BRITISH COUNCIL v. COMMISSIONER OF LABOUR

034-SLLR-SLLR-2003-V-3-BRITISH-COUNCIL-v.-COMMISSIONER-OF-LABOUR.pdf


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BRITISH COUNCILvCOMMISSIONER OF LABOURCOURT OF APPEALTILAKAWARDENA, J.WIJEYARATNE, J.
CA 1229/2000JULY 23, 2003
Writ of Certiorari – Employees Provident Fund Act, No. 15 of 1969 – No liabil-ity to pay E.P.F. by charitable institutions prior to 1991 – Income TaxOrdinance, Amendment Act, No. 44 of 1958 – Charitable Institutions – TrustOrdinance – Section 99 – British Council – Is it a charitable Institution?
The 3rd respondent a former employee of the petitioner had commencedemployment as a Librarian in 1965 and had retired in March 1996. The 3rdrespondent claimed EPF contributions from 9.3.1965 to 31.12.1983. The 1st
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respondent directed the petitioner to pay the said contribution.
Held:
In terms of the Regulations to the EPF Act, No. 15 of 1969 there is holiability to make EPF contributions with regard to persons employed inany charitable institution or any institution maintained solely for the pur-pose of religious worship or social service. '
Petitioner is a charity under the Charitable Act 1960 (English). It is clearthat the Council is established for the purpose of advancement ofknowledge and for developing closer cultural relations. These objec-tions fall within the definition “Advance of education or knowledge, andbeneficial or of interest to mankind (Trust Ordinance)”. Therefore, it isapparent that the British Council is a charitable institution and is notliable to make contributions to the EPF of the 3rd respondent for theperiod 1965 to February 1984.
The amendment introduced in 1991 to the EPF Act, provides that EPFcontributions should be paid in respect of employees employed incharitable institutions, if such institution employs over 10 persons. Theamendment does not apply to the instant case.
APPLICATION for a writ of certiorari.
Cases referred to:
/RCv Pemsel – 1891 AC 531
IRC v Educational Grants Association Ltd. – 1967 3 WLR 41.
W.K.A. Fernando v British Council- CA 213/90 – not followed.
Dr. Jayampathy Wickremaratne P.C. with Ms Pubudini WickremaratneM.R. Ameen S.C., for 1st and 2nd respondents.
3rd respondent absent and unrepresented.
Cur. adv.vult.
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September 18, 2003
SHIRANEE TILAKAWARDANE, J. (P/CA)Vide Journal Entry dated 16/07/2003. Parties have agreed toconsolidate C.A. 1228/2000 and 1229/2000 as one judgment.
The petitioner has preferred this application seeking a writ ofcertiorari to quash the determination of the 2nd respondent dated23/05/2000 (P12) and also to quash the final notice dated25/08/2000 (P14). The petitioner has also prayed for a writ of pro-hibition restraining the 1st and 2nd respondents from enforcing thedetermination of the 2nd respondent dated 23/05/2000. It has beenadmitted by all parties that the petitioner is a body corporate dulyestablished by Royal Charter in 1940 in the United Kingdom and asa charity under the United Kingdom Charities Act of 1960. The 3rdrespondent, a former employer of the Petitioner had commencedemployment as a librarian in or about 1965 and had retired on31/03/1996. On or about 1997, the 3rd respondent by letter dated04/06/1997 sent to the Director of the Petitioner Council, hadclaimed the arrears of contributions to the Employees ProvidentFund in respect of the period 1965 to 1984. The 3rd respondenthad thereafter made a complaint to the 1st respondent by letterdated 27/09/1997 alleging that the petitioner had failed to makeE.P.F. contributions in respect of the 3rd respondent from09/03/1965 to 31/12/1983.
Parties agreed that the only issue that has to be decided inthis case is whether the petitioner can be considered as aCharitable Institution for the purpose of making E.P.F. contribu-tions in respect of the 3rd respondent prior to the amendmentintroduced in 1991 to the Employees Provident Fund Act.Regulation 38 (d) made under the Employees Provident Fund Actpublished in the Government Gazette No, 14936 dated11/12/1970 provides that there is no liability to make contributionsto the Employees Provident Fund by Charitable Institutions inrespect of employees of such institutions. However the amend-ment introduced in 1991 provides that E.P.F. contributions shouldbe paid in respect of employees employed in CharitableInstitutions, if such institution employs over 10 persons (VideGovernment Gazette bearing No. 653/16 dated 14/03/1991).
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It is admitted that the petitioner had commenced making con-tributions to the E.P.F. on a voluntary basis with effect from01/01/1984 and the 3rd respondent also opted to contribute to thesame when it was offered to her.
According to the Royal Charter the objects of the aforesaid 1stpetitioner Council are to promote a wider knowledge in the UnitedKingdom and to develop closer cultural relations for the purpose ofbenefiting the British Commonwealth. The Charter further providesthat “the income and property of the British Council wheresoeverderived shall be applied solely towards the promotion of the objectsof the British Council as set forth in this Charter, and no portionthereof shall be paid or transferred directly or indirectly by way ofdividend, bonus or otherwise howsoever by way of portion to themembers of the Council.”
In terms of the Regulations dated 11/12/1970 (contained inGovernment Gazette 14936 adverted to above) the EmployeesProvident Fund Act, No. 15 of 1969, there is no liability to makeE.P.F. contributions with regard to persons employed in anyCharitable Institution or any institutions maintained solely for thepurpose of religious worship or social service. The Amending Act,No. 44 of 1958 to Income Law Ordinance defines the CharitableInstitution as a trustee or trustees of a trust or a corporation estab-lished for a charitable purpose only or engaged solely in carryingout a charitable purpose. Charitable purpose is defined as a pur-pose for the benefit of the public or any section of the public in oroutside Ceylon or any of the following categories.
The relief of poverty.
The advancement of education or knowledge
The advancement of religion or the maintenance of reli-gious rites and practices.
Any other purpose beneficial or of interest to mankindnot falling within any of the preceding categories.
Section 99 of the Trust Ordinance defines charitable trust as“for the benefit of the public or any section of the public within theisland of any of the following categories.
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for the relief of poverty; or
for the advancement of education or knowledge; or
for the advancement of religion or the maintenance ofreligious rites and practices; or
for any other purposes beneficial or of interest tomankind not falling within the preceding categories.”
Even when perusing the objectives of the petitioner Council itis clear that the Council is established for the purpose of advance-ment of knowledge about the United Kingdom and for developingcloser cultural relations. These objectives fall within the definitions 80“advancement of education or knowledge and beneficial or of inter-est to mankind.”
Moreover the petitioner is also registered as a charity underthe Charities Act No.1960. (Mohamed Ramjohn, Soucebook onLaw of Trusts Chapter 15 Page 509 states that “the effect of reg-istration creates the conclusive presumption of charitable status.”Section 4 (1) of Charities Act 1993 provides “an institution shall forall purposes other than rectification of the register be conclusivelypresumed to be or to have been a charity at any time when it is orwas on the register of Charities.”90
Lord McNaughten in IRC v Pemse/(1) defines charitablepurposes comprising of four principal divisions. These are trustfor relief of poverty, trust for the advancement of education,trust for the advancement of religion and trust for other purpos-es beneficial to the community.
Lord Denning in IRC. v Educational-Grants AssociationLimited2) states “A long line of cases show that a trust is for thepublic benefit if it is for the benefit of the community or section ofthe community.” The objectives of the petitioner provided for in theRoyal Charter falls under the categories, the advancement of edu-100cation and purposes beneficial to the community.
It is to be noted that in the case of W.K.A. Fernando v TheBritish Council <3)(C.A. Application bearing No. 213/90) Court hasnot addressed the issue whether the petitioner is a Charitable
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Institution which should have exempted the petitioner from making. contributions to the E.P.F.
Therefore this Court finds that the petitioner is a CharitableInstitution and is not liable to make contributions to the E.P.F. inrespect of the 3rd respondent for the period 1965 to February 1984.Accordingly, the application of the petitioner is allowed and this 110Court grants writ of certiorari quashing the determination of the 2nd .respondent dated 23/05/2000 and the final notice dated 25/08/2000issued in pursuance of the said determination.- The application istherefore allowed with costs in a sum of Rs. 5000/-.
WIJEYARATNE, J. – I agree.
Application dismissed