C. E. S. U. v. Land Reform Commission .
CEYLON ESTATE STAFFS' UNION
v.LAND REFORM COMMISSION
SHARVANANDA, C. J.. ATUKORALE, J. ,.ND H: A G. DE SILVA, J.
S.C. No. 7/86; C.A No. 1092/83.
MARCH 30, 1987. .
Certiorari-Industrial Disputes Act No 43 of 1959 s. 4(1)-Arbitration-Award-Vesting of Estate in Land Reform Commission-Land Reform Law s. 42 (B)5(a)-Land Reform (Special Provisions) Act No. 39 of 1981 s. 27A-Land ReformAmendment Law No. 39 of 1975 s. 42H.
One Nandasena an employee of Halpe Estate belonging to Ceylon Rubber Co. Ltd. wasinterdicted from his employment on 17.07.1975 on being taken into custody on anaccusation of attempted murder by poisoning of the Superintendent of the Estate. Hewas acquitted by the High Court on 13.09.77 on withdrawal of the indictment but wasnot reinstated. On a reference to arbitration dated 21.01.81 under the IndustrialDisputes Act No. 43 of 1959 s. 4(1) the arbitrator made award on 28.02.83 orderingreinstatement and back wages. On 17.10.75 Halpe Estate vested in the Land ReformCommission (LRC) and accordingly the rights and liabilities of the former owners passedto the LRC. By order of the President the Janatha Estates Development Board (JEDB)was established and in terms of s. 27A of the Land Reform (Special Provisions) Act No.39 of 1981 read with s. 42 H of the Land Reform Amendment Law No. 39 of 1975Halpe Estate was vested in the JEDB by order dated 12.03.1982. The liability of theCommission in respect of the non-employment of Nandasena devolved on the JEDB.The award of the arbitrator was against the LRC and made on 28.02.83 but on12.03.82 Halpe Estate had vested in the JEDB. The Court of Appeal issued a writ ofcertiorari quashing the award against the LRC. On appeal to the Supreme Court anapplication to substitute the JEDB in the room of the LRC was resisted on the ground ofprejudice.
Add JEDB as a party.
Justice requires that the JEDB in whom Halpe Estate is presently vested bedirected to perform the obligation of the LRC towards the workman as directed by theaward.
Award amended to make JEDB liable.
APPEAL from order of Court of Appeal.
Mark Fernando PC. with N. Abdul Rahman and Miss S. Wijeyagunasekera for therespondent.
Faiz Mustapha for JEDB.
Cur. adv. vult.
Sri Lanka Law Reports
 2 SriL.R.
May 27. 1987.
By application dated 7th September, 1983, the'Land ReformCommission petitioned the Court of Appeal for a mandate in thenature of a Writ of Certiorari to quash the award dated 20.02.83made by the Arbitrator, Industrial Court on a reference to him of thedispute by the Minister of Labour in terms of section 4(1) of theIndustrial Disputes Act No. 43 of 1959.
By this award the Arbitrator ordered that-
the workman S. A. Nandasena, who was a member of thepetitioner Union-the Ceylon Estate Staffs.Union (the Petitionerbefore this Court)-be reinstated by the Land'ReformCommission from the date of his interdiction from work, namely17.07.75.
that the workman be paid all back wages consequent toreinstatement from date of interdiction up to 31.03.83.
that the workman should be considered as having been inservice during the period of interdiction for the purpose ofincrement, promotion and any other statutory payment.
The workman was an employee of Halpe Estate belonging to theCeylon Rubber Co. Ltd., in 1961 as an Assistant Factory Officer andStorekeeper. The estate was managed by George Steuart & Co. Ltd.,as managing agents. The workman was taken into custody forsuspected poisoning Of the Estate Superintendent. He was releasedon bail on 16.07.75. He asked for his job back on 1 7.07.75, but byletter A1 he was interdicted. The workman was charged withattempted murder and acquitted by the High Court. The indictmenthad been withdrawn on 13.09.77 as there was no prima facie case.
In the meantime on 17.10.75 Halpe Estate had vested in the LandReform Commission, under the Land Reform (Amendment) Law No.39 of 1975, which provided for the vesting of estate lands owned bypublic companies.' Then the workman demanded his job. He was notre-employed. The Ministry of Labour by reference dated 21.01.8Vreferred the dispute to an Arbitrator. The matter in dispute waswhether the non-employment of the workman by the Management ofthe Halpe estate was justified; if not, to what relief the workman was
SCC. £ S. U. v. Land Reform Commission (Sharvananda. CJ.)205
entitled. The parties to the dispute were Ceylon Estate Staffs Union(petitioner to this court) which sponsored the workman’s cause on theone part and the Ceylon Rubber Co. Ltd., which owned Halpe Estateand the Land Reform Commission which was vested with the estateon the other part.
As stated earlier Halpe Estate had vested in the Land ReformCommission on 17.10.75 in terms of section 42 (B) 5(a) of the LandReform Law No. 1 of 1972, as arm ided by Land Reform AmendmentLaw No. 39/75.
Section 42(B) 5(a) provides-
"Where any estate land is vested in the commission, the rightsand liabilities of the former owner of such estate land under anycontract or agreement, express or implied, which relates to thepurposes of such, estate land and w.iich subsists on the dayimmediately prior to the date of such vesting, and the other rightsand liabilities of such owner …. shall become the rights andliabilities of the Commission:.
■ I agree with the Court of Appeal that the section applies to rights,and liabilities flowing from contracts of employment, as such rightsand liabilities relate to the running of Such estate land. So the rightsand liabilities of the former owners, namely Ceylon Rubber Co. Ltd.,vested in terms of the above section on the Land Reform Commissionon 17.10.75, and the workman became an employee of the LandReform Commission though he was under interdiction.
Thereafter the President of Sri Lanka being in charge of the subjectof the State Agricultural Corporations Act No. 11 of 1972, by orderspublished in Government gazette extraordinary No. 77/2-80 of25.2.80 established Corporations with the corporate name "JanathaEstates Development Board" Nos. 1 -4 for the purposes set out in theFirst Schedule thereto:
In pursuance of the request by the Land Reform Commission, theMinister of Agricultural Development and Research in terms of section27A of the Land Reform (Special Provisions) Act No. 39 of 1981 readwith section 42H of the Land Reform Amendment Law No. 39 of1975 vested Halpe Estate in the Janatha Estates Development Boardby order notified in the Government gazette extraodinary hereinafterreferred to as 'JEDB' No. 183/10 – 1982 of 12.3.82. By this orderHalpe Estate became vested in the Janatha Estates DevelopmentBoard (hereinafter referred to as JEDB).
206Sri Lanka Law Reports 2 SriL.R.
Section 27A (3) of the Land Reform (Special Provisions) Act No. 39of 1981 provides that – .
'Where any agricultural land or estate land or any portion thereofis vested in a State Corporation by an order made under subsection(1) all the rights and liabilities of the Commission under any contractor agreement, express or implied, which relate to such agriculturalland or estate land or portion thereof, and which subsist on the dayimmediately prior to the date of such vesting, shall become therights and liabilities of such State Corporation".
By virtue of this provision, the liability of the Commission in respectof the non-employment of the workman S. A. Nandasena devolved onthe JEDB.
Upon the reference by the Minister, proceedings before theArbitrator commenced and oral evidence of the workman was takenon 2.12.81. The JEDB was made a party to the Arbitration as agentsof the L.R.C. and was discharged. The fact that Halpe Estate hadvested in the JEDB on 12.3.82 was communicated to the Arbitratorafter the proceedings, but in the course of written submissions. TheArbitrator made his award on 28.2.83. By the said award heordered-
That the workman S. A. Nandasena be reinstated by the LandReform.Commission from the date of the interdiction from work,namely 1 7.7.75;
That the workman be paid all back wages from the date ofinterdiction up to 31.3.1983, aggregating to Rs. 45,093.75;
That the workman should be considered as having been inservice during the time of interdiction;
That the sum of Rs. '45,093,75 be deposited by the LandReform Commission with the Assistant Commissioner ofLabour, Avissawella, within a week of the date of the publicationof the award in the Government gazette;
Further held that the vesting of Halpe Estate in the JEDB from12.3.82, did not govern the dispute that was referred to him.
SCC. E. S. U. v. Land Reform Commission (Sharvananda. C.J.)207
Dissatisfied with this award of the Arbitrator, the Land ReformCommission moved the Court of Appeal for a writ of certiorari,quashing the award of the Arbitrator on the ground that the rights andliabilities of the Commission had, by Halpe Estate vesting in the JEDBdevolved on the JEDB on 12.3.82.
The Court of Appeal by its order dated 22.1.85 held that the rightsand liabilities of the Land Reform Commission as de facto employerhad passed on to JEDB and that on the date of the award theCommission had ceased to be the employer of the workman and hadbeen relieved of liability by operation of law. The Court held that theArbitrator had erred in making the award against the Commission andhence it quashed the award. The basis of the judgment of the Court ofAppeal was that the liability of the Land Reform Commission had, priorto the date of the award, devolved on the JEDB and that as the LandReform Commission had ceased to.be the workman's employer itcould not carry out the directions contained in the award. Beingaggrieved with the order of the Court of Appeal the Ceylon EstateStaffs Union has, with the leave of this court preferred this appeal1.
On the submission of counsel for the Commission, it appeared tothis court that the JEDB as successor of the Commission, should beadded as a party and be heard as to why it should not be substituted inplace of the Land Reform Commission in the award made by thearbitrator and be bound by the award. At the hearing of this appealbefore this court, counsel appearing for the JEDB objected to beadded as a party. He submitted that the JEDB was cited as a party inthe arbitration proceedings, though only as agents of the Land Reform ■Commission and. had quite correctly been discharged and that afterthe vesting of.the estate, namely after 12.3.82, it had become anecessary party to the arbitration proceedings and that though it hadbecome necessary to make it a party to the proceedings, it was notadded as a party, and that in the circumstances JEDB would beprejudiced, if in this appeal it is added as a party for it to be bound bythe award.
I see the force of the argument of counsel for JEDB. Ordinarily Iwould have upheld the objection, but since the,award was made on aLabour dispute and the workman will be greatly prejudiced and graveinjustice be caused to him if the award made by the Arbitrator isabsolutely quashed only on the ground that the liabilities of the LandReform Commission had passed on to the JEDB and that the latter has
Sri Lanka Law Reports
 2 Sri L.R.
not been made a party by the Arbitrator, as held by the Court ofAppeal. The workman should not suffer on account of the fact that theJEDB had become vested with the ownership of the estate,subsequent to the Minister's reference, to arbitration. The objection ofcounsel for the JEDB is a technical objection. There is no question thatas at the time of the reference to the Arbitrator the Land ReformCommission was liable to the workman, for the default of its originalowner. But by the time the award came to be made in 1983 the JEDBhad become the owner of the estate and had succeeded to the rightsand liabilities of the Commission. In terms of section 27A (3), theliabilities of the Commission became the liabilities of the JEDB. Theaward made by the Arbitrator related to that liability. Had JEDB beensubstituted in place of the Land Reform Commission in the arbitrationproceedings, the Arbitrator would on the facts, have made the sameaward against JEDB.
In the circumstances justice requires that the JEDB in whom HalpeEstate is presently vested, should be directed to perform theobligation of the Land Reform Commission towards the workman asdirected by the award. The workman should not be driven from pillarto post and post to pillar in his quest for justice especially as. had theJEDB been substituted in place of the Commission before thearbitrator, the evidence shows that he would have made the sameaward against the JEDB.
In the circumstances this court makes order adding JEDB a party tothis appeal, as the successor, in law of the Land Reform Commission.
Counsel for the JEDB conceded that the JEDB became liable toemploy the workman and pay him his wages and arrears as from thedate Halpe Estate vested in the Board. He disputed the Board's liabilityto pay the arrears of wages prior to that date. He contended thatsection 27A (3) of Act No. 39 of 1981 did not make the liability of theCommission for such arrears the liability of the Board.
We do not agree with this contention. We hold that by operation oflaw the JEDB has succeeded to the rights and liabilities of theCommission in respect of the workman and that the liability in respectof which the award was made became the liability of the JEDB and thatJEDB will have to give effect to the reliefs ordered by the award.Accordingly we substitute and add the JEDB in place of the Land
SCC. E. S. U. v. Land Reform Commission (Sharvananda, C.J.)209
Reform Commission in the award dated 22nd February, 1983 andmake order discharging the Land Reform Commission and directingthe JEDB-
To reinstate S. A. Nandasena from the date of interdiction fromwork. 17.7.75;
To pay S. A. Nandasena all back wages from the date ofinterdiction up to 31.3.1983 aggregating to Rs. 45,093.75;
' (c) That S. A. Nandasena should be considered as having been inservice during the period of interdiction for purposes ofincrements, promotions and any other statutory payments;
To pay S. A. Nandasena a further sum of Rs. 15,000 onaccount of all back wages from 1.4.83 to 31.5.87;
That a total sum of Rs. 60,093.75 be deposited by the JEDBwith the Assistant Commissioner of Labour, Avissawella on orbefore 30.6.87.
We have in the interests of justice taken the unusual course of-emending the award to make the JEDB liable. We formally dismiss theappeal against the Land Reform Commission without costs, subject tothe variation that we make order as above against the JEDB who hasbeen added as a party to this appeal.
ATUKORALE, J.- I.agree.
H. A. G. DE SILVA. J. – I agree.
Award amended to make JEDB liable.
CELYON ESTATE STAFFS UNION v. LAND REFORM COMMISSION