010-SLLR-SLLR-1995-2-CHAS-P.-HEYLEY-AND-CO.-LTD.-V.-COMMERCIAL-AND-INDUSTRIAL-WORKERS-AND-OTHERS.pdf
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Sri Lanka Law Reports
[1995] 2 Sri L.R.
CHAS P. HAYLEY AND CO., LTD.
v.COMMERCIAL AND INDUSTRIAL WORKERS AND OTHERS
CPURT OF APPEAL.
SENANAYAKE, J.
C.A. APPLICATION NO. 414/94
JANUARY 30, 1995 AND FEBRUARY 07, 1995.
Industrial Law – Industrial Disputes Act – Dispute – Settlement by Arbitration -Reference under Sec. 4(1) of the Industrial Disputes Act – Collective Agreement -No notice of Repudiation – Is the reference ultra vires – Is the Minister of Labourexercising Judicial functions when he makes a reference under S. 4(1)- Order anullity – Laches excused – Error of law on the face of the Record – Writ lies.
The Minister of Labour acting under Sec. 4(1) of the Industrial Disputes Act,referred an industrial dispute for settlement by arbitration. It was contended thatas there was a collective agreement which was in force and binding on theparties, there could not have been an industrial dispute within the meaning ofSection 48; further, under Sec. 8, an industrial dispute does not arise unless aparty to the collective agreement gives a valid notice of repudiation under Sec.9(1) (2). This objection was not raised before the Arbitrator. It was furthercontended that the award, in any event, is bad in law as the Arbitrator has notconsidered the relevant facts and had misconstrued documents.
Held:
The powers conferred on the Minister of Labour in terms of Sec. 4(1) are wide.The Minister acts solely in an administrative capacity, and not judicially or Quasi-judicially. The concluding words in Sec. 4(1) highlight the amplitude of the powervested under Sec. 4. Even if the two parties to the collective Agreement do notwant the matter referred to arbitration, the Minister is vested with the power underSec. 4(1) to refer the matter for arbitration.
Per Senanayake, J.: “To my mind the Legislature has prudently and advisedlyentrusted an amplitude of power in the Minister, in the larger interest of IndustrialPeace”.
A finding of fact may be impugned on the grounds of error of law on the faceof the Record; the misconstruction of documents become error on the face of therecord.
Although the Petitioner has disentitled himself to the discretionary relief by hisown conduct of submitting to jurisdiction and undue delay, as the proceedingswere a nullity, a Writ of Certiorari in the circumstances, would not be denied.
CA
Chas P. Hayley and Co., Ltd. v. Commercial and Industrial Workers
and Others (Senanayake, J.)
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Cases referred to:
Anisminic Ltd., v. Foreign Compensation Ltd. 1969 2 A.C. 147.
R. v. Fulham, Hammersmith and Kensington Rent Tribunal – ex parte – Zerek-1952 2KB 1.
Reg. v. Income Tax Special Commissioners 21 QBD 313.
Rex v. Lincolnshire Justices – Ex parte – Brett; 1926 2 KB 193.
Aislably Estates, Ltd., v. Weerasekare – 77 NLR 241.
Nadarajah, Ltd., v. Krishnadasan – 78 NLR 258.
APPLICATION for Writ of Certiorari.
Faisz Mustapha P.C. with Sanjeewa Jayawardene for PetitionerJ. C. Weliamuna for 1st Respondent.
Cur. adv. vult.
April 28„ 1995.
SENANAYAKE, J.
This is an application filed by the Petitioner invoking the jurisdictionof this Court to issue a Writ of Certiorari quashing the referencemarked P1 made by the 3rd Respondent and also to quash theaward made by the 2nd Respondent marked Y2.
The facts briefly are as follows: the Petitioner is an IncorporatedCompany engaged in the business of manufacture and export of coirtwine and mats and the export of coir yarn. In or about August 1992the 3rd Respondent acting in terms of Section 4 (1) of the IndustrialDisputes Act referred to the 2nd Respondent an Industrial Disputealleged to be in existence between the Petitioner Company and the1st Respondent Union for settlement by Arbitration. The matter thatwas referred was whether the demand of the 1st Respondent for theincrease of minimum monthly wage to Rs. 3000/- and correspondingincrease in the wage scales of all categories of employees of Chas P.Hayley and Co. Ltd., is justified, if not to what reliefs the saidemployees are entitled. The said Arbitration was allotted No. A2242.The Petitioner's position was that it was bound by the CollectiveAgreement dated 12.02.90, that the current wages were paidaccording to the terms of the Collective Agreement and they werealso paying the N.R.C.O.L.G. to the employees at the end of Octobereach year. The concessionary bank credit and the benefit of a tax
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free outright Grant were withdrawn resulting in the Company’sprofitability. That the Petitioner suffered further financial losses due tothe actions of the employees during the several months precedingthe reference of the alleged dispute to Arbitration, that the financialand trading position of the Petitioner did not warrant any increase ofwages.
At the inquiry held by the 2nd Respondent an industrial disputesaid to be in existence between Haymat Ltd., and its employeeswhich had also been referred to the 2nd Respondent was referred forArbitration to the 2nd Respondent and allotted No. A. 2259 and wasconsolidated with the said Arbitration A. 2242 and the parties agreedto abide by the award made in A. 2242 as the matters alleged to bein dispute in both were identical.
The petitioner's position was as the Collective Agreement was andis in force and binding on the parties and there could not have beenan Industrial Dispute within the meaning of Section 48 of theIndustrial Disputes Act and as such the 3rd respondent had nojurisdiction to make a reference under Section 4(1) of the IndustrialDisputes Act and as such the reference is ultra vires the Powers ofthe Minister and as such the award is void.
That the 2nd Respondent had failed to disclose the criteria onwhich a thirty percent increase in the wages has been computed andas such the award is vitiated by error of law on the face of the record.That the award was grossly unreasonable; due to acts of hooliganismthe factory was closed for 45 days and the reduction was in theregion of 33% to 22% during this period; due to the aforesaid reasonsthe Petitioner lost an important buyer who had been buying 25% ofthe production and the annual report showed for 1992/93 a loss ofRs. 9.3 million. The volume of export dropped from 1366 metric tonsin 1990 to 1117 metric tons in 1992 due to the loss of markets andduring the last preceding years four companies have entered themarket and the wages paid by them were less than what was paid bythe Petitioner and due to competition from the local and foreigncompanies the prices in the international market have fallen, that thesaid award was unsupported by evidence and as such the awardwas vitiated by error of law on the face of the record. The Petitionerhas repudiated the award and has duly given notice of repudiation.
CA
Chas P. Hayley and Co., Ltd. v. Commercial and Industrial Workers
and Others (Senanayake, J.)
AS
The 1st Respondent in the statement of objections in answeringparagraphs 4 and 5 of the Petition stated that the Petitioner did nottake any objections with regard to the validity of the reference by the3rd respondent. They further stated as the Petitioner had taken stepsto repudiate or repudiated the award the Petitioner is not entitled tohave and maintain this application. Further as the Petitioner has notobjected to the reference to the Arbitration at the earliest, reliefcannot be obtained as the Petitioner is guilty of laches and or delayin filing this application.
The submission of the Learned Counsel for the Petitioner was thatthere was a Collective Agreement with the Petitioner and the Union.Y4 which was extended to the 1st Respondent and the Petitioner interms of clause 4 of Y4, the Collective Agreement came into force on01.11.88 and the 1st Respondent became the recipient of thebenefits of Y4 and was bound by the terms and conditions of Y4, thisfact was not in dispute. According to clause 19 of Y4 the employeescovered by the Collective Agreement will be entitled to Non-Recurring Cost of Living Gratuity (hereinafter referred asNRCOLG).Clause 32 and clause 33 of Y4, the Union and itsmembers and the employees covered and bound by the Agreementagree with the Employer that during the continuance in force of theAgreement that they shall not engage in any strike or other forms oftrade Union action against the Employer. In respect of any disputecovered and bound by the Agreement on the other hand whether ornot such dispute is related to this Agreement except where suchdispute has been caused by an act of the Employer.
Clause 33 reads as follows: The Union and its members and theemployees agree with the Employer that during the continuance inforce of the said Agreement they will not seek to vary, alter or add toall or any of the terms and conditions of employment presentlyapplicable to any of the employees covered and bound by theAgreement’.
Clause 33 (2) reads as follow: The Employer agrees with theUnion and its members and the employees covered and bound bythe Agreement that he shall not seek to vary alter and withdraw all orany of the benefits presently enjoyed by the employees covered andbound by the Agreement other than by Mutual Agreement’.
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Clause 33(3) reads as follows: 'any dispute or difference arisingfrom negotiation under the provisions of sub-clause (1) or (2) may beresolved by voluntary arbitration but only if all the parties concernedagree to submit “such dispute or difference for settlement byvoluntary arbitration".’
The terms of Y4 was extended by Y5 on 12.02.1990 to the partiesto Y5. The submission of the Learned Counsel for the Petitioner wasthat under Section 8(1) of the Industrial Disputes Act the CollectiveAgreement which was for the time being in force shall be binding onthe parties, trade unions, employers and workmen referred to in thatAgreement in accordance with the provisions of Section 5(2) and theterms of the Agreement shall be implied terms in the contract ofemployment between the employers and workmen bound by theAgreement. The 1st Respondent by R2 dated 12.01.91 demanded anincrease of salary from the Petitioner. The first submission of theLearned Counsel was that the reference by the 3rd Respondent wasbad as he had no jurisdiction to act in terms 4(1) of the IndustrialDisputes Act as there was no Industrial Dispute. Section 48 of the Actdefines “Industrial Disputes". According to the Petitioner’s owndocument P1 the said reference was made on 08.08.1992. ThePetitioner had waited till 21st June 1994 to take this jurisdictionalobjections. The petitioner did not take this objection before theArbitrator. The petitioner in his statement did not take the saidobjection though they were aware of the existence of the CollectiveAgreement Y4 and Y5. The delay in failing to take the objection is notexplained. A Writ of Certiorari is issued at the discretion of the Court.It cannot be held to be a Writ of right or one issued as a matter ofcourse. The Petitioner has disentitled himself to the discretionaryrelief by his own conduct submitting to jurisdiction waiver and unduedelay and laches.
“Ferris-Extraordinary Legal Remedies para 176 “Laches is suchnegligence or omission to assert a right and taken inconjunction with the lapse of time, nor less great and othercircumstances causing prejudice to an adverse party operateas a bar in a Court of equity”.
CA
Chas P. Hayley and Co., Ltd. v. Commercial and Industrial Workers
and Others (Senanayake, J.)
47
“Practice clearly indicates that where the proceedings were anullity an award of Certiorari will not be readily denied” de SmithJudicial Review.
In the case of Anisminic Ltd. v. Foreign Compensation Ltd.m LordPearce observed "… Lack of Jurisdiction may arise in various ways.There may be an absence of those formalities or things which areconditions precedent to the tribunal having any jurisdiction to embarkon an inquiry. Or the tribunal may at the end make an order that it hasno jurisdiction to make. Or in the intervening stage, while engaged ona proper inquiry, the tribunal may depart from the rules of naturaljustice or it may ask itself the wrong questions, or it may not take intoaccount matters which it was directed to take into account. Thereby itwould step outside its jurisdiction. It would turn its inquiry intosomething not directed by Parliament and fail to make the inquirywhich Parliament did direct. Any of these things would cause thepurported decision to be a nullity".
In the case of R. v. Fulham, Hammersmith and KensingtonRent Tribunal ex parte Zerek(2) Lord Goddard C.J. observed “The lawto be gathered especially from Reg. v. Income Tax SpecialCommissioners(3) and Rex v. Lincolnshire Justices; Ex parte Brettw isthat if a certain state of facts has to exist before an inferior tribunalhave jurisdiction, they can inquire into the facts in order to decidewhether or not they have jurisdiction but cannot give themselvesjurisdiction by a wrong decision upon them, and this Court by meansof proceedings for Certiorari, inquire into the correctness of thedecision. The decision as to these facts is regarded as collateralbecause, though the existence of jurisdiction depends on it, it is notthe main question which the tribunal has to decide”.
The submission of Learned Counsel was on the basis as theCollective Agreement was in force in terms of the Industrial DisputesAct Section 8, an Industrial Dispute does not arise unless any party tothe Collective Agreement in terms of Section 9(1) and (2) had givenvalid notice of repudiation and the agreement to which such noticerelates shall terminate and cease to have effect upon the expirationof the month immediately succeeding the month in which the noticeis so received by the Commissioner and the Commissioner shallcause the notice of repudiation to be published in the Gazette.
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In the instant case there was no repudiation in terms of Y4 clause33 the Union or the employees moves to vary the terms or conditionsof the Collective Agreement, this could be done only by mutualagreement and any dispute or differences arising from negotiationunder sub clause (1) and (2) of clause of 33 and if all the partiesagree submit such dispute for settlement by voluntary arbitration.
The submission was that the reference made by the 3rdrespondent was ultra vires, in view of the existence in force at thetime of the reference the Collective Agreement which also providedthe machinery to settle any variation of the terms of the collectiveagreement. The powers conferred on the Minister of Labour in termsof Section 4(1) to refer an industrial dispute for compulsory arbitrationare wide. In Aislaby Estates Ltd. v. Weerasekera (5) Pathirana, J.observed at page 253 …“The Minister is acting solely in anadministrative capacity and not judicially or quasi judicially. Theconcluding words in Section 4(1) notwithstanding that the parties tothe dispute or their representative do not consent to such areference", in fact highlight the amplitude of power vested by Section4 in the Minister to refer a dispute to a labour tribunal for adjudication.Even if the two parties to the Collective Agreement do not want thematter referred to arbitration the Minister, nevertheless under Section4(1) is vested with the power to refer the matter for arbitration. To mymind the legislature has prudently and advisedly entrusted anamplitude of power in the Minister in the larger interest of industrialpeace.”
In my view the Minister of Labour is not called upon to exerciseany Judicial function in regard to the actual Industrial dispute. Thepower he exercises is of purely administrative nature and it is his dutyto see to the industrial peace in the country.
In the case of Nadaraja Ltd. v. Krishnadasan161 the Supreme Courtheld “The order of reference is an administrative act of the Ministerwho has to form an opinion as to the factual existence orapprehension of an Industrial dispute.”
I am of the view, that a line of decided cases confirm the principlethat the reference made by the Minister in terms of Section 4(1) of the
CA
Chas P. Hayley and Co., Ltd. v. Commercial and Industrial Workers
and Others (Senanayake, J.)
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Act is ministerial and not reviewable by Courts. Further no suchobjection was taken by the Petitioner before the 2nd Respondent. Inmy view I am of the view the submission of the Learned Counsel mustfail and the reference made by the Minister was intra vires and withinhis powers and jurisdiction.
The second submission of the Learned Counsel was that thefinancial constraints and the heavy loss for the financial year 91/92and the loss of markets and competition from other competitors andloss of the foreign buyer due to the activities of the Union, caused thefall of production, and the go-slow practice adopted by the workershave placed them in a desparate position and that they were unableto pay the demands made by the Union – a minimum wage ofRs. 100/- per day resulting in a monthly wage of Rs. 3000/-. Hissubmission was that the award in any event vitiated in failing to takerelevant circumstances like that the petitioner was prepared to give10% salary increase to a 10% productivity increase; damage causedto the property of the factory as depicted by R12, the Union adoptinga go-slow movement and a considerable drop in production. Theacts of the workers compelling the management to close the Factorythe failure to take into account document R16b where there was atoss of nearly 10 Million, the downward trend in production which was43 metric tons less than the output of previous years, failure toconsider the new competitors to the trade who paid lower wages;failure to consider that the demand for the product had fallen in theforeign markets and the competition from synthetic products.
The Arbitrator had taken into consideration irrelevant facts. TheArbitrator equating and commenting adversely on the Managementabout the salaries paid to the executive grade. His failure tounderstand that the salary paid to the Executives depend on marketfactors of supply and demand. His comment and considering factorsirrelevant to the issue – the cost of replacing the Air Conditionerswhich was negligible has clouded the mind of the 2nd Respondent.
It is well settled that the order of an inferior tribunal having a dutyto act reasonably in determining the rights of the parties is liable tobe quashed by Writ of Certiorari for an error of law appearing on theface of the record. A finding of fact may be impugned on the ground
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of error of law on the face of the record (a) erroneously refusing toadmit admissible material evidence (b) erroneously admittinginadmissible evidence which influence the finding and (c) finding offact based on no evidence, (d) where the tribunal had acted withmanifest or clear unreasonableness or unfairness. Themisconstruction of the document becomes an error on the face of therecord.
I am of the view that the Arbitrator had misconstrued the documentR16b when he failed to consider that the loss depicted in the Reportand speculated on the fact that it was temporary without anyevidence. There was no evidence for such a finding. This wasunreasonable and unfair. The evidence revealed that the employeeswere getting a higher wage than prescribed by the Wages BoardOrdinance. They were paid more than the other competitors in theTrade. The Arbitrator failed to consider the heavy financial loss andhad acted unreasonably and unfairly in granting 30 percent increasein wages with a 10% increase in productivity was an error of law onthe face of the record. In the circumstances, I quash the award of the2nd Respondent by granting a writ of Certiorari.
In the circumstances, I allow paragraph ‘b’ of the prayer of thePetition. I refrain from making an order for costs.
Application allowed.
Award quashed.