Hettiarachchi Industries (Pvt) Ltd. v. Daya Kanthi
HETTIARACHCHI INDUSTRIES (PVT) LTD.v.
SUPREME COURTAMERASINGHE. J.
S.C. APPEAL NO. 150/97FEBRUARY 23. 1998.
Termination of Employment Act 45 of 1981 – Employee on maternity leave -Services terminated for alleged misconduct in wrongfully refusing to work – Afterletter of termination was despatched business premises burnt down – Frustrationof the contract – Is the employee entitled to – damages.
The respondents services had been terminated for alleged misconductbefore the fire took place.
Although the workplace had been burnt down, the termination on accountof the alleged misconduct was reiterated after the date of the fire.
APPEAL from an Order of the High Court.
Chula de Silva, PC with Miss T. Ratnaike and P. Fernando for appellant.
S. Sinnetamby with Thenuwara for respondent.
Cur. adv. vult.
June 10, 1998.
K.D. R. Daya Kanthi (respondent) was employed as a Typist Clerkby Hettiarachchi Industries (Pvt) Ltd. (appellant). The respondentobtained 97 days of approved maternity leave from 7th November,1998. By a letter dated 8th December, 1998, her services wereterminated by the appellant.
Sri Lanka Law Reports
(1998} 3 Sri L.R.
The letter of termination stated that from the 7th of November, 1988the employees of the appellant had "not only wrongfully refused toperform their duties, but also unlawfully prevented the managementfrom running the affairs of the company". It was alleged that "businessoperations had been brought to a standstill". The letter states: "Youhave created a situation by your acts of misconduct in preventing uscarrying on any business . . . We have no choice but to inform youthat due to the aforesaid reasons your employment/apprenticeship withus has ceased/stands terminated”.
It was not in dispute that the letter of termination was a letter ina standard form issued to all the appellant's employees. As far asthe respondent was concerned, she was on maternity leave duringthe whole of the period during which the alleged acts of misconductby the appellant's employees were supposed to have been committed.In fact the respondent had been at the General Hospital, SriJayawardenepura, from 7th November to 25th November, 1988.
After the letter of termination had been despatched, some timeduring the night of the 8th/9th December, 1988, the business premisesat which the respondent had been employed, was completely burntdown.
In response to a request from the respondent for employment, theappellant wrote to the respondent on 8th February, 1989, referringto the damage caused by the fire and inviting her to satisfy herselfof the truth of the matter. It was stated that in the circumstances therewas "no possibility whatsoever of offering work to anybody . . . quiteapart from what we have stated in the previous letter dated 8thDecember, 1987, we have to add that your contract of employmenthas got frustrated". The employer offered to pay a sum of moneycalculated on the basis of a half month's salary for each year of serviceas "full and final" payment of statutory or other dues.
The respondent appealed to the Labour Tribunal for relief. Afterinquiry, on 22, October, 1992 the Tribunal awarded the respondenta sum of Rs. 77,510 as damages.
Hettiarachchi Industries (Pvt) Ltd. v. Dayai Kahthi(Amerasinghe, J.)
The employer then appealed to the High Court praying, inter alia,that the order of the Labour Tribunal be set aside. On 2nd August,1996, the High Court dismissed the appeal with costs.
The employer (appellant) then appealed to the Supreme Court.Leave to appeal was granted on the following matters:
Did the respondent's employment come to an end by frustration/impossibility of performance due to the destruction of the placeof her work? If so does the Labour Tribunal have any jurisdictionto grant any relief?
Where a contract of employment comes to an end by frustration,is there an obligation on the part of the employer to obtain anypermission of the Commissioner of Labour under theTermination of Employment Act, No. 45 of 1991.
Does the fact that the employer has not been liquidated resultin the non applicability of the doctrine of frustration, where theplace of employment is destroyed?
In the circumstances of this case, was the Labour Tribunal andthe High Court under a duty to make an order which was justand equitable not only by the workmen, but also by the employer?
Did the respondent's employment come to an end by frustration/impossibility of performance due to the destruction of the place ofwork?
Assuming that the destruction of the place of the respondent's workmight have brought an end of the contract of employment by theoperation of law relating to frustration of contracts, there must havebeen a contract of employment to be frustrated at the relevant time.
In the matter before us, the respondent's services had beenterminated for alleged misconduct before the fire took place. Theappellant reiterated the grounds of termination in their letter dated 8th
Sri Lanka Law Reports
(1998] 3 Sri L.R.
February, 1989: frustration of the contract is no doubt mentioned, butas an additional reason for not being able to accede to the respond-ent's request for work. Fire or no fire, as far as the appellant wasconcerned, it had been decided to terminate the services of all itsemployees for alleged misconduct. Although her workplace had beenburnt down, the termination on account of alleged misconduct wasreiterated after the date of the fire. As far as the respondent wasconcerned, as we have seen, she was not in any way to be blamedfor the reasons adduced by the appellant for the termination of theservices of the appellant's employees en masse.
I am of the view that the learned President of the Labour tribunaland the learned Judge of the High Court were right in holding thatthe termination of the respondent's services was without justification.
I am in agreement with the view expressed by learned counselfor the appellant that an equitable order should take the employerand employee into account. In the circumstances of this case, I findno reason to hold that the award made by the Labour Tribunal wasinequitable. The fact that the workplace was burnt down does notper se relieve the employer of his obligations to his employees.
The other questions of law on which leave to appeal was granteddo not arise for consideration in view of what I have stated above.
For the reasons set out in my judgment, I dismiss the appeal andaffirm the decision of the High Court. The appellant will pay therespondent a sum of Rs. 10,000 as costs.
WADUGODAPITIYA, J. – I agree.WIJETUNGA, J. – I agree.
HETTIARACHCHI INDUSTRIES (PVT) LTD. v. DAYA KANTHI