Sri Lanka Law Reports •(1978-79) 2 5. L. R.
St. Anthony's Hardware Stores Ltd.v.
Ranjit Kumar and another
COURT OP APPEAL
WIMALARATNE, P. AND VICTOR PERERA, J.
C. A. APPLICATION NO. 1461/78JUNE 21, 1979
Termination of Employment of Workmen (Special Provisions) Act, No. 451971, sections 2, 6—Services of workman terminated for incompetence—Reinstatement and payment of back wages ordered by Commissioner ofLabour-—Jurisdiction to make such order—Is such termination one im-posed as a punishment by way of disciplinary action.
Termination of the services of a workman on the ground of inefficiencyor incompetence is not termination “ by reason of punishment imposed byway of disciplinary action” within the meaning of section 2 of theTermination of Employment of Workmen (Special Provijions) ActNo. 45 of 1971. Accordingly the Commissioner of Labour has jurisdictionto inquire into and make order under this Statute in such a case.
Cases referred to
Karmar v. Cornelius, (1885) 141 E. R. 94.
Ramaswamy Aiyar v. Madras Times Printing & Publishing Co. Ltd.(1918) A.I.R., Madras 1257.
APPLICATION for a Writ of Certiorari.
H. L. de Silva, with F. Mustapha, for the petitioner.
C. Ranganathan, Q-C., with K. Thevarajah, for the 1st respondent.
K. M. M. B. Kulatunga, Additional Solicitor General, with C. Sithampcra-pillai, State Counsel, for the 2nd respondent.
Cur. adv. vult
July 23, 1979.
The 1st respondent was appointed as Accountant of thepetitioner company with effect from 9.2.76. The appointment wason probation for a period of six months. There is nothing toshow that the probationary period was extended. On the contrary'the 1st respondent was given an increase of salary of Rs. 300per month from 1.8.76. On 28.4.78 the 1st respondent was informedby letter 2R1 that his services were no longer required by thepetitioner and he was given one month’s notice of termination ofservices. The reason given for the termination was that on theadvice of their Bankers the petitioner had decided to appoint anAccountant well experienced in all spheres of import financementand who would be in a position to render prompt accounting datafor Bank study. The letter also alleged that it was not possiblefor the 1st respondent to effectually control the proper book-keeping and accounting functions of the company. The 1st
CA St. Anthony's Hardware Stores v. Ranjit Kumar7
respondent replied by his letter 2R2 dated 2.5.78, repudiating thecharges of inefficiency regarding his work, and complained thatthe termination was illegal. The petitioner replied by 2R3of 3.5.78 that it was their right to employ an Accountant “ whois in a position to maintaining accounting up to date ” and whichhe (1st respondent) “ had not been in a position to do ”. The 1strespondent thereupon complained to the 2nd respondent, theCommissioner of Labour, by his letter 2R4 dated 25.5.78.
An employer’s right to terminate a contract of service on non-disciplinary grounds has been removed from the area of anemployer’s control and discretion by the Termination ofEmployment of Workmen (Special Provisions) Act, No. 45 of1971. The relevant sections are :—
“Section 2(1)—No employer shall terminate the scheduledemployment of any workman without—
the prior consent in writing of the workman; or
the prior written approval of the Commissioner.
Section 2(3)—For the purposes of this Act, the scheduledemployment of any workman shall be deemed to be terminatedby bis employer if for any reason whatsoever, otherwise thanby reason of a punishment imposed by way of disciplinaryaction, the services of such workman in such employment areterminated by his employer, and such termination shall bedeemed to include non-employment of the workman in such•employment by his employer, whether temporarily or perma-nently.
Section 5—Where an employer terminates the scheduled em-ployment of a workman in contravention of the provisions ofthis Act, such termination shall be illegal, null and void, andaccordingly shall be of no effect whatsoever. ”
Section 6 provides that where an employer terminates theemployment of a workman in contravention of this Act, theCommissioner may order such employer to continue to employthe workman.
The 2nd respondent caused the 1st respondent’s complaint, tobe inquired into by an Assistant Commissioner. The inquiry wasconducted in the presence of the parties and/or their Attorneys-at-Law on 9.9.78, and 9.10.78, and thereafter written submissionswere entertained. The Commissioner made order by his letter‘E’ dated 6.12.78, ordering the employer to continue to employthe 1st respondent from 18.12.78, and to pay him back wages andallowances.
Sri Lanka Law Reports
(1978-79) 2 S. L. R.
By the present application the petitioner seeks to have thatorder of the Commissioner quashed on two grounds, namely,
that the Commissioner had no jurisdiction to order
reinstatement as the termination had been on disci-plinary grounds, and
that the Commissioner, in conducting the inquiry, has
not complied with the principles of natural justice.
Expanding his argument on the first of the above grounds,learned Counsel for the petitibner submitted that the mainreason for this piece of legislation was the need felt by theState to exercise a greater degree of control over non-disciplinaryterminations in the wake of increasing unemployment in thecountry. Whilst it was intended to prohibit employers resortingto retrenchment and lay off in circumstances not warranting it,on such premises as lack of raw materials and so on, the Actwas not intended to preclude termination on good grounds. Ourtask, however, is to give the words of the Statute their plainmeaning. Section 2 C3) is in very clear language.
By section 2 the Commissioner of Labour has been vested withjurisdiction to order reinstatement if the termination has been“ otherwise than by reason of a punishment imposed by wayof disciplinary action Only termination by way of disciplinaryaction ousts the jurisdiction of the Commissioner. Retrenchmentand lay off are not the only non-disciplinary grounds covered bythe Act.
It is also important to note that to oust the Commissioner’sjurisdiction the termination has had to be not only by way ofdisciplinary action, but also by reason of punishment imposedby way of disciplinary action. What then is meant by terminationon disciplinary grounds ? When an employee is guilty of mis-conduct then termination would be by way of punishment ondisciplinary grounds. Insubordination, dishonesty, drunkennesswhilst at work, malicious damage to employers’ property aretypes of misconduct which readily come to mind. Negligence maysometimes amount to misconduct, depending on the gravity of thebreach of the duty of care. But inefficiency and incompetencedenote a person’s inability to perform the work allotted to him,and it is difficult to see how they could be equated to misconductfor which punishment by way of disciplinary action may beimposed within the meaning of the Act.
Mr. de Silva contended that as incompetence means want ofability or lack of capacity to perform the task allotted to aworkman, failure to provide the requisite skill is the breach of
St. Anthony's Hardware Stores v. Ran.it Kunar
an implied or express duty to provide that skill ana is thereforea breach of an undertaking given at the time of his employment,and that this amounts to misconduct. He supported his argumentby reference to a case where incompetence was equated tomisconduct. The case is an old case, that of Karmer v. Corneliusdecided in the Court of Common Pleas in the year 1858 (1).There the defendant had retained the plaintiff in hisservice in the capacity of a painter, and though the plaintiff hadbeen always ready and willing to continue in thedefendant’s service, the defendant discharged him beforeIhe stipulated period. The jury found as a fact thatthe plaintiff was incompetent. Said Willes, J: “The failureto afford the requisite skill which had been expressly or impliedlypromised, is a breach of legal duty, and therefore misconduct; ”and quoting Lord Ellenborough in Spain v. Amott, the learnedJudge said “ ‘ The master is not bound to keep him on as aburthensome and useless servant to the end of the year.’ Andit appears to us that there is no material difference between aservant who will not, and a servant who cannot, perform theduty for which he was hired. ” at 99.
The above is, if I may say so with respect, an unexceptionalexposition of the common law. It has been applied in a numberof cases in actions for damages for wrongful dismissal, and fromit has emerged the rule that where a person is employed whohas not the requisite competency for the office, his dismissalbefore the stipulated term of service is not wrongful, and noaction lies for damages therefor—see for example, V. RamaswamiAiyar v. Madras Times Printing & Publishing Co. Ltd. (2). Inactions for damages for wrongful dismissal Courts haveno doubt equated incompetence to misconduct. But herewe are dealing with a statute which has altered thecommon law, and in altering the common law Parliamenthas been careful to provide the employer with anotherremedy; I refer to section 2 (1) (b) where a workman’semployment may be terminated with the prior written approvalof the Commissioner of Labour. If a workman is incom-petent it is always open to the employer to make an applicationto the Commissioner to terminate the employment of such work-man on the ground of incompetence.
To hold that incompetence is a form of misconduct for whichthe services of workman could be terminated as a punishmentby way of disciplinary action, would be to do violence to th° verylanguage of the statute, and to render the purpose for which thestatute was enacted nugatory.
Sri Lanka Law Reports
(1978-79) 2 S. L. R.
The second ground on which a writ is asked for is that theCommissioner failed to comply with the principles of naturaljustice. The record of the proceedings before the Commissionerclearly shows that Counsel for the employer was given everyopportunity of placing evidence if he so desired, but that he wascontent on making submissions only.
For these reasons I would refuse this application with costs.VICTOR PERERA, J.—I agree.
St. Anthony ‘ s Hardware Stores Ltd v. Ranjit Kumar and anothe