009-NLR-NLR-V-66-COLOMBO-COMMERCIAL-CO.-LTD.-Petitioner-and-K.-SHANMUGALINGAM-et-al.-Responde.pdf
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Colombo Commercial Co. Lid. v. Shanmugalingam
1904Present: Weerasooriya, S.P.J., and Herat, J.COLOMBO COMMERCIAL CO. LTD., Petitioner, andK.SHANMUGALINGAM et al., RespondentsS.G. 202j1963—Application for a Writ of Certiorari
Certiorari—Amenability of a statutory arbitrator to such writ—Industrial dispute—Reference for settlement by arbitration—Powers of arbitrator—Part cf awardmade in excess of jurisdiction—Liability to bo set aside—“ Just and equitable ”—Error of law on face of record—Industrial Disputes Act {Cap. 131), ss. 3 (I) (d),16, 17.
A writ of certiorari lies to quash, the award of a statutory arbitral or on anyof the grounds on which such a wTifc would issue. Accordingly, it li os against anarbitrator nominated under section 3 (1) {d) of the Industrial Disputes Act.
WEERASOORIYA, S.P.J.—Colombo Commercial Co. Ltd. v. Shanmugalingam 27
An industrial dispute between the petitioner-company and the 2nd respondent(a trade union) was referred under section 3 (1) (d) of the Industrial DisputesAct for settlement by arbitration. One of the terms of reference to which theparties agreed was that if the arbitrator held that certain letters of warningwhich had been sent by the Company to some of their workmen were justified,the letters should stand. The arbitrator, in his award, decided that the lettersof warning were justified, but also held tbat a material paragraph (paragraph 2)in them should not have any effect.
Held, that that part of the award which declared that paragraph 2 of theletters of warning should not bave any effect should be quashed by certiorarias being in excess of the jurisdiction conferred on the arbitrator by the provisionsof section 16 of the Industrial Disputes Act. In the alternative, it was vitiatedby error of law on the face of the record if the arbitrator had purported to acton the “ just and equitable ” ground in section 17 (1) of the Act.
Application for a writ of certiorari to quash an award, or certainportions thereof, made by an arbitrator upon a reference under section3 (1) (d) of the Industrial Disputes Act.
JET. V. Perera, Q.C., with 8. J. Kadirgamar and K. N. Chokey,for the petitioner.
No appearance for the respondents.
Cur. etdv. vult*
February 3, 1964. Weebasoobiya, S.P.J.—
This is. an application for a writ of certiorari to quash an award, orcertain portions thereof, made by the 1st respondent in his capacity asan arbitrator nominated by the petitioner-company and tbe 2nd res-pondent, who were the parties to an industrial dispute referred by theCommissioner of Labour to the 1st respondent for settlement by arbi-tration. The reference was made under section 3 (1) (d) of the IndustrialDisputes Act (Cap. 131) which provides, inter alia, for the Commissionerof Labour referring an industrial dispute, by consent of tbe parties, toan arbitrator jointly nominated by them.
The 2nd respondent is a registered trade union the members of whichare workmen employed under the petitioner-company. The nominationof the 1st respondent as arbitrator by tbe petitioner and tbe 2nd respon-dent, and the formulation of the matter in dispute, were made in pur-suance of an agreement arrived at between them on the 25th September,1962, a copy of which marked “ H ” is annexed to the petitioner’sapplication. Tbe terms of the agreement are:
" It is hereby agreed between the Colombo Commercial Company,Colombo, and the Colombo Commercial Company Workers’ Union asfollows:—
The workers who are at present on strike will call off the strikeimmediately, and will resume work on Thursday 27.9.62 at 8 a.m.
28 WE E RAS O O R1YA, S.P.J.—Colombo Commercial Co. Ltd. v. Shanmugalingum
That the letters of warning dated 12th September, 1982 addressedto the following workers :—
402 B. D. Vasthuhamy.
405 Lewis Singbo
401 D. C. A. D. Karunapala
415 T. A. Garvin Peris
642 P. Piyasena
576 K. Lewis Mendis
by the Company, which were not accepted by them will be acceptedby them on 27.9.62.
If the terms of (1) and (2) are complied with the parties agreeto the following issue being referred to arbitration under section 3 (1) (d)of the Industrial Disputes Act to Mr. Kanapathipillai Sanmugalingam4 Whether the warning issued by the Company to the workers men-tioned in clause (2) by the letter of the Company dated 12.9.62 isjustified or not ’.
It is further agreed that if the Arbitrator holds that the lettersof warning were not justified, the letters will be withdrawn by theCompany. If the Arbitrator holds that the warning was justified theletters will stand.
It is further agreed that if the Arbitrator holds that the lettersof warning were not justified, the Company will pay the six workersconcerned wages for the one and half days they were on strike.
It is further agreed that at the conclusion of the arbitrationproceedings. the Union may take up with the’ Company any otherissues arising out of this dispute. ”
The petitioner-company’s letter of the 12th September, 1962, referredto in clause (3) of the above agreement purported to be a letter of warningaddressed to each of the six workmen specified in clause (2) stating thatthey, without valid excuse, were idling from 8.50 a.m. to 9 a.m. on the6th September, 1962, during working hours, that the idling amountedto neglect of duty under the standing orders for the Engineering tradeand informing them that in accordance with the said standing ordersthree letters of warning for neglect of duties or misconduct can resultin dismissal.
Regarding the allegation of idling, the 1st respondent held in his award(paragraph 14) that Vasthuhamy, Lewis Singho and Lewis Mendis werenot idling, while he held against the other three workmen, Karunapala,Garvin Peris and Piyasena, on the same point. He also held (paragraph 15)that the warning in the petitioner’s letter dated the 12th September,1962, to Vasthuhamy, Lewis Singho and Lewis Mendis was not justifiedwhile that issued to Karunapala, Garvin Peris and Piyasena was justi-fied. But in regard to the letters of warning which he held were justi-fied, he also held that they should stand without paragraph 2 thereof havingany effect. It is this part of the award that Mr. H. V. Perera who
WEE RASOORIYA, S.P.J.—Colombo Commercial Co. Ltd. v. Shanmugalingam 29
appeared for the petitioner particularly sought to have quashed by certio-rari as being in excess of the 1st respondent’s jurisdiction. Paragraph2 of the letters issued to Karunapala and Piyasena is as follows :
“ Your behaviour on this occasion amounts to neglect of dutiesunder the Engineering Trade. For your inforihation, under thestanding orders for the Engineering Trade, three letters of warning forneglect of duties, misconduct or any other misdemeanour can result indismissal. This serves as your first letter of warning. ”
Paragraph 2 of the letter to Garvin Peris is in the same terms exceptthat the last sentence reads :—
“ We note from our records that you have been warned on the17th May, 1959, and this serves as your second letter of warning. ”
The reasons for the 1st respondent holding that paragraph 2 of theletters of warning to Karunapala, Garvin Peris and Piyasena shouldhave no effect are to be found in paragraph 13 of the award which is inthe following terms :—
“13. Therefore I hold that paragraph 2 of the letters of warningin respect of all these six workmen should be cancelled, and that threesuch letters of warning would not entitle the management to discontinuethe services of these workmen. If the Company desires to utilise threesuch warning letters to discontinue the services of its workmen, itshould charge-sheet them for idling and hold a full inquiry beforeissuing such letters of warning. Without that procedure these lettersof warning would not entitle the Company to dispense with theservices of its workmen after three such warnings.”
Mr. H. Y. Perera submitted that paragraph 13 of the award too shouldbe quashed as being in excess of the 1st respondent’s jurisdiction.
In the application filed by the petitioner it is further pleaded that the1st respondent was wrong in law in holding that the warnings issued tothe workmen Vasthuhamy, Lewis Singho and Lewis Mendis were notjustified, and on that ground the petitioner asked that that finding alsobe quashed. It is not clear in what respects the 1st respondent committedan error of law in arriving at that finding, which appears to be one offact and, presumably, is based on evidence. Moreover, the agreement“ H ” specifically provides that if the arbitrator holds that the letters ofwarning were not justified they will be withdrawn by the Company,and if he holds that the warnings were justified these letters will stand.This agreement implies that the arbitrator’s finding whether the warningswere justified or not will be accepted by the parties without question.
do not think that it is now open to the petitioner to go back on thisagreement and ask that the finding regarding the warnings given toVasthuhamy, Lewis Singho and Lewis Mendis be quashed. This part ofthe petitioner’s application was not pressed by Mr. Perera and must berefused.
2*K, 17666 (4/64)
30 WEERASOOR1YA, S.P.J.—Colombo Commercial Co. Ltd. v. Shanmugalingam
There remains for consideration : (I) whether the 1st respondent’sfinding that paragraph 2 of the letters of warning issued to Karunapala,Garvin Peris and Piyasena should have no effect was given in excess ofhis jurisdiction, and (II) whether paragraph 13 of the award is affectedby the same illegality.
The jurisdiction of the 1st respondent in regard to the dispute sub-mitted to him for settlement by arbitration would necessarily be limitedby the terms of reference made under section 3 (1) (d) of the IndustrialDisputes Act. That jurisdiction may also be further modified, or evenenlarged, by such of the other provisions of the Act as are applicable tothe case. According to the terms of reference, the dispute submitted tothe 1st respondent for settlement is whether the warning issued in thepetitioner’s letter of the 12th September, 1962, to the six workmen con-cerned was justified or not. This is the identical dispute which theparties agreed in clause (3) of the document “ H ” should be referred forarbitration. The parties further agreed in clause (4) of “ H ” that if“ the Arbitrator holds that the warning was justified the 'letters willstand ” (i.e. in their entirety). The finding of the 1st respondent thatsuch of the letters of warning which he held were justified should standwithout paragraph 2 thereof having any effect overrides the agreementin clause (4). It is clear that the parties never intended when theynominated the 1st respondent as arbitrator that he should have thepower to alter or modify any of the terms embodied in “ H
The statutory powers of an arbitrator to whom a dispute is referredunder section 3 (I) (d) of the Industrial Disputes Act are to be foundin sections 16, 17 and 33 of the Act. Of these provisions only sections16 and 17 need be considered for the purposes of this case. The secondparagraph of section 16 provides that nothing in the preceding provisionsof the section shall be deemed to be in derogation of the power of anarbitrator “ to admit, consider and decide any other matter which isshown to his satisfaction to have been a matter in dispute between theparties prior to the date of the aforesaid order, provided such matterarises out of, or is connected with a matter specified in the statementprepared by the Commissioner This part of section 16 does notapply since the question whether paragraph 2 of the letter of warningshould stand if the warning is held to be justified was never in dispute.
Section 17 (1) provides that when “ an industrial dispute has beenreferred under section 3 to an arbitrator for settlement by arbitration,he shall make all such inquiries into the dispute as he may considernecessary, hear such evidence as may be tendered by the parties to thedispute, and thereafter make such award as may appear to him just andequitable ”. I have in my judgment in the case of The Stratheden TeaCo. Ltd. v. R. R. Selvadurai and Othersx, delivered recently, consideredthe effect of the phrase “ just and equitable ” in section 17 (1), and I donot think it necessary to add to what I stated there. In arriving at thefinding that the letters of warning issued to Karunapala, Garvin Peris
1 (1963) 66 N. L. R. 6.
WEERASOORIYA, S.P.J.—Colombo Commercial Co. Ltd. v. Shanmugalingam 31
-and Piyasena should stand without paragraph 2 thereof having anyeffect, the 1st respondent did not purport to act on the ** just and equi-table ” ground in section 17 (1). But even if he intended to base hisfinding on that ground I would, for reasons already given by me inthe above-mentioned case, hold that the finding has proceeded from amisconstruction of the phrase, amounting to an error of law, for I donot see how, in respect of letters of warnings which are held to be justified,it can be “ just and equitable ” to make an order to the prejudice of thepetitioner nullifying what appears to be the only purpose for which theletters were issued. ' In my opinion this part of the 1st respondent’s-award has been made in excess of jurisdiction. In the alternative it isvitiated by error of law on the face of the record.
In paragraph 13 of the award the 1st respondent has taken upon himselfto give general directions as to the procedure to be followed in issuingletters of warning, and he has held that three such letters will notentitle the Company to discontinue any workman unless prior to the issueof each letter there has been a “ full inquiry ” (whatever that may mean)following on the serving of a charge sheet. I can understand the anxietyof the petitioner to have these directions rescinded, for, if allowed tostand, they may well affect the validity, not only of the letter of warningdated the 12th September, 1962, but also other letters of warning, pastas well as future, issued to the petitioner’s workmen. Assuming (without■deciding) that the requirements of natural justice have to be observedat any inquiry held by the petitioner into a charge of idling against aworkman for which, if established, a letter of warning may issue, thedirections given by the 1st respondent go beyond those requirements,and, in my opinion, are unwarranted and in excess of his jurisdictionas arbitrator.
If, therefore, the 1st respondent, as arbitrator, is amenable to a writof certiorari, the petitioner would appear to be entitled to an order■quashing the finding of the 1st respondent that the letters of warningissued to Karunapala, Garvin Peris and Piyasena should stand withoutparagraph 2 thereof having any effect, and also to an order quashingparagraph 13 of the award. Mr. H. V. Perera submitted that the pre-rogative writs of prohibition and certiorari lie to quash the award of astatutory arbitrator. As, however, the respondents were not represented•at the hearing of this application, we have not had the benefit of anyargument contra. But Mr. Perera very properly brought to our noticethe case of Commercial Banks Association (Ceylon) v. D. E. Wijeyewardeneand Others1, which came up before a Divisional Bench of this Court. Inthat case an application was made by the petitioner for writs of certio-rari, prohibition and mandamus on the District Judge of Colombo towhom an industrial dispute had been referred under section 3 (1) (d) ofthe Industrial Disputes Act lor settlement by arbitration. The referencewas made to the District Judge as, although the parties consented to thereference to arbitration, they had not nominated an arbitrator. At the
1 (1959) 61 N. L. R. 196.
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hearing of the application, only the application for a ■writ of prohibitionwas pressed by petitioner’s counsel. The footing on which the applica-tion for such a writ was made was that the District Judge had, for certainreasons that were advanced, no jurisdiction to arbitrate on the disputewhich was referred to him. This Court held that as the parties (includingthe petitioner) had consented to the reference of the dispute to arbitra-tion the application must fail, and it was accordingly refused. But on thegeneral question whether a writ of prohibition or certiorari lies againstan arbitrator nominated under section 3 (1) (d) of the Industrial Disputes-Act, the following observations were made by my Lord the Chief Justice*who delivered the principal judgment in the case :—
“ The question whether prohibition lies was not argued before us.Counsel proceeded on the assumption that it does lie. Lest silence bemisconstrued I wish to add that this judgment should not be taken asdeciding that prohibition lies to the District Judge to whom a disputeunder section 3 (1) (d) of the Industrial Disputes Act is referred, norshould it be regarded as a precedent for the proposition that certiorariand prohibition lie against an arbitrator appointed under section 3 (1) (<!)-of the Act. ”
In view of these observations, I have considered the question whethera writ of certiorari lies against the 1st respondent as arbitrator nominated,under section 3 (1) (cZ) of the Industrial Disputes Act. As in the casereferred to above, the parties in the present case too consented to thereference to arbitration. They even went a step further and nominated,the 1st respondent as arbitrator. But unlike in that case, the jurisdiction,of the arbitrator to arbitrate on the particular dispute referred to him isnot challenged. Here the challenge is to certain portions of the award,which, it is submitted, have been made in excess of jurisdiction.
It is well settled law in England that the prerogative writs of prohi-bition and certiorari do not issue to a private arbitral body. See thedicta of Lord Goddard, C.J., in Regina v. National Joint Council for the-Craft of Dental Technicians (Disputes Committee) and Others : Ex parteNeate1. But he also stated that the position is otherwise in the caseof statutory arbitrators, the reason for the difference being that whenParliament has conferred statutory powers on such bodies which, whenexercised, may lead to the detriment of subjects who have to submitto their jurisdiction, it is essential that the Courts should be able tocontrol the exercise of such jurisdiction strictly within the limits whichParliament has conferred on them. In that case the Court declined toissue writs of pxohibition and certiorari to a private arbitration body.The King v Powell: Ex Parte The Marquis of Camden2 is an instanceof a writ of prohibition issuing to a statutory arbitrator.
In the issue of these prerogative writs we follow the English law. Ido not think that there can be any question that in the present case the1st respondent, although nominated by the parties, is a statutory
a (1925) 1 K. B. D. 641.
1 L. B. (1953) 1 Q. B. D. 704.
Rosaline Nona v. Mango Nona
33
arbitrator who derives his jurisdiction and powers, not simply from thenomination, but also from the order of reference made under section3 (1) (d) and from the other provisions of the Industrial Disputes Act.
would hold, therefore, that a writ of certiorari lies to quash the award■of the 1st respondent on any of the grounds on which such a writ wouldissue.
So much of the award of the 1st respondent as directs that the letters•of warning issued to Karunapala, Garvin Peris and Piyasena shouldstand without paragraph 2 having effect is quashed. Paragraph 13 of thesward is also quashed. As for costs, I take into account that the applica-tion made by the petitioner has failed in respect of the three workmento whom the issue of the letter of warning was held by the 1st respondentnot justified. I accordingly award the petitioner as costs a sum ofBs. 157/50, payable by the 2nd respondent.
Herat, J.—I agree.
Application partly allowed.