DIGEST

010-SLLR-SLLR-1993-2-DIGEST.pdf


DIGEST
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ARBITRATION – See Certiorari
CERTIORARI – Industrial Dispute – Reference to arbitration undersection 4 (1) of the Industrial Disputes Act – Payment ofNon-recurring cost of living gratuity (NRCLG) – CollectiveAgreement – Partial extension under s. 10 (2) of IndustrialDisputes Act – Implied term of contract – Ultra vires.
Ferwin & Company Ltd., v. Dr. Ranjith Atapattu andOthers
(continued from Part 2)
CIVIL PROCEDURE – See Landlord and tenant
COLLECTIVE AGREEMENT – See Certiorari
CRIMINAL LAW – Abduction and Rape – Section 354 and 364 ofthe Penal Code – Sentence – Revision of sentence – Dothe provisions of S. 306 of the Code of Criminal ProcedureAct apply to the High Court? Section 364 of Code ofCriminal Procedure Act No. 15 of 1979 – Considerationsaffecting sentence for the offence of rape – Aggravatingcircumstances – Failure by AG to exercise right of appealunder s. 15 (b) does not preclude his right to seek revisionunder s. 364 of Code of Criminal Procedure Act.
Attorney-General v. Ranasinghe and others81
(Continued in Part 4)
EVIDENCE ORDINANCE – See Landlord and tenant
FUNDAMENTAL RIGHTS – Illegal detention – Torture – Articles13 (1), 27, 11 of the Constitution.
Wimal Vidyamani v. Lt. Col. Jayatilleke and others64
INDUSTRIAL DISPUTES ACT – See Certiorari
LANDLORD AND TENANT – Rent Act – Ejectment for arrears ofrent – Tenant's claim for repairs set off against rent -Payment to court – Sections 13(1) and 22 (3)(c) of theRent Act – Section 409 of the Civil Procedure Code -Section 91 of the Evidence Ordinance.
Jayakody v. Lilian Perera74
RAPE – See Criminal Law
SENTENCE – See Criminal Law
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Frewin & Company Ud., v. Dr. Ranjith Atapattu and Others
(S. N. Silva, J.)
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Court in 1982, the petitioner continued to pay a N.R.C.LG. up to1988 and that this payment constituted an implied term of the contractof employment. It was further submitted that the statement of thematter in dispute does not refer to clause 17 of the CollectiveAgreement and that the dispute before the arbitrator is whether thenon-payment of what was paid earlier, for the year ending31-08-1988 is justified. As regards the second ground it wassubmitted that the termination of employment, as far as the workmenare concerned, took place only on 10-04-1989, after the referencewas made by the 1st Respondent and that the reference is notfrustrated by the termination. In any event, it was submitted that thetermination is contrary to the provisions of the Termination ofEmployment of Workmen (Special Provisions) Act and is null and void.
Learned Senior State Counsel appearing for the 1st and 2ndRespondents submitted that the reference to arbitration was madeon the basis of the correspondence 2R1 to 2R9 and because thepetitioner failed to make any endeavour to settle the industrial disputethat had arisen. It was further submitted that the order of the Ministerrefering the dispute to arbitration is not subject to review in anapplication for a Writ of Certiorari. That, in any event, the complaintof the petitioner is with regard to the contents of the statement ofthe matter in dispute (b) and that the reference itself could not bequashed as invalid.
The first ground of learned President's Counsel for the petitionerdraws in issue the basis of the payment of a N.R.C.LG. to workmenof the petitioner (including the 22 workmen named in "B'1) prior to1988. It is not disputed that the payment of a N.R.C.LG. by thepetitioner commenced upon the purported extension of clause 17 ofthe Collective Agreement (e) by the order (d) of the Minister. It wasthe submission of learned President's Counsel that the concept ofan N.R.C.LG., the qualifying period of its payment and the formulaof its computation are referable only to clause 17 and not to anyother source such as the common law, statute law, custom or thecontract of employment. Learned Counsel for the 3rd Respondentsubmitted that a N.R.C.LG. was a known component of theemoluments of workmen even prior to Collective Agreement (e) andproduced with his further written submission, Collective AgreementNo. 5 of 1967 of which clause 15 provides for such a payment. Itis Counsel's contention that after the Supreme Court declared that
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a partial extension of a Collective Agreement is invalid in 1982 thepetitioner continued to pay a N.R.C.L.G. to its workmen for five yearsupto 1987 and that the payment had become an implied term ofcontract. Learned President's Counsel replied that CollectiveAgreement No. 5 of 1967 referred above and Collective Agreement3J of 1972 (e) relate to two different segments of workmen andsubmitted that the payment cannot become an implied term of contractsince it was made upon a mistake of law.
As noted above it is common ground that the payment of aN.R.C.L.G. was not originally provided for in the contract ofemployment and that the petitioner commenced payment on thebasis of order (d) extending clause 17 of Collective Agreement No.5 (£). Therefore the reference to a N.R.C.L.G. in the provisions ofCollective Agreement No. 5 of 1967 does not give this payment adifferent status or recognition, it is a payment due under CollectiveAgreements and no more.
The submission that the payment became an implied term ofcontract raises further issues as to the circumstances in which aterm of contract may be implied. An implied term may be derivedin one of three ways. They are by custom, statute law or inferencesdrawn by judges to reinforce the words of the contract in order torealise the manifest intention of the parties. (Law of Contract, byCheshire and Fifoot 1986 11th Ed. p 126; Law of Contracts Vol. 11,Weeramantry, p 571-574). A term of contract cannot be implied ona mere assertion of one of the parties to the contract or on theconduct of the other. In the absence of custom or statute an impliedterm cannot be added merely on the ground of reasonableness butits existence must be a necessary implication from the circumstancesof the case and language of the contract (Weeramantry p 572).
In the case of the Ceylon Mercantile Union vs Aitken Spence &Co. Ltd., (Z) a bench of two judges of this Court held that incalculating compensation payable to a workman upon a wrongfultermination, the cost of living gratuity paid on the basis of an invalidpartial extension of a Collective Agreement (as in this case) neednot be taken into account. Anandacoomaraswamy, J. observed asfollows :
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Frewin & Company Ltd., v. Dr. Ranjith Atapattu and Others
(S. N. Silva, J.)
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0 I see no reason why the workmen should be benefited bythe Cost of Living Gratuity Allowance provided in the provisionsof the Collective Agreement. It is common ground that theRespondent was not a party to the Collective Agreement. The merefact that such an allowance had been paid by the employer andthe workmen enjoyed that benefit does not mean that it is theworkmen's right to receive compensation on that basis, if theworkmen choose to take shelter not under the CollectiveAgreement but under the contract."
For the purposes of this case it is not necessary to decide whethera N.R.C.L.G. is payable as an implied term of contract as contendedfor by learned Counsel for the 3rd Respondent. The Court isconcerned only with the validity of the reference to arbitration. Asnoted above a N.R.C.L.G. was paid to the workmen by the petitioneron the basis of a purported extension of clause 17 of the CollectiveAgreement to the industry of the petitioner. On the basis of thejudgment of the Supreme Court in the case of A. F. Jones(Exporters) Ceylon Ltd. vs Balasubramaniam (Supra) followed by theSupreme Court in the case of Ceylon Printers Ltd. vs EksathKamkaru Samithiya (3), it is now settled law that a partial extensionof a Collective Agreement by the Minister to any other industryis not permitted by section 10 (2) of the Industrial Disputes Act andis ultra vires and of no force or effect. This matter is conceded bylearned Counsel^ for the petitioner. Therefore what has to beconsidered is whether the reference to arbitration proceeds onthe assumption that a N.R.C.L.G. is payable. If so, whether thatassumption results in the reference being ultra vires as contendedfor by learned President's Counsel or, whether the assumption isvaild on the basis that the payment of a N.R.C.L.G. had becomean implied term of contract as contended for by learned Counsel forthe 3rd Respondent.
The order of the Minister (a) refers to arbitration, the industrialdispute “ in respect of the matter specified in the statement of theCommissioner of Labour which accompanies this order". Thereforethe order of reference to arbitration (a) and the statement of thematter in dispute (£>) are not severable as submitted by learned SeniorState Counsel. They are necessarily inter-connected. They have tobe taken together in considering the validity of the reference toarbitration.
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The relevant portion of the statement of the matter in dispute (b)is as follows :
" The matter in dispute between the aforesaid parties is whetherthe non payment of the balance non-recurring cost of living gratuityfor the period from 01.09.87 to 31.08.88 to the following employeeswho are members of the Eksath Kamkaru Samithiya by theManagement of Frewin and Co., Ltd., is justified and to what reliefeach of them is entitled. "
The words " whether the non payment of the balance non-recurringcost of living gratuity for the period from 01-09-1987 to 31-08-88 to
the following employees" assume that a N.R.C.L.G. is payable
to the named employees for the specified period. It is plain that abalance can be conceived of only in relation to an identifiable fullor total amount. It is in this context that the submission of learnedPresident's Counsel gains acceptance. His submission is that thephrase ” non-recurring cost of living gratuity ", as the title of thepayment, the period of one year specified and the implication thatan whole amount is payable are all referable to clause 17 of theCollective Agreement.
As noted above, a payment characterised as a non-recurring costof living gratuity was brought about by Collective agreements. It isnot there in the ordinary contracts of employment of the workmenor in any other statute law. According to clause 17 of the CollectiveAgreement the consolidated wages as specified in the secondschedule are fixed on the basis of the Colombo Consumers PriceIndex being 137.5. On that basis the clause provides a formula forthe payment of a Non-recurring Cost of Living Gratuity for a qualifyingperiod every year, from 1st September to 31st August. The paymentis a sum of Rs. 2.00 in respect of each complete point the PriceIndex had gone up from the specified figure of 137.5. The annualpayment is of the total sum due for each month calculated on thesaid formula. It is thus seen that the title of the payment, the periodspecified in the statement and the implication that an whole amountis due are necessarily referable to clause 17. Learned Counsel forthe 3rd Respondent sought to explain these matters on the basisthat the amount due could be calculated on the previous year'spayment without reference to clause 17. It was in this connectionthat he submitted that payment had become an implied term ofcontract.
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(S. N. Silva, J.)
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This submission raises the further question whether the Minister canassume that there is an implied term of contract when the partiesare at issue as to whether any payment is due at all. It is the caseof the petitioner that in the previous years, the Company made thepayment on a mistake of law that clause 17 was binding on it byvirtue of the purported extension of that clause to the industry of thepetitioner by order (a) of the Minister. As noted above a term canbe implied as being in a contract only on one of three grounds ofstatute, custom or a necessary inference drawn by a Court from thewords of the contract and the circumstances of the case. It cannotbe implied merely on the assertion of a party or the conduct of oneof the parties. Certainly, the Minister is not clothed with any judicialpower to enable him to assume that a term of contract is implied.In the circumstances I do not see any merit in the submission oflearned Counsel for the 3rd Respondent. On the other hand thestatement of the matter in dispute (b), comprehended in the only wayit could possibly be done, is seen as proceeding on the assumptionthat a payment is due, as describe*.' in clause 17 of the CollectiveAgreement. Then, the subsmission of learned President's Counselthat the Minister is by the reference seeking to do indirectly whathe cannot do directly in extending clause 17 to the industry of thepetitioner as purported to be done by order (d), has to be accepted.The principle that an authority cannot do indirectly or circuitouslywhat he cannot do directly, is settled law. In the case of KodakanPillai vs Mudanayake (4), the Privy Counsel observed that eventhe Parliament ‘being the supreme legislative body, cannot doindirectly or circuitously what it cannot do directly. In the case ofBandaranaike vs Weeraratne and Others (s>, Samarawickrama, J.delivering a judgment of a bench of three judges of the SupremeCourt observed as follows :
" There is a general rule in construction of statutes that whata Court or person is prohibited from doing directly it may not doindirectly or in a circuitous manner
This principle which is a limitation on the power or the authorityof the supreme legislative body and the Courts, should surely be alimitation on the power of a member of the Executive such as theMinister. The petitioner is seriously affected by the reference toarbitration of the dispute in the manner described in the statement
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. It precludes the petitioner from urging before the arbitrator thatquite apart from the balance N.R.C.L.G. which has been referred toarbitration, no amount whatever is due as N.R.C.L.G. since theextension of clause 17 to the industry of the petitioner as purportedto be done by order (d) of the Minister, is invalid and that paymentswere made on a mistake of law. Therefore in any event the referenceto arbitration is bad in law since it is based on an irrelevantconsideration that a N.R.C.L.G. is payable by the petitioner to theworkmen concerned. The real dispute between the parties appearsto be whether in the first instance a N.R.C.L.G. is payable by thepetitioner to the workmen concerned and if so, the amountso payable. The reference has been made on this irrelevantconsideration because the 2nd Respondent has failed to obtain theviews of the parties with regard to the payment of a N.R.C.L.G. Theclaim for a " balance N.R.C.L.G. due in respect of the period 1stSeptember 1987 to 31st August 1988 " is contained in the letterdated 10-10-1988 sent by the 3rd Respondent to the petitioner withcopy to the 2nd Respondent. It appears from the correspondencefiled (marked 2R1 to 2R9) that the 2nd Respondent did not seekthe views of the petitioner as to this matter. The petitioner wasrequested to attend an interview with regard to the matter stated inthe letter dated 20-10-1988 sent by the 3rd Respondent (2R2 and2R3). These letters relate to an entirely different dispute with regardto intimidatory action by a director of the petitioner Company. Thesubsequent letters inviting the petitioner to attend an interview alsorelates to these matters and not to the matter of the N.R.C.L.G.Therefore, the response of the petitioner (2R7) does not contain anyreference to the question of a N.R.C.L.G. In these circumstancesI am of the view that the 2nd Respondent has failed to indentify thetrue matters in dispute between the parties with regard to the claimfor a N.R.C.L.G. as contained in the letter dated 10-10-1988 (2R1)of the 3rd Respondent. I have to observe that the statement of thematter in dispute (b) is based almost entirely on paragraph (a) of2R1.
Finally, I have to consider the submission of learned SeniorState Counsel that the order of reference to arbitration made by theMinister is not in any event subject to review in an application fora Writ of Certiorari. Learned Senior State Counsel sought to supportthis submission on the judgment of Pathirana, J. in the case ofAislaby Estates Ltd. vs Weerasekera, (6>. In that case a reference
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(S. N. Silva, J.)
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to arbitration was sought to be quashed on the basis inter alia,that the Minister had previously decided that the dispute should notbe referred to arbitration.
Pathirana, J. characterised the act of the Minister in makingan order of reference under section 4 (1) of the Industrial DisputesAct as an administrative act and observed that " the court cannotobjectively review that decision (p250). At a later stage in thejudgment (p254) the finding in the case is stated as follows :
" I, therefore, hold that the Minister's decision under section4 (1) in the circumstances of this case and his reference dated15th April, 1968 to the Labour tribunal (v) for settlement byarbitration cannot be questioned by the Court, and is a validdecision. "
It is seen from this finding that the judgment in the casedoes not go so far as to hold that a reference made by theMinister under section 4 (1) is not subject to review even in asituation where the Minister has acted ultra vires. Furthermore, thefinding is specifically that in the circumstances of that case theMinister's decision is valid. On the other hand, in the case of NadarajaLtd. vs Krishnadasan, (7> a bench of three judges of the SupremeCourt issued a Writ of Certiorari quashing a second reference madeby the Minister to another arbitrator, at a time when earlier referencemade in respect of the same dispute was pending. Sharvananda, J.(as he then was) held that the second reference was “ invalid inlaw as being in excess of the powers of the Minister." (p264). Thedescription of the order of reference by the Minister as an admin-istrative act by Pathirana, J. in the Aislaby Estates case (supra), doesnot have the effect of removing it altogether from the pale of judicialreview. As noted by Sharvananda, J. in Krishnadasan's case " thoughthe order of reference under section 4 (1) may be administrative inmotivation, yet the order, according to the scheme of the Act, isdesigned to eventuate by a quasi-judicial process, in an award potentwith consequences to the parties". (p261). The decision in that caseis authority for the proposition that an order of the Minister referinga dispute to arbitration, made under section 4 (1), is subject to judicialreview on the ground that it is ultra vires. For the reasons statedabove I hold that the order of reference of the Minister (a) and thestatement of the matter in dispute (f>), constituting the reference
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to arbitration is ultra vires and of no force in law. In view of thisfinding it is unnecessary to consider the second ground urged bylearned President's Counsel for the petitioner. The application isallowed and the petitioner is granted the relief prayed for inparagraphs (c) and (dj of the prayer to the petition. I make no orderfor cost in the circumstances of this case.
Application allowed.