i^IRJMANh, J. — Ceylon Slufc „1 forfymjc I*ank v. Fernando
NEW LAW REPORTSOF CEYLONVOLUME* LXXIV1970Prescid : Sirimane, J., and Wijayatilakc, J.
CEYLON STATE MORTGAGE BANK, Petitioner,anil T. V. FERNANDO, RespondentS.G. 322j70—.Application for Writs of Certiorari and Prohibition
Industrial dispute—Employee, of Slate Mortgage Bank—licliremcnt Jrom sendee—Gratuity paid by the Bant:.—Jurisdiction o) a Labour Tribunal to award a greatersum—Stale mortgage Bank Ordinance (Cap. 39S), s. -9-1 (1) (c)—IndustrialDisputes Act (Cap. 131), s. 31B (J) (b).
"Whore the Stnto Mortgage Bank has paid an cmployeo n certain sum aagratuity on his retirement from service of the Bank, and the sum was paid ontho basis of a Kulo passed by tho Minister in 1914 under section 94 (1) (c) oftho State Mortgage Ordinance, a Labour Tribunal has nevertheless jurisdiction. under section 3 IB (1) (6) of tho Industrial Disputos Act to hoar a subsoquontapplication made by tho employee for an enhanced sum as gratuity.
ApPEAL from an order of a Labour Tribunal.Eangunathan, Q.C., with Lakshman Kadirgamar and Chula de Silva-,for the petitioner.
W. Jaycicardenc, Q.C., with Cecil de S. Wijeycralne and G. AI. S.Samarawcera, for the 1st respondent.
Cur. adv. vult.
August 28, 1970. Sirimaxe, J.—
Tho 1st respondent to this application was an employee of the petitioner(the State Mortgage Bank) from 1.10.51 to 1G.7.63, when he retired outlieground that he was lacking in proficiency in the official language.
SIRIMAXE, J.—Ceylon Stale Mortyayc Bank v. Fernando
On retirement he was paid a gratuity of Rs. 8,616-25. No rules havobeen framed for the basis on which the amount to be paid as gratuityshould be calculated, but-, R2 shows that in 1959 the Manager of thebank had written to the Permanent Secretary to the Minister of Pinaneofor guidance on this point. By R3 in the same year tho PermanentSecretary replied that the Minister recommended that a rule should boframed for payment of gratuity calculated at the rate of ono month’spay for each year of service, but the total amount should not exceed oneand two-third times the basic annual salary of the employee.
A month’s salary for each year of service had been, in fact, the basison which gratuities had been paid up to that time. R4 shows that theBoard by a resolution accepted this basis of computation on 7.1.GO andthough no rule was framed, it was conceded that the quantum of gratuitypaid to employees who retired was computed on this basis. The- respondent’s affidavit gives a number of such instances. In every oneof these cases tho quantum had been determined by the Board of Directors,and payments sanctioned and approved by the Minister.
On this basis the amount which would ordinarily have been paid to thefirst respondent whose period of service was eleven years nine monthsand sixteen days would be Rs. 15,275. He went before the LabourTribunal and claimed the difference between that sum, and the sum ofRs. 8,G1G25 which was the amount actually paid to him.
The petitioner took up the position that the Tribunal had no jurisdictionto hear the first respondent’s claim.
By order dated 10.2.70 tho Tribunal held against the jietitionor, andfixed the matter for hearing on 29.4.70. On 26.4.70 the Petitionermade the present application to this Court for a Writ of Certiorarito quash the order of the Labour Tribunal.
Section 94 (1) (c) of the State Mortgage Bank Ordinance (Cap. 39S)authorizes the making of rules for the payment of gratuities. PI setsout the rule relating to this matter, on which the petitioner stronglyrelics, the relevant part of which reads as follows :—
“ The Board may with the sanction of the Minister of Finance pay agratuity of such amount as the Minister ma3’ approve,
(n) to any officer or a servant of the Bank on his retirement fromservice of tho Bank ;
to any officer or a servant who has retired from tho serviceof tho Bank before the date on which this rule is made. ”
It is contended for the petitioner that the amount paid to the firstrespondent is the amount approved by the Minister under that rule,that the petitioner is statutorily forbidden from paying anything more,
STRIMAXB, J.—Ceylon Stole Moelyaye litml: v. Fernando
and that any order by the Labour Tribunal to pay more would overridethe rule ns quoted above. The jurisdiction of the Labour Tribunal in amatter like this is set ouf’in Section 31B (1) (£>> of the Industrial DisputesAct, Cap. 131, as follows :—
“A workman or a trade union on behalf of a workman who is amember of that union may make an application in writing to a LabourTribunal for relief or redress in respect of any of the followingmatters :—
(6) Tito question whether any gratuity or other benefits are due tohim from his employer on termination of his services and theamount of such gratuity and the nature and the extent of suchbenefits. ”
The employer of the first respondent is the Bank, and not the Minister.It is transparently clear from the affidavit and the documents filed thatit is the employer who actually determines the quantum of the gratuityto be paid to an employ'ec. The Minister has really nothing to clo withthe performance of that function. It was conceded, for instance, that ifthe employer decided not to pay any sum at all as gratuity, the Ministercoulcl not compel the employer to do so. But, once the employer decidesto pay a certain sum as gratuity, the payment has to be made out ofpublic funds, and such payments must be authorised by the Minister ofFinance. The words “ sanction ” and “ approve ” in the context inwhich they appear in the rule (PI), in my view, mean no more than thatthe Minister of Finance authorizes the payment of the gratuity as deter-mined by the employer, out of public funds. The Minister's sanctionfor payment is only a procedural requisite.
In this instance the Minister’s “ sanction and approval”, if I mayput it that way, lias been obtained by the employer for the payment ofthe amount as determined by the Board. But this fact docs not inmy view preclude the employee from seeking relief from the LabourTribunal against a decision by an employer which he (the employee)alleges is unjust and inequitable.
I cannot agree with Counsel for the Petitioner, that if the LabourTribunal decides that the quantum of gratuity should be larger thanthat determined by the employer, such a decision would be “ contraryto the Statute
The Industrial Disputes Act is a piece of social legislation first enactedin 1950 and amended thereafter from time to time to meet the changingconditions in the structure of our society, and to grant employees—
“ workmen ” as the}' are called—certain privileges and facilities thatthey had hitherto not enjoyed. The section relating to the review ofgratuities by a Labour Tribunal quoted above came in as an amendmentin 1957.
SIRIAf.A E, J.—Ceylon State Mortgage Bank v. Fernando
I cannot imagine that a procedural rule (P.l) passed in 1044 evenbefore we gained independence, has the effect of ousting the jurisdictionof Labour Tribunals constituted b}’ the legislature long after that inorder to settle, precisely this type of dispute between employer andemployee.
Counsel for the petitioner further submitted that the Minister mayrefuse to sanction payment of a sum determined by a Labour Tribunal.Such a possibility seems most unlikely. If an employee succeeds ingetting an order in his favour from a Tribunal specially created by thelegislature to make just and equitable orders unfettered by legal techni-calities, one must assume that the Minister will not act in such a manneras to stultify such orders. Craies on Statute Law, Fifth Edition, atpage 27S cites a passage from the ease of Land Realization Co. Ltd. v.Postmaster General1, where Romer, J. said—
“ One has to bear in mind that when the Legislature confers powerson a Minister it is conferring powers on a person who, presumably willuse these powers, not only bona fide but in a responsible spirit and inthe true interests of the public and in furtherance of the objects forthe attainment of which the powers were conferred.”
I am also attracted by the alternative argument of Mr. Jayewardenefor the respondent. He submitted that a gratuity, in the strict sense ofthe term, being a voluntary payment depending on the inclination of thegiver, perhaps needed ministerial review for disbursement out of publicfunds, but, once a Labour Tribunal determines a just and equitablesum as gratuity in the exercise of the jurisdiction conferred on it bj-Legislature, the payment of that sum no longer needed review ; and“ approval or “sanction” for payment thereafter was purely anadministrative step.
As I have reached the conclusion that the Labour Tribunal liasjurisdiction to hear the first respondent’s claim, it is unnecessary todiscuss the further points raised by Mr. Jayewardene, that there has beenundue delay and lack of good faith, in making this application.
Mr. Ranganathan for the petitioner pointed out that there is an error,on the face of the order of the learned President, for he seems tohave assumed that there were two conflicting rules, viz., the one framedin 1944 (PI), and another rule which sets out the basis of computationof gratuities. That, of course, is an error, for a second rule wasnot framed: but, the error does not affect the jurisdiction of tho LabourTribunal to hear the first respondent’s claim.
The application is dismissed with costs.
WlJAYATILAKK, J.1 agree.
1 (tOiO) 1 Chancery I■'!,}.
CEYLON STATE MORTGAGE BANK, Petitoiner, and T. V. FERNANDO, Respondent