raman, accusing her team of “gross incompetence”.
Another dispute in October 2018 over project timelines led Mr Mudgal to send an e-mail, with senior management copied, in which he attacked Ms Raman’s leadership and integrity.
He refused to apologise when asked to do so.
In November 2018, Ms Charmaine Seabury, the global vice-president of services sales, told human resources business partner Adele Teo-Gomez that there was “full alignment” among senior leaders on removing Mr Mudgal.
Over a month, Ms Teo-Gomez and others from the employee relations department discussed the various options with Ms Seabury.
Mr Mudgal was formally placed on the PIP between March 21 and May 5 in 2019.
On Oct 25, 2019, Ms Seabury made it known that she wanted his employment to be terminated “as soon as possible”, saying that there were still issues with his conduct.
The notice of termination was served on Mr Mudgal on Nov 21. It stated that he would be placed on garden leave and that his last day would be Dec 31.
The judge said the evidence made it clear that Mr Mudgal was prejudged, pointing to the e-mails sent among various individuals including Ms Seabury, Ms Teo-Gomez and Ms Raman.
Prior to Mr Mudgal being placed on the PIP, there were individuals within the management who were adamant about removing him from the company’s employment as soon as possible, he noted.
Justice Gill said Mr Mudgal was never given a genuine opportunity to improve. “The attitude which Ms Seabury bore towards the claimant, namely her desire to terminate his employment as soon as possible, persisted even after she formally placed him on the PIP,” he added.
He noted that barely one month into the PIP, Ms Seabury told Ms Teo-Gomez that “we do not believe these changes in behaviour will be maintained” and that “we would like to remove him from the business as soon as possible”.
The judge added, however, that Mr Mudgal failed to show that his loss of future earnings flowed from the company’s conduct.
Mr Mudgal arrived at the figure of nearly $5 million by applying a “conservative” 10 per cent uplift to his annual future earnings from his last-drawn annual income of $665,673 in 2019, less his earnings to-date of $50,000. He claimed he has been unable to find employment despite applying for more than 300 jobs from 2020 to 2023.
Justice Gill said: “I fail to see how (SAP’s) conduct would have had any bearing on (Mr Mudgal’s) employability in the labour market, much less caused him ‘irreparable damage to his ability to secure gainful employment’.”
He added that it was objectively easy to see how and why Mr Mudgal’s “self-righteous and unyielding behaviour” contributed to the hostility in an already volatile environment between the two teams.
“He was, to a large extent, the author of his own misfortunes that culminated in the termination of his employment,” said Justice Gill.
“The outcome of this case may well be a Pyrrhic victory for the claimant, but I hope that it will provide him with some vindication and allow him to move on with his life.”
The judge said the facts of this case showed why the implied term of mutual trust and confidence is needed. “There is nothing irreconcilable between the right to bring an employment relationship to an end and the duty not to behave in an intolerable or wholly unacceptable way,” he said.