BANK OF AMERICA v. ABEYGUNASEKERA

032-SLLR-SLLR-1991-V-1-BANK-OF-AMERICA-v.-ABEYGUNASEKERA.pdf


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Bank of America v. Abeygunasekera
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BANK OF AMERICAV.
ABEYGUNASEKERA
COURT OF APPEAL,
A. DE Z. GUNAWARDENA, J.
C.A. 179/81 & C.A. 188/87L.T. 8/1101/86
JUNE 27 AND JULY 10. 1991
Industrial dispute – Industrial Disputes Act – Termination of services – Loss ofconfidence – Onus of proof – Compensation in lieu of reinstatement – Just and faircompensation.
The services of the Applicant – Appellant who was employed as an Executive at theBank of America, were terminated, on the ground that the Bank has lost confidencein the Applicant – Appellant. The Bank alleged five “failures" on the part of theApplicant – Appellant and also made an allegation of insubordination to justify thedismissal of the Applicant Appellant.
Held:
That the "failures" relied on by the Bank to justify the termination were notconsidered serious by the Bank at the time they occured, and it is unreasonablefor the Bank to rely on them subsequently to justify the dismissal.
That an inference of insubordination is not warranted on the facts andcircumstances proved in the case.
That it is necessary for the employer to lead evidence of facts and circumstancesfrom which loss of confidence can be proved, directly or inferentially.
Per Gunawardana J.; "it must be pointed out that the mere assertion by anemployer is not sufficient to justify the termination of a workman on the groundof loss of confidence. When such an assertion is made it is incumbent on theLabour Tribunal to consider whether the allegation is well founded."
The amount that should be awarded as compensation should not be mechanicallycalculated on the basis of the salary a workman should have earned till hereached the age of retirement. The relevant factors that should be taken intoconsideration in arriving at what is just and fair compensation are:-
(i) the immediate monetary loss to the workman, (ii) the prospective and futurelosses, and (iii) the retirement benefits.
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Cases referred to:
The Calendonian (Ceylon) Tea and Rubber Estates i,td. v. J.S. Hillman 79(1)NLR 421, 435
Ceylon Transport Board v. Wijeratne 77 NLR 481
Belgama v. Co-operative Wholesale Establishment S.C. 64 and 73/71 – S.C.Minutes of 13.12.1971.
Browns Groups Industries Ltd. v. C.M.U. – C.A. 371/84 – C.A. Minutes of31.3.1988.
M.A. Jayasuriya v. Sri Lanka State Plantations Corporation S.C. Appeal No. 9/89 – S.C. Minutes of 30.5.1991
APPEAL from judgment of the Labour Tribunal.
H.L. de Silva, P.C. with Motilal Nehuru P.C. and P.M. Ratnawardane for applicant -appellant
S.L. Gunasekera for respondent -respondent..
Cur. adv. vult
10 September, 1991
A. DE Z. GUNAWARDANA, J.
There are two appeals in this case, against the order made by theLabour Tribunal on 2.4.1987. One appeal is by the Workman-Applicant, Vevil R. Abeygunasekera (hereinafter referred to as theApplicant) bearing C.A. No. 179/87 and the other C.A. No. 188/87,by the Employer-Respondent, the Bank of America (hereinafterreferred to as Respondent). The Applicant, by his appeal, is seekingto get the compensation awarded to him by the said Order,enhanced. The Respondent is moving by way of appeal to have thesaid Order set aside ancf the application of the Applicant to theLabour Tribunal, dismissed. Both these appeals were arguedtogether.,
The Applicant was employed by the Respondent Bank with effectfrom November 16, 1981 as an Executive. At the beginning, theBank was pleased with his work performance and his probationaryperiod of 6 months was shortened to 1 month and 3 weeks, andwas confirmed from January 11, 1982. According to the Respondent,the work performance of the Applicant had thereafter declined and
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the Applicant was relieved of several of his duties. However, he hasreceived a number of salary increases, though not of the same scaleas some of the other employees.
On January 21, 1986 around noon the Assistant Vice President(operations) of the Respondent Bank, Mr. Me Coy has called up theApplicant to Trevor Perera's table, another Executive of the Bank,and in the presence of another lady officer, had asked the Applicantwhether he signed certain Bank Return Forms. When the Applicantsaid "Yes", Mr. Me Coy had then angrily asked him whether thoseforms do not indicate, where provision is made for the signature isfor the Manager to sign. The Applicant had explained that he hadsigned "for the Manager" and not "as the Manager". He had addedthat he had been signing those returns during the past two years,as required by the previous management, and continued that practiceupto then. Mr. Me Coy had then come upto the Applicant and said,"you fucker, you should not have signed it" and dashed the paperson Trevor Perera's table and had walked away to his office. Mr. MeCoy has in his affidavit filed in this case has admitted having usedthe said words in "utter exasperation as this latest instance of theApplicant having acted in utter disregard of both my (his) instructionsas well as written Bank Policy procedures and written instructions,…"
After this incident although the Applicant had tried to discuss thismatter with Mr. Me Coy and with Mr. Tengg, the Vice President andManager, he had not been given an opportunity by both of them.The following day the Applicant was relieved of all his normal duties.He was required to make a thorough review of the StandardProcedure Manual consisting of 9 volumes containing the Bank.Procedures and compare each requirement with what is being done.The next afternoon Mr. Me Coy had called the Applicant to his roomand suggested that the Applicant should resign as he would not beable to get another job if he is "fired”. This suggestion the Applicanthad rejected. Thereafter by letter dated January 30, 1986 (markedA6) the Applicant was suspended from his duties with immediateeffect, on full pay. The Applicant has replied the said letter by hisletter dated January 31, 1986 (marked R28). In that letter he hadexplained the incident that took place on January 21, 1986, thesubsequent steps taken against him and had taken up the positionthat his suspension from work, is totally unjustified. In reply, the Vice
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President Mr. Tengg by his letter dated February 20, 1986, (markedR29) has stated that the suspension of the Applicant from work isjustified, and that the Bank has lost confidence-in the Applicant toperform his duties, satisfactorily. Therefore his services wereterminated with immediate effect by that letter.
On 2nd March 1986 the Applicant made an Application to the LabourTribunal against the said dismissal asking for re-instatement with backwages or in the alternative for compensation in lieu of re-instatement.The Respondent in its answer admitted termination and sought tojustify it on the basis that it has lost trust and confidence in theApplicant due to extremely unsatisfactory work performance andconduct of the Applicant. In paras, 3.1 to 3.4 of the said answer thecircumstances under which the Applicant's services were terminatedhave been set out.
At the inquiry in the Labour Tribunal the Applicant did not giveevidence but has produced documents marked A1 to A5. Mr. Me Coyhad filed an affidavit on behalf of the Respondent and was subjectto cross-examination by the Applicant's Counsel. Miss Amal Perera,an employee of the Bank also gave evidence, and produced certaindocuments. The documents marked R1 to R35 and the affidavit ofMr. Me Coy marked "X" were produced on behalf of the Respondent.The Labour Tribunal by its Order dated April 2, 1987 has held thatthe termination of the services of the Applicant was unjustified, butawarded only one year's salary as compensation to the Applicant,calculated at Rs. 93,864/-. This appeal is from the said Order.
The learned Counsel for the Applicant submitted that,
"the N.P.L. forms which were sent both quarterly and at the endof the year, to the Bank's headquarters, had for the previous twoyears been signed by the Applicant himself for the Manager "asrequired by the Management without any question being raisedas to its propriety and therefore did not warrant this outburst fromMe Coy."
The learned Counsel for the Applicant pointed out that, Mr.Tengg,the Manager, does not deny even in his letter dated February 20,1986 (marked R29) that the Applicant had previously signed thesaid Forms, "for the Manager". "There is also no evidence to show
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that such signing was queried earlier. The learned Counsel raisedthe question as to why Mr. Tengg had never called for these Formsfor his signature, if they were so important, and had to be signedpersonally by the Manager. The Applicant appears to have signedthese Forms at least on eight previous occasions but no queryseems to have been raised either by Mr. Tengg or the Headquartersin San Francisco. Hence, the learned Counsel for the Applicantsubmitted that this was spotted as a result of the "nit picking"approach of Mr. Me Coy and there was "absolutely no ground forMr. Me Coy to rave and rant in this unseemly manner."
The learned Counsel for Respondent conceded that,
"… it is no doubt correct that the Applicant had not beenpreviously found fault with for signing reports without authority."
However, he argued that Applicant's conduct in this instance shouldbe related to the repeated instances of the Applicant's disobedienceof instructions, previously. He added that, therefore, the gravity ofthe offence and the penalty therefor should be enhanced due to hispast record. He further pointed out that specific instructions havebeen given by, documents containing instructions, marked R17 andR17A, requiring every employee signing any document to beabsolutely sure that he is authorised to do so. He submitted that itwas in this background that Me Coy acted in the way he did and,
".. not with malice aforethought to humiliate or insult but throughsheer exasperation at the unbelievable obtuseness of theApplicant who had displayed a kind of incurable allergy tofollowing instructions."
Thus it is seen that Applicant had signed "for Manager" in the saidForms at least on eight occasions, prior to Mr. Me Coy detectingthe flagrant violations of the Bank's procedures. It is difficult toimagine how such a serious violation of a rigid requirement had beenpermitted, for such a long time, especially in view of the evidenceof Me Coy that following of Bank procedures have been closelymonitored by him. In fact in his evidence he asserted that becauseof his effective supervision, the branch audit rating for Sept. 1985,was one of the highest in Bank of America, in Sri Lanka. (Vide page71 of the brief.) In this context it is pertinent to note that at page44 of the brief when Me Coy was asked whether,
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"According to R17 have you given any specific instructions thatthe Applicant was not entitled to sign "For Manager".
The answer given by Me Coy was that, "There is no specificreference to these forms". This clearly shows that documents R17and R18 gave general instructions and had not made any referenceto the matter in issue directly, namely as to whether Applicant couldhave signed the said Forms "for the Manager".
It is strange that Mr. Tenge, the Manager, also had missed checkingon this matter, as it was solely the function of the Manager,according to what Mr. Me Coy had stated in his affidavit. Mr. MeCoy has insisted in his evidence that even he could not have signedthe said reports "either on his own behalf or for or on behalf of theManager". (Vide page 178 of the brief.)
In spite of the seriousness of the violation of the procedure, asalleged by Mr. Me Coy, it is significant that Headquarters of the Bankto which the said forms were sent, had not raised any query aboutit. This position is confirmed by the following evidence of Mr. Me Coy,
"Q. Have you got a letter from San Francisco Head Office thatMr. Abeygunasekera should not have been allowed to sign thesereports?
A. No." (Vide page 74 of the brief).
When one views the act of the Applicant of signing the said Forms,in the light of these circumstances, the gravity and seriousness thatMr. Me Coy tries to attach to the said act of Applicant, is muchlessened. However the learned Counsel for the Respondent hasinvited this Court to consider the said act of the Applicant in thebackground of his previous conduct, as it would then enhance thegravity of the offence. On the other hand the learned Counsel forthe Applicant submitted that once Mr. Me Coy realised that thecharge of signing said Forms, "was a tenuous ground on which todismiss the Applicant, he was obliged to delve into past history inorder to make out a case that the Bank had lost confidence in theApplicant". In view of the said contentions by the learned Counsel,it would be incumbent on this Court to look at the past record ofthe Applicant in order to assess the merits of the said arguments.
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In this context it is significant to note that the letter informing theApplicant of his suspension from work (marked A6) dated January30, 1986, which is 9 days after the said incident with Mr. Me Coy,does not state any ground as to why the services of the Applicanthad been suspended with immediate effect. If the signing of the saidForms was such a glaring and grave error it would have been mostappropriate to have mentioned it in the first intimation to theApplicant.
The letter of termination alleges that Applicant is guilty of "grossinsubordination" because Applicant refused to sign the counsellingmemorandum on January 23, 1986. It is also stated in the said letterthat “the purpose of obtaining your signature on the original was onlyan indication that the discussion was held. "However, it appears thata different, if not a second interpretation, had been given to the sameact of the Applicant not signing the said memo when in the latterpart of the same letter it is stated that, "By your refusal to sign thecounselling memorandum you have also rejected the management'swarning to correct the failures detailed therein. " Thus this allegationseems to contradict the Respondent's own assertion that signing ofthe Counselling Memorandum was only intended for the purpose ofshowing that a discussion was held. If that be the position of theRespondent it could be construed as an additional ground for theApplicant, not to have signed the said memo.
In explaining why the said memo was not signed by the Applicant,learned Counsel for the Applicant submitted that if obtaining thesignature on the said memo was only for the purpose of showingthat a counselling session was held in the presence of the Applicantand not for authenticating the contents of the said memo, all thatwas necessary was for Mr. Me Coy to call in Mr. Tengg or Mr.Trevor Perera to be a witness to that fact. He argued that the saidcounselling session was something more than a corrective interviewalthough the said memo in its column “Type of Interview", indicatedit to be a corrective interview. He added that it was indeed an “ExitInterview". He pointed out that when the Applicant declined to signthe said memo and offered to send in his own comments later, whatMr. Me Coy should have done was to have noted that in the sheetand got the Applicant to countersign that minute. He further pointedout that the said memo contained a false statement, in that it stated,"As discussed with you on 21st January '86 you have failed to meet
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one of your basic job objectives, of accurate compliance with bankpolicies.” There was according to the learned Counsel no discussionon January 21, 1986, except the words of filthy abuse. This is borneout by the letter of the Applicant dated January 31, 1986, markedR28. Therefore, the learned Counsel for the Applicant submitted thatcharge of insubordination is not maintainable.
The learned Counsel for Respondent submitted that Applicant wasrequired to sign the said memo “purely for the purpose of 'indicatingthat the discussion was held'." He went on to add that, his signature"does not connote his agreement with comments set out therein" andwould not amount to a confession.
However considering the different interpretation given to his notsigning, which I have referred to earlier, the alternatives that wereavailable to Mr. Me Coy to record the refusal to sign the said memo,the false statement that is alleged to be contained there in and thenature and circumstances under which the said interview was held,may have given reasonable apprehension to the Applicant that hispossible defences may be affected, if he signed it. Therefore, in thecircumstances, the Applicant appears to have acted with a view ofself protection, than in defiance of authority. Hence his conduct wouldnot warrant an inference of insubordination.
The said letter of termination also referred to five failures on the partof the Applicant, in order to bring his past record into focus andthereby justify his dismissal. The fifth failure is the failure of theApplicant to have obtained prior review and approval of the Manager,before he signed the said year end reports. As I have already dealtwith that matter I now propose to deal with the other four 'failures'.
The first referred to therein is the failure of the Applicant to, “adhereto your clearly defined expense delegation of authority and lapsessubsequent to being warned." These discrepancies are evidenced bythe documents produced marked R5A to R5E, (vide brief pages 310to 320) which are for months January '85 to May '85 and (at page200 of the brief) document marked R5, for June '85. The learnedCounsel for the Applicant submitted that if these discrepancies areso serious, how come, that further delegation of authority to expendhad been given on August 12, 1985 by document marked R4(videbrief page 194). The learned Counsel for the Respondent has
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countered this argument by showing that after Mr. Me Coy preparedR5 and R5A to R5E, and thereby discovered the discrepancies inthe expenditure, the authority given on 12.8.1985 had been withdrawncompletely, on 2.9.1985, which is within such a short period as threeweeks.
However what is important in the context is the attitude adopted bythe Bank towards this lapse. It is seen from the comment made byMr. Me Coy himself in the Performance Evaluation Report (markedR19, vide brief page 244) that “The exceptions appear to have beenunintentional". In the light of this comment, the learned Counsel forthe Applicant submitted that, the Bank took into account the fact thatsuch excesses were unintentional when it gave the Applicant ageneral rating of having fully met all the job requirements. He furtherraised the query as to how the Bank could, "now convert omissionswhich were not considered serious then, into serious irregularities inFebruary 1986."
The learned Counsel for the Respondent submitted that the Applicanthad exceeded his authority 98 times, in 6 months. The expenditureso incurred by the Applicant is Rs. 294,933/-. However it is pertinentto note that another employee of the Bank one Kumar Weerasooriyahas incurred a much larger amount totalling to Rs. 526,951/- abovethe limit, authorised for him. However, there is no evidence that anyaction was taken against any employee for such a lapse, least ofall against the said Weerasooriya. Furthermore when one actuallyexamines the items on which the said expenditure had been incurredby the Applicant, it appears that they were for the daily needs ofthe Bank, and in some instances for the requirements of the ManagerMr. Tengg himself, like the payment of his visa tax, and for thepayment for flowers sent by him. (vide brief page 314).
In the light of the above circumstances and the attitude adopted bythe Bank, in the first instance, towards the said lapse it is my viewthat it is unreasonable for the Bank to now make it a ground tojustify the dismissal.
The second "failure" urged in the said letter of termination is, “failureto seek proper approval for the overtime worked by your (his) staff".The document marked R7 dated February 7, 1985 indicates thatovertime can be permitted only with the prior approval of Mr. Me Coy.
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By letter dated May 1985 which was produced marked R9, Mr. MeCoy has requested the Applicant to. explain why he had authorisedovertime in the case of a clerical' employee named Priyadarshi. TheApplicant has in his reply (marked R10) explained why it wasnecessary for that employee to have worked overtime to completethe work in hand, and that it had just slipped his mind, to get priorapproval. Mr. Me Coy had apparently accepted the explanation andreplied by letter R11, stating that, "This is no big deal, but a reminderabout overtime …" Again by letter R12 dated September 2, 1985 Mr.Me Coy had called for explanation from the Applicant as to why heauthorised overtime in respect of two employees. The Applicant hasgiven a detailed explanation of the circumstances in his reply (R12A) dated September 3, 1985 and pointed out that Mr. Me Coy wasaware of the situation. Mr. Me Coy had not replied this letter. Thelearned Counsel for the Applicant submitted that this shows that Mr.Me Coy had accepted the explanation. However, the learned Counselfor the Respondent has pointed out that although Mr. Me Coy didnot reply the said letter, he has in his affidavit at paragraph 4.3stated that he did not accept the explanation, and this was1 notchallenged in cross-examination. If Mr. Me Coy did not accept thesaid explanation, reasonable conduct would have been to reply thesaid letter of the Applicant, at that time, indicating his disapproval.In addition the learned Counsel for the Applicant has submitted thatthis “failure" was not considered such a serious matter as it had noteven been referred to in the Performance Evaluation Report (markedR19) and that the Bank is, "virtually 'scraping the barrel' in order tofind material on which it could justify the termination." Thus it appearsthat present position of the Bank, that the said lapse is a seriousfailure, is not borne out when one considers the abovecircumstances.
The third “failure" referred to in the said letter of termination is,“failure to review branch mail handling procedures despite complaintsby other staff." In this regard it is to be noted that The PerformanceEvaluation Report made in September 1985, merely states that theApplicant “had not fully taken charge of resolving departmentalproblems e.g. mail procedures." It is significant that it is so statedin the said report under the heading "suggested improvements". Such"failure” has not prevented the Applicant getting an overallperformance rating of fully met. Mr. Me Coy has in his affidavit filedin the Labour Tribunal referred to the delays in decoding telexes at
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paras 5.1 and 5.2. He also refers to letters R13 dated March 25,1988 and R14 dated May 14, 1985. The Applicant has by R14Aexplained in detail the circumstances under which the delays haveoccured. Mr. Me Coy does not join issue on this. There had beenno complaints after that. Thus it appears that the Bank has not then,attributed the same seriousness to this matter as it is seeking to donow, to justify the termination.
The fourth "failure" referred to in the said letter of termination is that,"nine objectives of the Performance Plan personally prepared by you(him) have not been achieved." The learned Counsel for theApplicant argued that if they were such serious failures the Applicantwould not have been given the job rating "fully met". Therefore hesubmitted that the inference to be drawn from giving such a jobrating is that, the non achievement of the said objectives, was notconsidered blameworthy or culpable to warrant any adverse rating.He further submitted that if they were not considered serious failuresin September 1985, how could the Respondent Bank fall back onthem to substantiate a charge of incompetence in February 1986.
The learned Counsel for the Respondent submitted that,
"… the rating 'fully met' does not carry with it the connotation of itsordinary grammatical meaning, but that the person receiving thatrating was a 'borderline case' who was barely surviving in hisemployment."
He further pointed out that "fully met" was the 4th of 5 possiblegradings and that if the overall rating of the Applicant was the 5thrating i.e. "did not meet", the bank's policy was to terminateemployment.
However, it is significant to note that in the said PerformanceEvaluation Report (marked R19) in the column overall rating, inregard to the remark "fully met" the following note had been made,
“While several important objectives were not achieved, many ofthe objectives were met and most basic job requirements wereachieved resulting in the overall rating."
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This amplification on the comment "fully met" clearly shows what thesaid comment meant to the Bank. It is also implicit in that explanationthat the Applicant had met most of the basic job requirements.Furtheremore, it is seen from the said report 'that at least one ofthe said objectives could not be achieved "due to uncontrollablecircumstances". In the light of these circumstances it is reasonableto infer that the Applicant has satisfactorily met the job requirements,as stipulated by the bank.
In the said letter of termination the Bank has also taken up theposition that it had lost confidence in the Applicant, as a result ofthe aforesaid "failures", it must be pointed out that the mere assertionby an employer is not sufficient to justify the termination of aworkman on the ground of loss of confidence. When such anassertion is made it is incumbent on the Labour Tribunal to considerwhether the allegation is well founded. Therefore it would becomenecessary for the employer to lead evidence of facts from which suchan assertion could be proved directly or inferentially.
In this case I have already carefully considered the five grounds or"failures” upon which the employer is seeking to draw such aninference and shown why such alleged "failures" individually orcollectively would not justify the dismissal of the Applicant. In thecircumstances, in my view, it would not be possible for theRespondent to rely on the same failures, to justify its allegation thatit has lost confidence in the Applicant.
In regard to the allegation of loss of confidence it would be relevantto consider the submission of the learned Counsel for the Applicantthat according to document R35, (vide brief page 304C) during theperiod November 1981 to August 1984, which is the period beforeMr. Me Coy came to the Bank, the Applicant had been consistentlyassessed at level 3, which means "Requirements fully met and attimes exceeded". During the same period he earned incrementsranging from 14% to 30% of his salary. However, after Mr. Me Coycame to the Bank the increments had plummeted to 8% to 5% andin the single evaluation he did, the Applicant was rated at Level 4.This the learned Counsel submitted was due to hostile attitudeadopted by Mr. Me Coy and is not a bona fide assessment andtherefore not evidence of a fall in standards.
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On the other hand learned Counsel for the Respondent pointed outthat the grading at Level 3 was the 3rd of 5 possible gradings. Headded that upon a comparison of the salary particulars of theApplicant with the other 6 Sri Lankan Executives show, that evenupto the arrival of Mr. Me Coy on 1.10.1984, the rate of salaryincrease received by the Applicant was one but the lowest. Howeverit must be pointed out that after the arrival of Mr. Me Coy's the rateof increase in salary and the grading of work level of the Applicant,had both gone down.
It has also being alleged that a number of functions were withdrawnfrom the list of duties of the Applicant (marked R1) due to hisincompetence. It is strange that a written communication of such anallegation had not been sent to the Applicant by the Bank. There isno evidence that any counselling session was held, in this regard.Only indication to this effect is an undated, and unsigned minute byMr. Me Coy on document R1. It is significant to note that thedocument through which this change in the duties is indicated to theApplicant (marked R6) is titled "… Realingment of Duties” and notwithdrawal of duties. There is no indication in that document to showthat it had been done due to inefficiency or incompetence of theApplicant. Therefore the learned Counsel for the Applicant submittedthat it was at best a scheme of reorganisation of functions wherebythe Applicant is entrusted with the functions of supervisor Reportingand General Services. However, the learned Counsel for theRespondent argued that,
"The measure of an employer's confidence in an employee can
be gauged largely by the degree of responsibility vested in him.
The more confidence he has in the employee the more
responsibility he will be vested with, vice versa."
But the question is, if in fact the said duties were withdrawn fromthe Applicant due to his inefficiency or incompetence, why did theBank fail to communicate it to him? In addition the learned Counselfor the Applicant has raised the query whether the withdrawal offunctions was due to inefficiency, and if that is so, is it conceivaoiethat R19, the Performance Evaluation Report would not havementioned it? or would the Applicant be given a general rating of"Fully met"? Thus upon a careful analysis of the Respondent'sdocuments and conduct, it is apparent that the allegation of loss ofconfidence cannot be substantiated.
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Therefore upon a consideration of all the facts and circumstancesof this case I am of the view that termination of employment of theApplicant by the Respondent Bank cannot be justified.
The ordinary consequence of my holding that the termination ofemployment of the Applicant is unjustified, would be to order thereinstatement of the Applicant. In fact the Applicant in his applicationto the Labour Tribunal has pleaded so. Sharvananda J. (as he thenwas) has pointed in the case of, The Caledonian (Ceylon) Tea andRubber Estates Ltd. vs. J.S. Hillman (1) that,
"Once it is found that a workman has been wrongfully or illegallydischarged or dismissed, he is normally entitled to claim re-instatement. But this remedy is not absolute or of universalapplication. There can be cases where it might not be expedient,because of the presence of unusual features, to direct re-instatement, and a Tribunal may think'the grant of compensationinstead may meet the ends of justice."
In this case too there is a special feature which prevents this Courtfrom making an order for re-instatemtent, viz., the fact that theRespondent Bank has wound up its business in Sri Lanka. Thereforethe only remedy left in this case is to grant compensation.
Then the question arises for consideration; what is the just and fairamount that should be granted as compensation? Although theIndustrial Disputes Act states that compensation can be paid in lieuof reinstatement, it does not set out the basis on which it has to becomputed. Vythialingam J has stated in Ceylon Transport Board vs.Wijeratne (2) that, "the amount should not be mechanically calculatedon the basis of the salary he should have earned till he reachedthe age of super-annuation."
According to the evidence of Miss Amal Perera the Applicant was29 years of age at the time he applied to join the Respondent Bankin 1981. Therefore at the time of dismissal he would be 34 yearsof age. The normal retiring age being 55, the Applicant would haveserved for 21 years more However, in my view it is unreasonableto calculate as compensation the amount he would have earned assalary for the prospective service period of 21 years. In fact in theinstant case having regard to the circumstances of this case, the
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learned Counsel for the Applicant has claimed compensation for onlyten years.
The Courts and Tribunals have adopted a given number of years'salary, ranging from 1 year to 10 years, as the criterion forcalculation of compensation. For example in Belgama vs. Co-operative Wholesale Establishment (3) one year's salary, inCaledonian Estates Case 7 years salary and in Browns GroupIndustries Ltd. vs. C.M.U (4) 10 years salary, were considered to bejust and fair compensation. However, the amount of thecompensation would depend on the facts and circumstances of eachcase.
In the case of M.A. Jayasuriya vs. Sri Lanka State PlantationsCorporation (5), Amarasinghe J. in discussing as to what mattersshould be taken into consideration in ascertaining fair and justcompensation in a given case has stated that,
"There ought to be at least an approximate computation ofimmediate loss, i.e. loss of wages and benefits from the date ofdismissal upto the date of the final Order or Judgment, andanother with regard to prospective, future loss and a third withregard the loss of retirement benefits, based as far as possibleon a foundation of solid facts given to the Tribunal by theparties."
When one considers the first head stated therein viz. the immediateloss to the Applicant, it appears that he has not found anyemployment upto now. However, the learned Counsel for theRespondent strongly urged that there is no evidence adduced by theApplicant as to whether he is unemployed or his efforts to seekemployment were unsuccessful. It is significant to note that, in thesaid case M.A. Jayasuriya vs. Sri Lanka State Plantation CorporationAmarasinghe J. had taken note of the matters stated in the petitionto that Court and the submission made by Counsel in that regardwhen he stated,
"According to his Petition to this Court dated 25 September 1990,the Petitioner remained unemployed up to that date. At thehearing before us learned President's Counsel stated that theposition remained unchanged."
332Sri Lanka Law Reports(1991) 1 Sri L.R.
In this case too it is evident from the Petition of Appeal filed in thisCourt, and the submissions of the Counsel for the Applicant, at thehearing, that the Applicant is still unemployed. In the instant casethe services of the Applicant were terminated on February 20, 1986,and the Applicant is unemployed upto date which in effect would bea period of nearly 5 years and 7 months. Thus it appears that theApplicant had suffered a loss of income from employment, due tothe wrongful dismissal, during the said period.
The other aspect that is relevant to the computation of compensationis the prospects of future employment. In this regard the verydamaging allegations contained in R29 and the manner of dismissalis very significant. It is especially so in the Banking sector, whereconfidence is required at maximum level, which is the chosen career-line of the Applicant. Thus the prospects of re-employment wouldhave been naturally affected until the Applicant vindicated himselfbefore a judicial body.
There is no evidence in regard to any fringe benefits or retirementbenefits that the Applicant was entitled to, and therefore nocompensation is awarded in that regard.
For the reasons above stated this Court is of the view that it is justand fair to award, a sum equivalent to seven years salary earnedby the Applicant at the time of dismissal, as compensation, in lieuof reinstatement. Accordingly the said Order of the Labour Tribunalawarding one year's salary as compensation is hereby set aside.
This Court hereby makes Order that the Respondent bank shouldpay the Applicant seven years salary as compensation. Accordingto the evidence the salary at the time of termination was Rs. 7822/-per month. Therefore, the total salary for seven years payable ascompensation to the Applicant would be (Rs. 7822 x 12 x 7 =Rs. 657,048) Rupees Six Hundred and Fifty Seven Thousand andForty Eight (Rs 657,048/-). Accordingly, this Court makes Order thatthe said sum of Rupees Six Hundred and Fifty Seven Thousand andForty Eight (Rs. 657,048/-) be deposited with the AssistantCommissioner of Labour, Colombo Central, on or before December10, 1991, to be paid to the Applicant as compensation.
This Appeal is allowed and the Respondent Bank will pay theApplicant costs, fixed at Rs. 5000/-.
CA
333
Premadasa v. Wijeyewardena and Others
In view of the findings in this Appeal, the Appeal No. C.A. 188/87made by the Employer-Respondent – Appellant is dismissed withoutcosts.
Appeal No. 179/81 allowedAppeal No. 188/87 dismissed
PREMADASA
V.
WIJEYEWARDENA AND OTHERS
SUPREME COURTTHAMBIAH, C.J.,
G.P.S. DE SILVA, J. &
RAMANATHAN, J.
S.C. APPEAL NO. 36/91C.A. APPLICATION NO. 736/8917 September, 1991
Writ of certiorari – Status of tenant after decree for eviction during period of stay ofwrit – Right to purchase house under Ceiling on Housing Property Law, No. 1 of 1973after passage of Ceiling on Housing Property Law (Special Provisions) Act, No. 4 of1988 * Withdrawal of application for writ of certiorari – Locus standi
The appellant was a tenant of premises No. 3 Rockwood Place under the 2ndrespondent having earlier been a tenant under his father the 1st respondent who in1979 gifted the premises to the 2nd respondent.
When the Ceiling on Housing Property Law, No. 1 of 1973 came into operation on13 January 1973 the 1st respondent owned 19 houses including No. 3 RockwoodPlace.
On 4.5 1983, the 2nd respondent filed case No. 5639/RE in the District Court ofColombo seeking the eviction of the appellant on the ground of arrears of rent andreasonable requirement. On 4.6.1984 the case was settled. The appellant consentedto judgment – writ not to issue till 31 March 1987. On 19.3.1987 the appellant madean unsuccessful attempt to have the consent judgement revised by the Court ofAppeal.
On 17.5.1987 the appellant sought to chailange the validity of the consent judgementin the District Court itself but did not pursue his application. The issue of writ washowever stayed till 31.11.1987.
On 30 November 1987 the appellant wrote a letter to the Commissioner of NationalHousing, stating that the 1st respondent had made an incorrect section 8 declarationof the number of houses owned by him. under the Ceiling on Housing Property Lawand supported his letter with an affidavit and moved that early steps be taken totransfer the house No. 3 Rockwood Place to him (the appellant) as these premiseswere deemed to have vested in the Commissioner as a surplus house.