Panda Toys Exports (Pvt.) Ltd. v
CACommissioner-General of Labour and others89_
PANDA TOYS EXPORTS (PVT) LTD.v
COMMISSIONER-GENERAL OF LABOUR AND OTHERSCOURT OF APPEALSRISKANDARAJAH, J.
CA 2412/2004APRIL 26, 2006MAY 18, 2006
Termination of Employment of Workmen (Sp. Prov.) Act No. 45 of 1971 -Sections 6, 11 and 12 – Factory closed – Toy factory converted to GarmentFactory – Factory premises leased out. New Company to absorb all workmen -No compensation awarded – Commissioner acting on recommendation of asubordinate – violation of principle ‘he who hears must decide'.
The petitioner was engaged in the business of manufacturing / exporting soft toys.As there was a drop in orders the petitioner had decided to convert the factoryinto a garment factory and leased out the premises to V Company. The VCompany was to absorb all workmen – with continuity of service.
The workmen complained to the Commissioner-General of Labour that thepetitioner was planning to close the factory without giving compensation. Aninquiry was held by the 2nd respondent, and an order was made based on therecommendation of a Deputy Commissioner of Labour, who did not conduct theinquiry. The 1st respondent Commissioner-General of Labour awardedcompensation to the workmen.
The petitioner company urged that, the 1st respondent had made an order on arecommendation which was made by a person who has not held the inquiry.
(1) The 1st respondent had made the impugned order on a recommendationwhich was made by a person, who did not hold the inquiry – the decision ofthe 1st respondent based on that recommendation is illegal.
90Sri Lanka Law Reports 2 Sri L.R
(2) The procedure is in violation of the principle that 'he who hears must decideand as such the order is ultra vires.
APPLICATION for a Writ of Certiorari.
Cases referred to:-
Kundanmal Industries Ltd., v Wimalasena, Commissioner of Labour andothers 2001-3 Sri LR 229.
Nagalingam v Lakshman de Mel, Commissioner of Labour 78 NLR 231.
Murshid Maharoof with S.M. Markhen for petitioner.
Uresha de Silva SC for respondents.
July 4, 2006
SRISKANDARAJAH, J.The petitioner is a private limited liability company incorporatedunder the Company Laws of Sri Lanka has sought a writ of Certiorarito quash the order of the 1st respondent contained in the letter dated22..3.2004 marked P17. By the said Order the 1st respondent hasawarded compensation to the 4th to 14th respondent the workers ofthe petitioner company, under the powers vested in terms of section 6of the Termination of Employment of Workmen (Special Provisions)Act No. 45 of 1971.
The petitioner submitted that the petitioner company was engagedin the business of manufacturing and exporting soft toys from 1996.From 1998 the petitioner company experienced a drop in the ordersand was facing financial crises and it has become impossible to runthe business as a profitable business due to non availability of exportorders. Due to this reason in early 2001 the petitioner decided toconvert the soft toys factory into a garment factory and decided tolease out the factory premises to a company called Viking FashionsLimited at the said premises. The petitioner made specialarrangements in April 2001 with the said company to absorb andemploy all the workmen at the same place, with the same salary andpositions with the continuity of service. Accordingly the said Companywas to start its operation from 18.06.2006.
On 4.6.2001 some of the workers of the petitioner's companycomplained to the 1st respondent the Commissioner General ofLabour stating that the petitioner was planning to close the factory
Panda Toys Exports (Pvt.) Ltd. v
CA Commissioner General of Labour and others (Sriskandaraiah. J.)91
from 15.06.2001 without giving compensation to the workmen (P2).On 16.06.2001 the 4th to 14th respondents had made an applicationto the 1st respondent stating that their rights were denied with effectfrom 15.06.2001 (P3).
Consequent to the receipt of the aforesaid complaints of theemployees, the petitioner was informed of this complaint and bothparties were intimated to be present for an inquiry on 19.7.2002 (1R2)by the 1st respondent. The inquiry was held by the 2nd respondentwith the participation of both parties and both parties were given anopportunity to file written submissions. The order marked P17 dated
was made based on the recommendations (1R4) that wereforwarded consequent to the aforementioned inquiry. Thisrecommendation was made by one M.N.S. Fernando, DeputyCommissioner of Labour (Termination Unit). The petitioner contendthat Mr. M.N.S. Fernando did not conduct the said inquiry and thepetitioner never took part in an inquiry before M.N.S. Fernando but therecommendation marked 1R4 was given by a person who did notconduct the inquiry therefore the decision of the 1st respondent basedon that recommendation is illegal and should be quashed.
The Counsel for the 1st respondent conceded that therecommendation 1R4 was made by M.N.S. Fernando, DeputyCommissioner of Labour (Termination Unit) and he made thisrecommendation after studying the proceeding that took place beforethe 2nd respondent. The 1st respondent has not given anyexplanation why the recommendation was not submitted by theinquiring officer and why it was submitted by another officer who hasnot held the inquiry.
In Kundanmals Industries Ltd. v Wima/asena Commissioner ofLabour and others<1) J.A.N.De Silva P/CA (as he then was) held:
"I see no serious objection to the Head of the Departmenttaking a final decision having considered the evidencerecorded and documents available to him on the questionthat has to be decided. In the circumstances I state thatthere is no merit in this submission. There is no materialavailable to establish that the 1st respondent mechanicallyadopted the recommendations without giving his mind tothe evidence and documents. The power to delegate
92Sri Lanka Law Reports[2008) 2 Sri L.R
hearing under the Termination of Employment of WorkmenAct No. 45 of 1971 was considered and accepted in thecase of Nagalingam v Lakshman de Mef2L"
In Nagalingam v Lakshman de Mel, Commissioner of Labour(supra). Sharvananda J. with Tennekoon, C.J. and Gunasekera J.agreeing held:
"Mr. Jayawardena, appearing for the petitioner, urged twogrounds in support of his application.
One ground was that the inquiry in to the 3rd respondent'sapplication under Section 2 of the Act was conducted by the2nd respondent and that in the premises the 1 st respondenthad no jurisdiction to make the order complained of. Section12 of the Act provides that the commissioner shall havepower to hold such inquiries as he may consider necessaryfor the purposes of the Act. Section 11(2) authorises thecommissioner to delegate to any officer of the LabourDepartment any power, function or duty conferred orimposed on him under the Act. Hence, it was lawful for theCommissioner to have delegated to his assistant, the 2ndrespondent the function of holding the inquiry into the 3rdrespondent's application. The ultimate order dated 28thMarch, 1974, (P12), though it has gone under the hand ofthe 1 st respondent, was in fact, as a perusal of the originalrecord disclosed, made on the recommendation of the 2ndrespondent. In the circumstances, there is no substance inthis objection. In fact, the Counsel for the petitioner, when itwas pointed out to him that the order only embodied thedecision of the 2nd respondent, did not press the matterfurther."
The instant case is distinct from the above two cases, in this casethe 1st respondent delegated the power to the 2nd respondent to holdan inquiry and the 2nd respondent had held the inquiry but he had notsubmitted a recommendation to the 1st respondent who made the saidimpugned order. The recommendation on which the 1st respondentrelied was submitted by one M.N.S. Fernando, Deputy Commissionerof Labour (Termination Unit) but he did not inquire the said case at anystage. It appears that he had submitted the recommendation afterperusing the said inquiry proceedings and documents.
QCPeople’s Bank and others93
Alternatively, there is nothing to show that the 1st respondentaddressed his mind to the evidence, the documents produced at theinquiry and the issues involved. In other words the 1 st respondent hadmade an order on a recommendation which was made by a personwho has not held the inquiry. It is in violation of the principle that "hewho hears must decide" and as such the order is ultra vires.
For this reason I set aside the order of the 1 st respondent dated
marked P17. The application of the petitioner for writ ofcertiorari is allowed without costs.
This order will not preclude the respondent to make an order onthe recommendation of the inquiring officer of the said inquiry or tohold a fresh inquiry.
PANDA TOYS EXPORTS (PVT) LTD v. COMMISSIONER -GENERAL OF LABOUR AND OTHERS