The next time you feel like penning a savage reference letter for one of your former employees, think about this case. Former insurance agent Ramesh Krishnan was just awarded $4.026 million by the High Court after a harsh letter of reference from his previous employer, AXA Life Insurance Singapore, caused him to lose the job opportunity he was gunning for at Prudential Assurance Company Singapore. The awarded money was to compensate for his loss of earnings from the negligence on AXA’s part, reported The Straits Times.
As Justice George Wei noted yesterday (Aug 14), both parties offered opposite stands when it came to damages — Ramesh had asked for $63 million, but AXA said he should only get a nominal amount of… $1. Harsh.
The 47-year-old, who was said to be “one of AXA’s best-compensated advisers”, had accused AXA of defamation in 2012 for its references regarding his performance at work. Ramesh lost the defamation suit in the High Court in 2015, but the Court of Appeal ruled last year that AXA had breached its duty of care to him and asked the High Court to determine the damages.
According to industry sources, this apex court ruling showed the standard of care that employers had to observe in writing references for employees and meeting the requirements of truth, accuracy and fairness.
Reportedly, when Prudential asked for Ramesh’s reference from AXA, the company responded to say that his outfit “showed a very poor 13th month persistency rate”, meaning that a high number of his clients did not stay with their policies. AXA also added that it was “very concerned as to whether the clients have been provided with proper advice”.
The Court of Appeal said that AXA’s breach of duty resulted in Prudential’s decision not to bring Ramesh on board, as the letter gave the wrong impression that he was not competent — this was contrary to evidence that Ramesh was one of AXA’s best financial services directors, and the firm had even attempted to convince him not to resign earlier on.
Using the package conditionally offered by Prudential as a guide, Justice Wei saw that from April 2011, Ramesh would’ve had a commencement allowance of $675,000 and a starting monthly salary of $65,625 for the first year, followed by $43,750 per month until July last year. He also took into account the loss of future earnings from last August until next July at a discounted rate. After that, he subtracted the salary Ramesh had earned when he worked at a vegetarian cafe in the meantime.
In light of the ruling, an AXA spokesman said the company has sought legal advice on the judgment. As for Ramesh, he hopes to return to his career in insurance, which he’s been doing for 15 years.
