024-SLLR-SLLR-1996-1-BROWN-CO.-LTD-SAMARASEKERA.pdf
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11996) 1 Sri L.R
BROWN & CO. LTDV.
SAMARASEKERA
SUPREME COURT.
P.S. DE SILVA, C.J.
KULATUNGA, J. ANDRAMANATHAN, J.
S.C. APPEAL NO. 20/95.
T. COLOMBO NO. 13/11634/89.
C. NO.590/92,
23 JANUARY, 02 MARCH, 03 APRIL, 8 &16 MAY, 1995.
Industrial Dispute – Termination of services – Compensation – Probationer'sservices – Extension of probation.
The principles relating to the service of a probationer are –
(i) Unless the letter of appointment otherwise provides, a probationeris not entitled to automatic confirmation on completion of the period ofprobation. If then he is allowed to continue his service, he continues asa probationer.
Even in the absence of any additional terms and conditions, asimple probation clause confers on the employer the right to extend theprobation.
The employer is not bound to show good cause for terminating aprobationer's service. The Labour Tribunal may examine the grounds ofthe decision only for the purpose of finding out whether the terminationwas mala fide or amounted to victimization or an unfair labour practice.
The question whether the probationer’s services were satisfactoryis a matter for the employer. If cannot be objectively tested. If theemployer decided that the probationer's services were not satisfactory,it would be inequitable and unfair, in the absence of mala tides, to foistthe view of the tribunal on the management.
A suggestion of mala tides is not sufficient. The Tribunal must makea finding that the termination of a probationer's service was actuated bymala tides or ulterior motive.
At the time of the impugned termination of services, the Respondent
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was a probationer. His services were terminated after giving him twoextensions of his period of probation. The fact that such an opportunitywas given would negative the existence of mala tides. In thecircumstances the impugned termination of services was justified andthe Respondent is not entitled to compensation.
Cases referred to:
Hettiarchchi v. Vidyalankara University 76 NLR 47.
Ceylon Ceramics Corporation v. Premadasa (I986) 1 Sri LR 287 (C.A.)
Elsteel Ltd. v. Jayasena S.C. Appeal No. 20/88 – S.C.Minutes of06.4.90.
Moosajees Ltd. v. Rasaiah (I968) 1 Sri LR. 365 (C.A.)
Utkal Machinery Ltd. v. Santi Patnaik A1R I966 S.C. 1051, 1052(1966) 1 LU 398, 400.
Liyanagamage v. Road Construction & Development (Pvt.) Ltd.
S.C. Appeal No. 3/95 S.C. Minutes of 23.08.93.
Shafeeudeen v. Sri Lanka State Plantations Corporation – S.C. AppealNo. 18/93 S.C. Minutes of 18.01.94.
Caitex India Ltd. v. Second Industrial Tribunal, High Court of Calcutta(I963) LU 156.
Ceylon Trading Co. Ltd. v. The United Tea, Rubber and LocalProduce Workers Union (1986) CALR Vol. 1162 (C.A.)
Ceylon Cement Corporation v. Fernando (1990) 1 Sri LR 361 (C.A.)
Swarnalatha Ginige v. University of Sri Lanka S.C. Appeal No. 66/93S.C. Minutes of 23.05.95.
APPEAL from judgment of the High Court.
S. Sivarasa PC. with Gihan Ranawaka for Appellant.
Gamini Senanayake with C.L. Wickremanayake for Respondent.
Cur.adv.vult.
May 19, 1995.
KULATUNGA, J.
The Labour Tribunal, by its order dated 25.08.1992 held that theservices of the Respondent workman had been unjustifiably terminatedand awarded him compensation in a sum of Rs. 396,000/- being threeyears salary. An appeal to the High Court by the employer was dis-missed. The employer now appeals to this Court.
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The workman in his application to the tribunal said that he hadbeen appointed a senior executive under the Appellant on 01.03.88;that his period of probation was twice extended on the ground that hisservices were not satisfactory; and that upon the expiration of theextended period of probation, his services were terminated, with effectfrom 31.05.89. He complained that his services were terminated foralleged failure to increase the turn over in the Electrical Department;but such termination was unjustified in that firstly, an increase in theturn over was not a condition of his employment; secondly, there wasin fact an increase in the turn over during the period of his employ-ment.
The Appellant pleaded that the workman was by his letter of ap-pointment (R1), appointed subject to a period of nine months probationwhich was twice extended as his performance was not upto expecta-tions. Thereafter, his services were terminated, in the best interest ofthe management. The Appellant claimed that the workman was a prq-bationer and was hence not entitled to relief in law or equity, on terrrtj-nation of his probationary services.i
At the inquiry, Clive de Silva, Director Engineering gave evidenceon behalf of the management and also produced documents R1 -R13.He reiterated the defence that the Petitioner was a probationer. Hpmaintained that his services were terminated as his performance wasnot satisfactory.The workman did not give evidence but produced docu-ments A1-A27.
According to the evidence led at the inquiry, the nine months pro-bation under the workman's letter of appointment was due to expire on30.11.1988. Prior to that the Director Personnel, by his report dated28.10.1988 (R13), informed the Director Engineering that as the work-man had not performed satisfactorily, he was unable to recommendhis confirmation. However, the management did not terminate his serv-ices but by letter dated 28.11.88, extended his probation until 15.02.89with a warning that if there was no improvement in his performance hisprobationary services will have to be terminated (R3). There followeda correspondence between the workman and the management in thecourse of which the workman maintained that whilst it was not a condi-tion of his service that he should increase the turn over of his division,
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he had in fact achieved such increase. The management by its letterdated 24.02.89 (R7) informed the workman that his explanations werenot acceptable. R7 added –
"We are however granting a final extension of three months endingon 15th May, I989 of your probationary period, at the end of which wewould decide on your confirmation"
Thereafter, on 12.05.89 the management terminated the workman'sservices, with effect from 31.05.89.
The learned President of the Labour Tribunal held that whilst theworkman's services could have been validly terminated upon the ex-piry of the initial period of probation, the impugned termination afterextensions of probation, was unjustified in that there was no provisionin the contract of employment for extending probation; and that thesecond extension of probation was made nine days after the expiry ofthe period of the first extension.Therefore, the question of probation inthe termination of the workman's services did not arise. Hence, themanagement had to rely on its position that the Appellant had failed toincrease the turn over. On an analysis of the evidence, the Presidentheld that there was an increase in the turn over and on that basis madeorder in favour of the workman. The President also surmised that thefailure to confirm the workman was due to a policy in the company forreducing staff.
The principles relating to the service of a probationer may be sum-marised thus:
Unless the letter of appointment otherwise provides, a proba-tioner is not entitled to automatic confirmation on completion of theperiod of probation. If then he is allowed to continue his service, hecontinues as a probationer. Hettiarachchi v. Vidyalankara University(1)Ceylon Ceramics Corporation v. Premadasa.<*>
Even in the absence of any additional terms and conditions, asimple probation clause confers on the employer the right to extendthe probationary period; Elsteel Ltd. v. Jayasena (3>
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The employer is not bound to show good cause for terminatinga probationer's service. The LabourTribunal may examine the groundsof the decision only for the purpose of finding out whether the termina-tion was mala fide or amounted to victimization or an unfair labourpractice.
Moosajees Ltd. v. Rasaiah™, Utkal Machinery Ltd. v. SantiPatnaiKS), Liyanagamage v. Road Construction and Development (Pvt)Ltd.®, Shafeeudeen v. Sri Lanka State Plantations Corporation.™
The question whether the probationer's services were satisfac-tory is a matter for the employer. It cannot be objectively tested. If theemployer decided that the probationer's services were not satisfac-tory, it would be inequitable and unfair, in the absence of mala tides, tofoist the view of the tribunal on that of the management.
Caltex India Ltd, v. Second Industrial Tribunal High Court of Cal-cutta. ™ Ceylon Trading Co. Ltd. v. The United Tea, Rubber and LocalProduce Workers Union,™ Ceylon Cement Corporation v. Fernando .(,0)
A suggestion of mala tides is not sufficient. The tribunal mustmake a finding that the termination of a probationer's service was ac-tuated by mala tides or ulterior motive. Swamalatha Ginige v. Univer-sity of Sri Lanka.1™
In Shafeeudeen's case (supra) it was urged that Moosajees casehas, by its failure to consider the existence of wide power in the La-bourTribunal under sections 31 B(4) and 31C(1) of the Industrial Dis-putes Act, denuded the rights of a probationer as against a confirmedworkman when in the light of the definition of "workman" in section.48there was no justification for doing so. This Court held that there is noerror in the decision in Moosajees case and that the said decision iswithin the law as stated in Liyanagamage's case (supra) which adoptedthe decision in Utkal Machinary Ltd. case (supra). The Court also ob-served that even though a decision has to be just and equitable whetheror not the workman is a probationer, the common law rights of theemployer in respect of a probationer cannot be totally disregarded. Asimilar argument as was advanced in Shafeeudeen's case appears inthe written submissions for the Respondent. Learned Counsel appearsto submit:
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that the prevailing law is more favourable to a probationerthan the law as set out in the decisions cited at 4 above; and
that in terms of the law; justifiability of the termination of aprobationer's service should be decided on the same principlesof equity applicable to a permanent employee.
I am unable to agree with these propositions.
The workman in the instant case was subject to simple probationclause which inter alia, provided that "confirmation of employment atthe end of the probationary period shall be in writing and at the discre-tion of the company". Applying the above principles to the facts, Ihold that the Labour Tribunal misdirected itself when it held that theAppellant could not validly extend the workman's period of probationand that the question of probation did not arise. That question was inthe forefront of the case. But the tribunal failed to decide it.Thereafter,the tribunal proceeded to judge the issue as to whether the workman'sservices were satisfactory, in derogation of the principle that, in theabsence of mala tides, the tribunal cannot foist its own view on that ofthe management.
I hold that at the time of the impugned termination of services, theRespondent was a probationer. His services were terminated aftergiving him two extentions of his period of probation.The fact that suchan opportunity was given would negative the existence of mala tides.In the circumstances, the impugned termination of services was justi-fied and the Respondent is not entitled to any compensation.
Counsel for the Respondent submits that as in Liyanagamage'scase (supra), here too there is evidence of an unfair labour practiceand the termination was so capricious or unreasonable as to lead tothe inference that it had been passed for ulterior motives and not in thebona fide exercise of the power arising out of the contract of employ-ment. In support, he submits that the employer was "motivated by theobjective of reducing staff". However, in Liyanagamage case, the work-man was admittedly an able technical officer with over 15 years expe-rience in his field and the LabourTribunal held that he had been sub-jected to unfair labour practice. There were also numerous facts which
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indicated that the termination of his probationary service was malafide. Here there is no such evidence, no finding, but only a surmise bythe tribunal that the impugned termination was due to a policy in thecompany for reducing staff. Therefore, Liyanagamage's decision is ofno assistance in deciding this case.
The learned High Court Judge has held that by failing to raise apreliminary issue that the applicant could not proceed for failure toaver malice and by contesting the case on the issue as to whether theapplicant's work was satisfactory, the Appellant had submitted to thejurisdiction of the tribunal concerning the ground on which the termina-tion has been justified. Hence the question of malice was irrelevant;and there was no ground to interfere with the order of the tribunal.
The High Court has misdirected itself on the law in approachingthe case as it did. In a case such as this, there is no need for theemployer to raise the matter as a preliminary issue; and no question ofsubmitting to the tribunal's jurisdiction arises if the employer were toreagitate the grounds on which he terminated the services of a proba-tioner. Nor does it relieve the tribunal of its duty to decide the matteraccording to law on the basis of the evidence before it.
For the foregoing reasons, I allow the appeal, set aside the judg-ment of the High Court and the order of the LabourTribunal. The Re-spondent's application made to the tribunal is dismissed. No costs.
G.P.S. DE SILVA, C.J. – I agree.
RAMANATHAN, J. -1 agree.
Appeal allowed.