027-SLLR-SLLR-1995-V-1-CEYLON-MERCANTILE-UNION-v.-CEYLON-STORES-LTD.-AND-ANOTHER.pdf
CEYLON MERCANTILE UNION
v.
CEYLON COLD STORES LTD. AND ANOTHER
SUPREME COURT.
AMARASINGHE, J.
DHEERARATNE, J.
WIJETUNGA, J.
S.C. APPEAL NO. 51/95C.A. NO. 941/84SEPTEMBER 5, 1995.
Industrial Dispute – Termination of services of probationer within the probationaryperiod – Right to strike – Amendment to Section 2 of the Termination ofEmployment of Workmen (Special Provisions) Act, No. 45 of 1971 by Act No. 51of 1988.
The 'confirmed' and ‘probationary’ employees are obviously not similarlycircumstanced. Though both categories are ‘.workmen’ in the sphere of IndustrialLaw, their rights and privileges are not the same.
In the case of the probationer, the employer is not required to show good cause inrespect of termination during the period of probation, so long as he acts bonafide. The grounds of termination can be examined only for the limited purpose ofascertaining whether the employer has acted mala fide or whether suchtermination amounts to victimisation or an unfair labour practice.
A probationer has as much a right to strike as a confirmed workman and theproper exercise of that right cannot place the probationer in jeopardy insofar asthe employer's right to terminate his services during the period of probation isconcerned.
It is axiomatic that a probationer who joins a Trade Union should enjoy all therights and privileges that go with such membership and should not bediscriminated against on the basis of his rank and/or status as a prcL>ationer.
Cases referred to:
Venkatachrya v. Mysore Sugar Co. Ltd. A.I.R. 1954 Mysore 175.
State Distilleries Corporation v. Rupasinghe. SC 91/93 SCM 2.3.1994
Moosajee Ltd. v. Rasiah [1986] 1 Sri L.R. 365.
Ceylon Cement Corporation v. Fernando. [1990] 1 Sri L.R. 361.
Elsteel Ltd. v Jayasena SC 20/88 SCM 6.4.1990.
Brown & Co. Ltd. v. Samarasekera. SC 20/95 SCM 19.5.1995.
Tramp Shipping Corporation v. Greenwich Marine Inc. [1975] 2 All ER 989.
Assam Oil Co. Ltd. v. Its Workmen (1960) 1 LLJ 587 (SC)
National Tobacco Co. of India Ltd. v. 4th Industrial Tribunal (1960) 11 LLJ 175(Cal).
APPEAL from judgment of Court of Appeal.
Gomin Dayasri with Aravinda Aturupana for 2nd Respondent-Appellant.
S. C. Crossette Thambiah with A. Sivendran for Petitioner-Respondent.
Cur. adv. vult.
October 25,1995WIJETUNGA, J.
The 2nd respondent-appellant (appellant) is a Trade Union dulyregistered under the Trade Unions Ordinance. The petitioner-'respondent (1st respondent) is a Company duly incorporated underthe Companies Ordinance. The 1st respondent-respondent (2ndrespondent) was the Arbitrator appointed by the Minister of Labour towhom an industrial dispute between the appellant and the 1strespondent was referred for settlement by arbitration. The appellantand the 1st respondent had entered into and were bound by a validCollective Agreement No. 7 of 1981. The Minister made the referenceto arbitration by his order dated 5.4.83 under the powers vested inhim by Section 4(1) of the Industrial Disputes Act as amended, readwith the Industrial Disputes (Special Provisions) Act No. 37 of 1968.
The matters in dispute between the parties were whether the 1strespondent was justified in –
terminating the services of the workmen referred to inSchedule A who are members of the Ceylon Mercantile Unionby letters dated 15.11.82; and
terminating the probationary employment of the workmenreferred to in Schedule B, who are members of the CeylonMercantile Union by letters dated 19.11.82.
The workmen referred to in Schedule A numbering 8 were initiallyemployed by the 1st Respondent on a casual or temporary basis and
were thereafter given permanent employment with effect from15.11.82, subject to a period of 6 months' probation on the terms andconditions set out in their letters of appointment. One of the saidterms was that they will be required to register the times of arrival anddeparture by punching a Time Card provided for the purpose by the1st respondent. Each of the said workmen signed and returned theduplicate copies of the letters of appointment, as required by the1st respondent, signifying their acceptance of the appointments onthe terms and conditions stipulated therein.
On 15.11.82, seven of the said eight workmen reported for workbut refused to mark their attendance in the manner stipulated in theirletters of appointment. The 8th workman reported for work on thefollowing day, but she too refused to mark her attendance in the saidmanner. The 1st respondent’s Chief Executive called upon the saidworkmen to mark their attendance by punching the Time Cards asstipulated and on their failure to do so, the services of the saidworkmen were terminated with immediate effect.
The appellant Union thereupon called a strike of its members whowere employees of the 1st respondent and the said strike continued
up to 10th April, 1983.
The workmen referred to in Schedule B were 20 in number, whowere also probationary employees of the 1st respondent. Theappellant states that they too struck work as from 10.30 a.m. on16.11.82 as indicated by the Union. The 1st respondent terminatedtheir services by letters dated 19.11.82 (P.6), on the ground that theykept away from work without the prior sanction and approval of themanagement.
The inquiry of the aforesaid arbitration commenced on 13.7.83 andwas concluded on 21.3.84. The 2nd respondent delivered his Awarddated 26.4.84 holding that on the evidence led before him, thetermination of services of the said workmen in Schedules A and Bwas unjustified and granting them the relief of reinstatement withback wages.
The 1st respondent being aggrieved by the said Award made anapplication to the Court of Appeal for a Writ of Certiorari (CA. 941/84)to quash the same.
The Court of Appeal by its judgment dated 27.1,95 held that theAward was bad in law and granted a Writ of Certiorari quashing it.
The appellant sought special leave to appeal to this Court fromthe judgment of the Court of Appeal. This Court granted special leaveto appeal only in respect of the workmen referred to in Schedule B ofthe terms of reference aforesaid, on the following questions of lawas agreed upon by Counsel:-
Was the termination of the 20 workmen referred to in ScheduleB who are probationers justifiable, when the respondentCompany continued in employment the other employees whoparticipated in the same strike?
Can persons holding the status of probationer be victimizedand/or discriminated against in the event they participated in astrike?
If the respondent Company condones the employees who arenot probationers for any act for which a probationer is punished,would it amount to victimization and/or discrimination?
The Court of Appeal in holding the Award of the 2nd respondent tobe bad in law, made reference to the following matters which itconsidered to be errors:-
holding that even though the workmen were probationers, themanagement should yet have asked for their explanation beforethe termination of their services,
considering the matter on the basis of equity without resting iton the evidence,
failure to treat the matter on a just and equitable basis not onlyfrom the point of view of the employees but also from that of theemployer,
not taking note of the fact that it is settled law that the servicesof a probationer can be terminated without any reasons beingadduced unless the action of the management was based onmalice or mala tides.
Learned Counsel for the appellant agreed that the workmen inthe 2nd Schedule were on probation. He complained that all theworkmen who went on strike and returned to work after the strike,other than those on probation, were permitted to continue inemployment; but the services of the probationers were terminated onthe basis that they ‘kept away from work from 17th November, 1982,without the prior sanction and approval of the management’. Hecontended that, under the statutes in the realm of Industrial Law,including the Industrial Disputes Act and the Trade UnionsOrdinance, all workmen are treated equally and uniformly and areentitled to the same protection, whether they be probationers orotherwise. As every workman has a legitimate right to strike, the factthat he is a probationer does not deprive him of that right. It was hissubmission that the 1st respondent had terminated the services ofthose workmen who held the status of probationers purely becausethey held that rank and/or status. He further submitted that theprobationers are also entitled to the benefits of the 'just and equitablerule’ enshrined in the Industrial Disputes Act, in the event thetermination was in consequence of a mala fide reason, victimizationor discrimination. He sought to base his claim of alleged victimizationand/or mala tides on the premise that the employer failed to treat theprobationers and the non-probationers on an equal footing and thatthe probationers’ services have been terminated on the basis of theirrank and/or status. He argued that an employer who treats theemployees on a subjective basis is guilty of mala tides.
He also adverted to the constitutional right guaranteed to everycitizen under Article 14(1)(d) to join a Trade Union. Where, therefore,
a workman has the right to join a Trade Union, the question arosewhether he can be penalized for participating in Trade Union action.He submitted that a probationer enjoyed no lesser rights in thatregard than any other workman. The Court of Appeal had proceededmerely on the basis that where a workman was a probationer, hisservices can be terminated without a reason being adduced, but hadfailed to examine the question of mala tides and victimization andwhether the reason for termination or the punishment meted out wasjustifiable.
On the other hand, learned Counsel for the 1st respondent
submitted that the 20 probationers in Schedule B, who at that timewere not members of the appellant Union, had applied to join theUnion shortly before the strike commenced in order to participate inthe strike and had kept away from work without any intimation to themanagement as regards their absence. The respondent thereuponserved on them the letters of termination aforesaid on the basis thatthey kept away from work during the probationary period without theprior sanction and approval of the management. There was novictimization or discrimination on the part of the management inarriving at this decision. He submitted that it is settled law that if theemployer in good faith is not satisfied with the conduct of aprobationer, he has the right to terminate his services and thereasons for such termination cannot be objectively assessed. Thegrounds of termination can be examined only for the limited purposeof ascertaining whether the element of mala tides exists. The reasonfor terminating the employment of the said 20 workmen, hesubmitted, cannot be considered to be irrational, arbitrary, capriciousor so unreasonable as could lead to the inference that it had beenexercised mala fide. This was a bona fide exercise of the employer’sright to be the sole judge of the probationer’s suitability for continuedemployment.
It is relevant to note that the 20 probationers were not members ofthe petitioner Trade Union up to the time that the Union decided tocall a strike and that they had applied to the Union for membershipwith a view to participating in the strike. Learned Counsel for theappellant himself conceded that their names were not included forpurposes of 'check-off’ as at the date of this strike, which meant thatthere was no intimation by these workmen to the employer that theywere members of the appellant Union. This fact assumes muchsignificance in the light of the letters of termination sent by the 1strespondent (P6) where it is stated inter alia as follows:-
“You have during the period of probationary employment, keptaway from work, from 17th November, 1982, without the priorsanction and approval of the management. We have to date notreceived any intimation from you as to the reason for your
absence.
We, therefore, write to advise you ffiat your probationaryemployment has been terminated with effect from 17th November,
1982.”
The learned Arbitrator, in the course of his award states that “theonly intimation that the management gets of an employee of theirjoining the Union is through the authorisation by such a member forthe deduction of Union dues (dues check-off) from his salary” and “itwas evident from their affidavits that practically all the workmen inSchedule B had handed over their applications for membership ofthe Union by 15th November, 1982”.
Although where the Branch Union is concerned, their acceptanceof the workman’s application may be the acceptance of hismembership, it does not follow that the employer thereby has noticeof such workman’s membership of the Union.
the Arbitrator then goes on to state that “If the management foundthe absence of the 20 workmen in Schedule B from workinexplicable, seeing that, according to their books, these workmenwere not members of the Union and a strike by Union members wason, the recognised course of action for the management was to havecalled for explanation of their absence from the concerned workmen,without resorting to the drastic course of action of summarydismissal; the fact that the workmen were on probation did not placethem outside the coverage of this course of action.”
I am unable to agree with this proposition. There was no duty caston the employer to call for explanation of their absence from theseworkmen, who admittedly were probationers.
As was stated in Venkatacharya v. Mysore Sugar Co. Ltd.,(1)"obviously a probationer is not in the same position as others inservice. He is in a state of suspense… prima facie his rights andclaims against the employer are less than those of others. The perioddenotes the time up to which he will be on trial and not an assuredduration of service.”
In State Distilleries Corporation v. Rupasinghe K Fernando, J.dealing with the two categories of confirmed and probationaryworkmen states as follows: “What then is the principal differencebetween confirmed and probationary employment? In the former, theburden lies on the employer to justify termination; and this he must doby reference to objective standards. In the latter, upon proof thattermination took place during probation, the burden is on theemployee to establish unjustifiable termination, and the employeemust establish at least a prima facie case of mala fides, before theemployer is called upon to adduce evidence as to his reasons fordismissal; and the employer does not have to show that the dismissalwas objectively justified."
The ‘confirmed’ and ‘probationary’ employees are obviously notsimilarly circumstanced. Though both categories are ‘workmen’ in thesphere of Industrial Law, their rights and privileges are not the same.The cause for termination of services of a confirmed workman wouldmostly fall within the ambit of misconduct or on disciplinary grounds.A tribunal is thus competent to examine not merely whether suchtermination is unlawful but also whether it is unjust. The burden is onthe employer to justify the termination, viewed objectively.
But, in the case of the probationer, the employer is not required toshow good cause in respect of termination during the period ofprobation, so long as he acts bona fide. The grounds of terminationcan be examined only for the limited purpose of ascertaining whetherthe employer has acted mala fide or whether such terminationamounts to victimization or an unfair labour practice –
Moosajee Ltd, v, Rasiah (8 Ceylon Cement Corporation v.Fernando (4 Elsteel Ltd, v, Jayasena (5 Brown & Co. Ltd. v.Samarasekera<6).
Malhotra in The Uw of Industrial Disputes. (1968 edition) states atpages 479 – 481: "It is, however, for the party alleging mala tides tolead reliable evidence in support of the said plea. A finding that themanagement has not acted bom fide will ordinarily not be reached ifthe materials are such that a reasonable man could have come to theconclusion which the management has reached… In takingdisciplinary action an employer would be considered to be acting notbona fide If he is prompted or motivated by ‘unfair labour practice’ or'victimization',,, The line of demarcation between the cases of 'unfairlabour practices’ and ‘victimization’ is very slender and quite ofteninvisible. The concepts if not synonymous at least considerablyoverlap".
Relying on the amendment to Section 2 of the Termination ofEmployment of Workmen (Special Provisions) Act, No. 45 of 1971 byAct No. 51 of 1988 the appellant submitted that in terms thereof, itbecomes imperative even in the case of probationers for theemployer to notify such workmen the reasons for termination inwriting. The amending Act has no application to the instant case asthe termination took place in November, 1982. In any event, thereason for termination has been set out in the letters dated 19.11.82(P. 6).
The position of the employer is that the workmen concerned keptaway from work from 17.11.82 without the prior sanction andapprovlkof the management and no intimation had been received asat 19.1182 indicating the reason for their absence. The appellant onthe other hand states that these workmen were on strike, the right towhich is a legitimate weapon in the armory of every employee,whether he be a probationer or otherwise.
There is no dispute that “the right to strike is one of the mostfundamental rights enjoyed by employees and their Unions and is anintegral part of their right to defend their collective economic andsocial interests” – S. R. de Silva. The Legal Framework of IndustrialRelations in Ceylon, at page 117.
Under the Trade Unions Ordinance, a strike ‘means the cessationof work by a body of persons employed in any trade or industryacting in combination, or a concerted refusal, or a refusal under acommon understanding of any number of persons who are, or havebeen, so employed, to continue to work or to accept employment’. Ithas the same meaning under the Industrial Disputes Act too.
In the words of Lord Denning, ‘A strike is a concerted stoppage ofwork by men done with a view to improving their wages or conditions,or to give vent to a grievance or make a protest about something orother, or supporting or sympathising with other workmen in suchendeavours! – Tramp Shipping Corporation v. Greenwich MarineInc.,(7>.
I have no hesitation in holding that a probationer has as much aright to strike as a confirmed workman and the proper exercise of thatright cannot place the probationer in jeopardy insofar as theemployer’s right to terminate his services during the period ofprobation is concerned. For, as Malhotra (ibid) states at pages 480 -481, citing Assam Oil Co. Ltd. v. Its workmen<8) and National TobaccoCo. of India Ltd. v. Fourth Industrial Tribunalm, “It is not open to anemployer to punish or dismiss his employee solely or principally forthe reason that he had joined a trade union. Where, therefore, thecircumstance that an employee had joined a trade union had at leastpartially weighed with the employer, it would be an act ofvictimization, and the punishment inflicted on the workman on thisconsideration would be unjustified”. It is axiomatic then that aprobationer who joins a Trade Union should enjoy all the rights andprivileges that go with such membership and should not bediscriminated against on the basis of his rank and/or status as aprobationer.
But, I cannot agree with the learned Arbitrator that if themanagement found the absence of the 20 workmen in Schedule Bfrom work inexplicable, seeing that, according to their books, thoseworkmen were not members of the Union and a strike by Unionmembers was on, the recognised course of action for themanagement was to have called for explanation of their absencefrom the concerned workmen, without resorting to the drastic courseof action of summary dismissal.
There is no such duty cast on the employer; nor do I know of sucha ‘recognised course of action’. To accept such a proposition wouldbe to place an unwarranted burden on the employer vis a vis aprobationer and is contrary to the well settled law as expressed in thenumerous decisions of our courts, as well as those of otherjurisdictions.
In my view, the petitioner has failed to discharge the burdenplaced upon it to establish unjustifiable termination of theprobationary workmen, based on the alleged mala tides of theemployer. The Union’s failure to duly inform the employer that the 20workmen concerned were its members and were in fact participatingin the strike, cannot be blamed on the employer, when the 1stRespondent legitimately terminated their services on the ground thatthey kept away from work without the prior sanction and approval ofthe management. That cannot amount to a mala fide act. It is well toremember that trade union action is a double edged weapon.
Not being similarly circumstanced with the confirmed workmen,the probationers do not stand comparison with their counterparts.Consequently, the question of unlawful discrimination as betweenthese two distinct categories of workmen does not arise. Nor has theappellant been able to satisfy the Court, as indicated above, that theprobationers have been victimized and/or discriminated against onthe ground of their participation in the strike. In that background, theapplicability of the ‘just and equitable rule’ as regards probationers,contended for by learned Counsel for the petitioner, needs noconsideration. I must, however, state that an employer who treats thecase of a probationer on a subjective basis cannot be said to beguilty of mala tides, as such a proposition is against the weight ofauthority on the subject, as well as the very concept of probation.
For the reasons aforesaid, I dismiss this appeal, but make no orderas regards costs.
AMERASINGHE, J. – I agree.
DHEERARATNE, J. -1 agree.
Appeal dismissed.