De Silva v. Associated Newspapers of Ceylon Lid.
The Associated Newspapers of Ceylon Ltd.
COURT OF APPEAL.
WIMALARATNE, P. AND TAMBIAH, J.
c.a. (s.c.) 36/77—l.t. kandy 3/255/74.march 5, 7, 1979.
Labour Tribunal—Application for relief by District Correspondent ofnewspaper group on ground of termination of services—Whether inde-pendent contractor or ‘ workman ’ within meaning of Industrial Dis-putes Act—Tests applicable—Reinstatement—Whether contract for fixedterm entitles applicant to such relief—Grdtuity—Can Tribunal makeorder even if not legally due in terms of contract—Non-renewal of-written contract for fixed term—Effect.
The applicant had entered into a written agreement dated 10th March,'1969, with the respondent Company in terms of which he was appointedthe District Correspondent of its newspapers for Kandy North. Prior tothis he was the Kandy Group Correspondent from February, 1958. Interms of the said written agreement the respondent Company agreedto purchase from the applicant news reports, pictures, information etc.-relating to his district which were suitable for publication. Other clausesof the agreement provided for the payment of a sum of Rs. 306 permonth to the applicant as a “retainer". For the exclusive purchasingrights over such news, in addition, the respondent Company also agreiedto pay the applicant for every news item and picture which it publishedat rates set out in the schedule. Other clauses of the agreementalso provided! for the accuracy and veracity of news supplied, the re-porting of any special proceedings and/or events etc. This writtenagreement was renewable by mutual consent and although in the firstinstance it was for a period of six months it was thereafter renewedfrom time to time until finally after it expired on 28th February, 1974,the respondent Company did not renew it.
The applicant went to the Labour Tribunal on the ground that his serviceshad been terminated unlawfully by the respondent Company as from 28thFebruary, 1974, and prayed for reinstatement or compensation in lieuthereof and also for a gratuity for his past services. The respondentCompany took up the position that the applicant was not a “ workman ”within the meaning of the Industrial Disputes Act, but was an indepen-dent contractor. Accordingly the question that arose for decision by theLabour Tribunal was wheher there was a contract of service betweenthe parties or one for services.
Apart from the series of agreements in writing renewed from time totime as aforesaid there was also other evidence both oral and documen-tary in regard to the lega1 relationship between the parties. This evidencerevealed that since his appointment as the Group Correspondent in 1958the applicant had to attend ti.o office of the respondent Company daily;taken instructions from the Chief Reporter or his assistant who was alsothe Kandy news editor as to the coverage of verious events; that he waspaid travelling and subsistence though this was not stipulated in thewritten agreement; that he sometimes received special instructions fromthe Head' Office in Colombo regarding the coverage of various events and
Sri Lanka Law Reports (1978-79) 2 S. L. R.
that communications to him from the Head Office were addressedto the Kandy Office and not to his residence. There was also the evidenceof Mr. Wickremanayake who was the Kandy news editor above referredto regarding the assignments given and’ the work done by these DistrictCorrespondents. This witness also spoke to the fact that they had to applyfor and get leave and sometimes leave was .refused. The applicant hadon occasions also acted for Mr. Wickremanayake. Bonuses werj paidfor good work and these were paid monthly along with the “ retainer
On behalf of the applicant it was submitted that the Court must lookat the o.al and documentary evidence notwithstanding that there wasan agreement in writing. Cases were also cited by Counsel which referredto the “ control test ” and the “ economy reality test ” and the “ integral•test ”. ■ It was submitted on behalf of the respondent that these twolatter tests were not applicable in deciding whether it is a contract ofservice or of services if there was a written contract.
A correspondent was not doing business on his own account butwas employed as a part and parcel of the Company business of news-paper puoi.shers ana was an integral part of me company's business.He was therefore employed under a contract of service and was a“ workman ” within the meaning of the Industrial Disputes Act.
However having been employed under a series of contracts ofemployment for fixed terms without any guarantee that the contractwould be renewed on the expiry of the stipulated period such anemployee would have no claim to reinstatement. A fixed term contractwas not terminated by the employer but by mutual agreement on theeffluxion of time.
The Labour Tribunal nevertheless had jurisdiction to order payment-of gratuity to the applicant on the basis that he had been employed as a“ workman ” from February 1958 up to 28th February, 1974. Even wheregratuity is not legally due in terms of the contract a Labour Tribunalmay consider whether such an order is just and equitable, ancf in theease of a fixed teim contract not being renewed by the employer for.reasons other than misconduct and inefficiency, then a “retiral situation ”.arises which gives rise to a claim for gratuity.
Cases referred to
Indian Institute of Technology v. Mangat Singh, (1974) 2 L.LJ.191 (Delhi).
The Times of Ceylon Ltd. v. Nidahas Karmika Saha WelandaSevaka Vurthiya Samithiya, (1960) 63 N.L.R. 126.
Carson Cumberbatch & Co. Ltd. v. Nandasena, (1973) 77 N.L.R. 73.
Morren v. Swinton and Pendlebury Borough Council, (1965 ) 2 All
E.R. 349 ; (1965) 1 W.L.R. 576.
Stevenson Jordon and Harrison Ltd. v. Me Donald and Evans.
(1952) 1 T.L.R. 101; (1952) W.N. 7.
Bank Voor Handel in Scheepvaart v. Stafford, (1952) 2 All E.R.
956; (1953) 1 Q.B. 248; (1952) 2 T.L.R. 861.
U.S. v. Silk, (1946) 331 U.S. 704.
Market Investigations Ltd. v. Minister of Social Security (1968)
3 All E.R. 732 ; (1969) 2 W.L.R. 1; (1969 ) 2 Q.B. 173.
Beloff v. Pressdram Ltd. (1973) 1 All E.R. 241.
The National Union of Workers v. The Scottish Ceylon Tea CoLtd., (1976) 78 N.L.R. 133.
APPEAL from the Labour Tribunal, Kandy.
A. A. de Silva, with S- Dassanayake, for the applicant-appellant.
Mark Fernando, for the respondent-respondent.
Cur. adv. ruff.
De Silva v. Associated Newspapers of Ceylon Ltd.
May 16, 1979.
WIMALARATNE, P,The applicant-appellant was the Kandy group correspondent ofthe respondent company (hereinafter referred to as A. N. C. L.)from February, 1958. In response to an advertisement calling forapplications for posts of Special correspondents in the samecompany, the applicant applied by letter R2 dated 12.1.69- Afterfacing an interview by the Board of Editors of A- N. C. L. hewas selected as the District correspondent for Kandy North.He entered into the agreement Rl dated 10.3.69, which is termed“ a contract for the supply of News intelligence and Reports ofevents ”, The preamble recites as follows:
“ Whereas the A. N. C. Lis desirous of procuring
news intelligence reports of events, pictures and other mate-rial suitable for publication in its newspapers, magazines orother publications ; and whereas Yaseratne Gunapala deSilva represents to the company that he is a fit and properperson to supply such news and material relating to allareas in the District of Kandy North ”
and whereas the company has agreed to purchase for itsuse all such news, reports, pictures and information etc.which in its view and judgment is suitable for publication,and the said Y. G. de Silva hereinafter called the vendor, hasagreed to supply daily, hourly or at such intervals as wouldsuit the company’s requirements such news etc. as the com-pany would require relating to all areas in the KandyDistrict ”
Then follow seven clauses of the agreement. The Companyagreed to pay the applicant a monthly “retainer” of Rs. 300for the exclusive purchasing rights over all news etc. obtainedby him. The Company agreed in addition to pay the applicantat rates set out in a schedule for every item of news or informa-tion published in the Company’s newspapers and for every pic-ture used by the Company. The applicant undertook wheneverpossible to supply reports of any special proceedings or eventswhich may interest the Company when so requested by the Com-pany. Provision was also made to procure the accuracy and vera-citv of all news and information supplied, and to vest the copy-right of all news used, in the company. The contract was to re-main in force until 10.9.69, and was renewable by mutual consenton that date, provided it had not been earlier terminated by eachparty giving one month’s notice to the other.
Sri Lanka Law Reports (1978-79) 2 S. L. R.
The contract was renewed on 13 occasions, for periods rangingfrom one year to three months, by the documents R3 to RIO, R12to R14, R17 and R18. The contents of the contracts remainedthe same as in Rl, except that after 1.8.72 the “ retainer ’’ wasreduced from Rs. 300 to Rs. 150 per month, and the rates in theschedule were also reduced. The company did not renew the con-tract R18 which terminated on 28.2.74
The applicant complained to the Labour Tribunal that theCompany unlawfully terminated his services from 28.2.74, and. prayed for reinstatement or compensation in lieu of reinstate-ment, and also for gratuity for past services. The respondentanswered that the applicant was not a “ workman ” employedby the company but that he was an “ Independent contractor ”,and that the Tribunal could not entertain the application. ThePresident has taken the view that there was no contract of em-ployment between the applicant and the Company ; and that thewritten contracts are similar to agreements relating to the sale.and purchase of goods. As the applicant was not a “workman”
■ within the meaning of the Industrial Disputes Act, No. 43 of1950, as amended, the Tribunal has dismissed his application.
The question the Tribunal had to decide was whether theapplicant was a servant or an independent contractor. The dis -tinction between contracts of service and contracts for servicesloomed large at the inquiry. If the applicant was the servant ofthe respondent, then he was employed under series of contract'sof service. If the applicant was not a servant, but an independentcontractor, then he was employed under a series of contractsfor services.
In the course of his submissions at the close of the trial learnedCounsel for the applicant submitted to the Tribunal that “ this
Agreement is a complete fabrication (false device ?)This
contract does not give the real relationship which existed betweenthO parties. I therefore say that we must go outside this contract ”.It was therefore incumbent on the Tribunal to have made a fairanalysis of the evidence led on behalf of the parties to determinethe real relationship that existed between them, for one elementOf the concept of employer and employee which has undergoneconsiderable change in recent times is the notion that the rela-tionship is a purely contractual one. As stated by the Court inIndian Institute of Technology v. Mangat Singh (1) “Employ-ment originally was and still is basically a contract betweenthe employer and the employee. This bilateral relationship ishowever often found to be superseded partly or wholly by status
CA De Silva v. Associated Newspapers of Ceylon Ltd.177
which is contrasted with contract. Status is determined extrin-sically by law and not by agreement between parties. Status maysupersede contract by affecting either of the two parties to it,namely the master or the servant.”, (at p. 194).
Learned Counsel for the appellant has argued before us thatnotwithstanding the written contracts, one must look at the otherevidence relating to the nature of the applicant’s rights and dutiesin order to determine the real relationship between the parties.As the President has depended heavily on the words of the writ-ten contract and has not given much consideration to the otherevidence, oral and documentary, it is necessary to set down insome detail the relevant evidence. From the time he was appoint-ed a group correspondent in 1958 the applicant resided in Kandy.He had to attend the office of the A. N. C, L, daily. That office wassituated in the Bank of Ceylon Building. He made use of theoffice equipment and stationery as well as the telephone installedin that office in the course of his duties. He had to report dailyeither to the Chief Reporter, Mr. Dissanayake or to his assistantMr. Cecil Wickremanayake, who was also called the Kandy NewsEditor. Both of them gave him instructions from time to timeas to what news he had to cover. Wickremanayake maintaineda diary which contained a list of events which the local editorswanted the correspondents to cover. Although R1 did not definethe territorial area of Kandy North, Wickremanayake told himthat it included eight electorates, namely, Kandy, Senkadagala,Teideniya, Minipe, Akurana, Wattegama, Hewaheta and Kunda-salu. When he had to cover events in distant places like Minipehe was paid his expenses for travelling and subsistence althoughthat was not a condition stipulated in Rl. He would sometimesbe instructed by the local editor to cover electorates other thanthe eight mentioned above; and sometimes the head office inColombo would send him special instructions, either by telephoneor by telegram. He produced some of these instructions as con-tained in letters and telegrams marked A1 to A4. He was asked,inter alia, to give full coverage to all inter school (cricket)matches played in his area, to obtain the reactions of the Maha-nayaka and Anunayaka Theras on the abolition of Poya Holidaysand the introduction of Sundays as holidays, and to obtain photo-graphs of some politicians who were contestants at the generalelection, 1970. A5 to A8 are newspaper cuttings of reports sentby him and relate mainly to events outside his area. They includereports of a Rugger Match in Radella between the visiting FrenchRuggerites and an Up Country XV; an account of proceedingsheld in the Magistrate’s Court of Kuliyapitiya in what was known
178Sri Lanka Law Reports (1978-79) 2 S. L. R.
as the Deduru Ova headless murder case; and the death bypoisoning of five persons in Pussellawa area. A9 to A10 are tele-grams requiring his presence at the head office in Colombo. Allthese communications have been addressed to him to the Kandyoffice and not to his residence at Watapuluwa,
Wickremanayake was called as a witness by the applicant. Hewas an officer cn the permanent executive staff of A. N. C. I,.He testified to the fact that district correspondents were expectedto come to his office and to take instructions from him. He gavethem assigments which they had to carry out. Sometimes specialassignments were given by him which would involve correspon-dents going to places outside their normal areas. Sometimes whenthey did not carry out their duties satisfactorily, explanationswere called for. Wickremanayake said that he had occasion tocall for explanations from the Kandy South District correspon-dent, one Senaratne, on several occasions, and had even to reporthim to the local editor and the Chairman of A. N. C. L. Thedocument All is a letter by which the chief administrative officerhad called for an explanation from D. P. Sirisena, the Kurunegalacorrespondent.
When correspondents wanted leave they had to apply forleave either to Wickremanayake or to Russel Gunasekera,Manager of the Kandy office. There were several occasions onwhich leave wras refused. A17 and A18 are leave applicationsmade by the Kandy South correspondent. Leave had beenrecommended by Wickremanayake in each instance. A13 is acircular dated 29.8:72 sent by the editorial administrationdepartment to all correspondents• It contains four guide linesfor “ news suppliers ”, relating to accuracy of reports, absencefrom areas etc.. The respondent points out that theapplicant was not required to obtain leave, but only to informthe local editor of absence from the area in order to enable thepaper to make other arrangements. It would appear, however,that prior to the date of that circular leave had to be obtained,because A17 to A18 relate to a period anterior to August, 1972.
There were occasions when the applicant acted for Wickrema-nayake. There was also the fact that District correspondentscould not delegate their duties. This is understandable becauseaccuracy was tire essence of good reporting and in accuratereports could cause incalculable damage to the paper. Goodwork was rewarded by the payment of bonuses. These were paidmonthly, along with the “ retainer ”.
CA De Silva v. Associated Newspapers of Ceylon Ltd. 179
All this evidence stood uncontradicted. They were relevant tosupport the applicant’s relationship to the company as being thatof a servant to the master; and to establish that notwithstandingthe written contracts, the applicant and District correspondentslike him were “workmen” employed by the Company. ThePresident has however, not attached much weight to this volumeof evidence. He has preferred to act on the written contracts,and has taken the view that the applicant was an independentcontractor.
The Industrial Disputes Act defines “employer” and “work-man ” as follows : —
Unless the context otherwise requires “ employer ” means anyperson who employs or on whose behalf any other person employsany workman; and “ workman ” means any person who hasentered into or works under a contract with an employer in anycapacity, whether the contract is express or implied, oral or inwriting, and whether it is a contract of service or of apprentice-ship, or a contract personally to execute any work or labour,and includes any person ordinarily employed under any suchcontract, whether such person is or is not in employment at anj'particular time-
Decided cases have held that this definition of workman readwith the definition of employer covers a person whose relation-ship with the employer is or has been one of master and servant.An independent contractor is not included in this definition.The Times of Ceylon Ltd. v. Nidahas Karmika Saha WelanaaScvaka Vurthiya Samithiya (2). In Carson Cumberbatch & Co.Ltd. v. Nandasena (3), Tennekoon, C. J. reached the conclusionthat “ a common law contract of service must subsist betweenthe employer and workman before two persons can be regardedas employer and workman ”, at p.84.
Perhaps the best definition of the relationship between masterand servant is that of Salraond : “ A servant may be defined asany person employed by another to work for him on the termsthat he, the servant, is to be subject to the control and directionsof his employer in respect of the manner in which his work is tobo done”, Law of Torts (13th Ed.) 112. This is the orthodoxtest—the right of the employer to control the employee in regardto the manner in which the work is to be done. The test of control,however becomes difficult to apply when the employee exercisesprofessional skill or performs work of a highly technical orscientific nature. “ Superintendence and control cannot be the
180Sri Lanka Law Reports (1978-79) 2 S. L. R.
decisive test when one is dealing with a professional man or aman of some particular skill or experience ”, per Lord Porter inMorren v. Swinton and Pendlebury Borough Council (4) at 351.
The inadequacies of the “control test” have led Judges toformulate other tests in the context of modem industrialcomplexities. One of them, known as the “ integration test ” wasformulated by Lord Denning thus : “ under a contract of servicea man is employed as a part of a business ; and his work is doneas an integral part of the business ; whereas under a contract forservices, his work although done for the business, is not integra-ted into it, but is only accessory to it Stevenson, Jordan andHarrison Ltd. v. McDonald and Evans (5) at 111, or as statedby the same learned Judge in another case ; “ The test of beinga servant does not nowadays depend on submission to orders. Itdepends on whether person is part and parcel of the organisa-tion ” (6) at 971.
In U.S. v. Silk (7), the Supreme Court of the United Stateshas decided that in determining whether certain persons were“ employees ” within the meaning of a statute the test to beapplied is not “ power of control, whether exercised or not, overthe manner of performing service to the undertaking ”, but whe-ther the men were employees “ as a matter of economic realityBased on this decision the English courts have recently evolveda test which is really a refinement of the integration test, andit was stated thus by Cooke, J. in Market Investigations Ltd. v.Minister of Social Security (8) : “ The fundamental test to beapplied is this : Is the person who has engaged himself to performthese services performing them as a person in business on hisown account ? If the answer to the question is ‘ yes ’ then thecontract is a “ contract for services If the answer is ‘ no ’ thenthe contract is a *! contract of service ” (at page 737.)
The facts of that case were briefly these : A company engagedin market research employed several persons as interviewers forshort periods of time. Mrs. I was so engaged on several occasionson agreements whereby she undertook in consideration for a fixedremuneration, to provide her own work and skill. The companywas entitled to specify the persons to be interviewed, the ques.tions to be asked, the order in which they were to be asked andrecorded and how they were to be recorded, and how she shouldprobe for answers. She could be required to attend the company’soffice for instructions or might receive them from a supervisor-During the period of each agreement she could work when shewanted, could undertake similar work for other organisations, andcould not be moved from the area which she agreed to work. There
De Silva v. Associated Newspapers of Ceylon Ltd.
was no provision for holidays, time off or sick pay. The company’sposition was that Mrs. I was employed on a series of contractsfor services. On the question whether whilst working under theagreements with the company Mrs. I was included in the classof “employed persons” (i.e., persons employed under a contract ofservice for the purposes of the National Insurance Act of 1965) ;and whether she was employed in ‘ insurable employment ” withinthe meaning of the National Insurance (Industrial Injuries) Act,1965, the Court held that Mrs. I had been employed under a seriesof contracts of service (and not on a series of contracts for ser-vices) because (i) the extent and degree of control exercised bythe company were consistent with her being employed under acontract of service, and (ii) in particular, not having been shownthat Mrs. I was in business on her own account, the nature andprovisions of the contracts as a whole were consistent, rather thaninconsistent, with there being contracts of service.
Dealing with the company’s argument that Mrs. I’s work wasperformed under a series of contracts, each for a particular andspecific survey, and that the relationship of master and servant isnormally conceived of as a continuous relationship and the factthat ihere is a series of contracts is more consistent with thesecontracts being contracts for services, Cooke, J. observed, “Formy part, I doubt whether this factor can be considered in isola-tion. It must, I think, be considered in connection with the moregeneral question whether Mrs. I could be said to be businesson her own account as an interviewer ” (at p. 740).
In Beloff v. Pressdram Ltd. (9), one of the important questionsfor decision was whether the political and lobby correspondentof the Observer newspaper, who had no written contract of em-ployment with the company, was employed under a contractof service within section 4 (4) of the Copyright Act, 1956. Holdingthat on the facts of the case the plaintiff was employed under acontract of service, Ungoed Thomas, J. said, “The test whichemerges from the authorities seems to me, as Denning, L.J. said,whether on the one hand the employee is employed as part ofthe business and his work is an integral part of the business, orwhether his work is not integrated into the business but is onlyaccessory to it; or as Cooke, J. expressed it, the work is done byhim in business on his own account ” (at p. 250).
Learned Counsel for the respondent submits that the integraltest and the economic reality test are not applicable where ser-vices are performed in terms of written contracts, as in this case.He also posed the question as to whether a person who habitually
Sri Lanka Law Reports (1978-79) 2 S. L.R.
sells all the vegetables to a particular hotel, or an insurer whoinsures all the hiring cars of a travel firm should be consideredas an integral part of the business of the hotel or the travel firmand thus be treated as employees of the latter. Further, if allthe international news of the company is obtained exclusivelythrough Reuters for 25 years, do Reuters become its employees ?Even if one were to apply the test of control, in his submission,the company did not instruct the applicant as to the means ofdoing his work. Although it is legitimate and necessary to instructan independent contractor as to what work he should do, thecompany did not even instruct him as to what he should do.Whatever test is applied, Counsel contends, the facts of this casedo not show that the applicant wras a servant or workman em-ployed by the company.
Let us first apply the control test. There was a stipulation asto the salary, although it was called by another name. Whethera monthly payment made to another is termed a salary or re-tainer does not alter the legal position. Even if no news wassupplied by him, the applicant was entitled to this payment.The applicant had to reside in the Kandy District. He had toattend the company’s office and obtain instructions from the localeditor. Special assignments were sometimes made by the headoffice. For carrying out these items of work he was paid accordingto a schedule of rates. At least prior to 1972 leave had to heapplied for and obtained. Bonus payments were given for goodwork done—hardly consistent with the treatment meted out toan independent contractor. These are all features which areprominent in contracts of service, and inconsistent with contractsfor services.
A point was made of the fact that employer and employee didnot contribute to the Employees’ Provident Fund. But it has tobe remembered that constributions to that Fund depended onwhether a particular employment was a “ covered employment ”.Even in the case of a covered employment, the failure to contri -bute to the Fund would certainly not be a circumstance fromwhich the relationship of the parties could be gathered.
Counsel for the respondent says that the fact that the con-tract makes no provision for leave suggests that it is not a con-tract of service. I cannot accept that this is a test of much assis-tance when contracts of service are entered into for fixed shortperiods, with no provision for leave, off time, etc. The fact thatthe applicant was free to work for others is also not inconsistentwith the existence of a contract of service. It is by no means anecessary incident of a contract of service that the servant isprohibited from serving any other employer.
CA De Silva v. Associated Newspapers of Ceylon Ltd. 183
There are certain features which go to show that the controlwhich the Company had the right to exercise was, however,limited in various ways. But that control appears to have beenvery extensive in this case. It was so extensive as to be entirelyconsistent with the applicant being employed under a contractof service on each occasion on which he engaged himself to supplynews to the Company by providing his own work and skill in theperformance of a service to the Company. The opportunity todeploy individual skill and personality is frequently present inwhat is undoubtedly a contract of service.
The answers to the questions posed by learned Counsel for therespondent are apparent when one applies the tests of integra-tion and economic reality. Reuters is a business establishmentdoing business on its own account. So is the vegetable vendorwho supplies all the vegetables required by a particular hotel.But the correspondents of this group of newspapers were certain-ly not doing business on their own account. They were employedas part and parcel of the company’s business of newspaper pub-lishers ; they were an integral part of the company’s business,and not merely accessory to it. They were therefore employedunder contracts of service by the company, and were “ workmen ”within the meaning of the Industrial Disputes Act.
But the applicant was employed under a series of contracts ofemployment for fixed terms. A ‘ fixed term ’ contract is one underwhich a person is employed for a fixed term without any guaran-tee that the contract would be renewed on the expiry of thestipulated period, the contract coming to an end by consensualtermination at the end of the agreed period. Where a contractfor a fixed term is not renewed, the employee would have noclaim to reinstatement before a Labour Tribunal; because aclaim for reinstatement can be made before a Labour Tribunalunder section 31B (1) (a) of the Act only if his services areterminated by the employer. But a fixed term contract is termi-nated not by the employer, but by mutual agreement, on theeffluxion of time.
The position would have been different had the question ofthe non-employment of the applicant and of other District cor-respondents gone before an Industrial Court or an Arbitra-tor. Section 48 of the Act defines an ‘ Industrial dispute ’ asmeaning any dispute between an employer and a workman
connected with the employment or non-employment
of any person. These words appear to be wide enough
Sri Lanka Law Reports (1978-79) 2 S.L.R.
to cover the case of non-renewal of a series of contracts of em-ployment for fixed periods, if they have given rise to an impliedpromise or understanding that the employer would renew thecontract in the absence of misconduct or inefficiency-
The reliefs of reinstatement or compensation in lieu thereofwere therefore reliefs which the Labour Tribunal had no juris-diction to grant. But the Tribunal had the jurisdiction to orderpayment of gratuity on the basis that the applicant had beenemployed as a “ workman ” by the company from February 1958up to 28.2.74—a period of 16 years.
The contracts of employment in the present case have no provi-sion for the payment of gratuity. In that sense gratuity is not“ legally due ”. Even where a gratuity is not legally due a labourtribunal may consider whether it is just and equitable to granta gratuity. But since the decision in The National Union ofWorkers v. The Scottish Ceylon Tea Co., Ltd. (10), a tribunal’sjurisdiction to award gratuity is limited to cases where anemployee’s services have come to an end in circumstances whichamount to “ a retiral situation I am of the view that when afixed term contract of employment is not renewed by theemployer for reasons other than misconduct or inefficiency onthe part of the employee, then a retiral situation arises, whichgives rise to a claim for gratuity.
The applicant, in concluding his evidence in chief, stated thathe left “ the question of gratuity and compensation to liveTribunal”. Just after that he said that his salary was aboutRs. 700 per month. That would include the retainer, paymentsfor news items supplied at the schedule rates, special paymentsfor feature articles and bonuses. This evidence has not beencontradicted by the company. It seems, therefore, that havingregard to the good work put in by the applicant, as testified toby Wickremanayake. Rs. 700 per month would be a safe guidefor the computation of gratuity on the basis of an unbrokenperiod of 16 years service. Whilst dismissing the applicant’sclaim for reinstatement and compensation, I would allow himclaim for gratuity, and award him a sum of Rs. 11,200. To thatextent this appeal is allowed, with costs fixed at Rs. 500 payableby the respondent.
TAMBIAH, J.—I agree.
Appeal allowed and gratuity awarded.