033-SLLR-SLLR-2004-V-1-ELPITIYA-PLANTATION-LTD-v.-CEYLON-ESTATES-STAFF-UNION-ON-BEHALF-OF-V.I-G.pdf
sc
Elpitiya Plantations Ltd. v Ceylon Estates Staff Union
(on behalf of V.l. George) and others (Yapa, J.)
239
ELPITIYA PLANTATIONS LTDvCEYLON ESTATES STAFFUNION (ON BEHALF OF V.l. GEORGE) AND OTHERSSUPREME COURTBANDARANAYAKE, J.
EDUSSURIYA, J. ANDYAPA, J.
SC APPEAL NO. 70/2002
H.C. A.LT. NO. 3/98 KANDY
LT. NO. LT 9/TK 1241/95
SEPTEMBER 23 AND OCTOBER 01 2003
Industrial Dispute – Retirement of workman at 55 years of age – Grant ofextensions up to 60 years – Discretion of the employer.
The respondent Union acting on behalf of the workman George com-plained to the Labour Tribunal that the appellant (the employer) had unjustlyterminated the workman’s services at 55 years of age. The Labour Tribunaldismissed the application by order dated 19.12.1997.
The workman had been a driver employed in 1992. Prior to his retirementhis services had been terminated for misconduct, viz., driving under the influ-ence of liqour. The Labour Tribunal reinstated him without back wages.
Having regard to his unsatisfactory services, the employer retired the work-man at 55 years.
On an appeal by the Union against the retirement, the High Court by itsorder dated 26.2.2002 held that the termination of services was unjust andordered his reinstatement from 1.11.94 with back wages. At the time of theHigh Court decision the workman was 63 years of age.
Held:
The optional age of retirement with the employer was 55 years, subjectto annual extensions until 60 year which is the compulsory age of retire-ment.
Whether extensions of services may be given is a discretion on the partof the employer.
The termination of the workman’s services at 55 was not unjust orinequitable.
240
Sri Lanka Law Reports
[2004] 1 Sri L.R
Cases referred to:
Maskeliya Plantations Ltdv Arulananthan – CA Application No. 248/95of 2.10.1995
Shanmugam v Maskeliya Plantations Ltd. – (1996) 1 Sri LR 208APPEAL from the order of the High Court of Kandy
Gomin Dayasiri with Manori Jinadasa for appellantGeoffrey Alagaratnam with M. Sithambaram for respondent
Cur.adv.vult
January 29, 2004HECTOR YAPA, J.
The applicant-appellant-respondent-respondent (hereinafter 01referred to as the 1st respondent) made an application to the LabourTribunal against the respondent-respondent-petitioner-appellant(hereinafter referred to as the appellant) and 2nd and 3rd respon-dents-respondents-respondents-respondents (hereinafter referred toas the 2nd and 3rd respondents) alleging that the services of one ofits members V.I.George (hereinafter referred to as the “the work-man") had been unjustly terminated and sought reinstatement withbackwages or compensation in lieu of reinstatement.
The appellant filed answer denying the termination of the ser- 10vices of the workman and stated that the workman was retired fromservice on his reaching the age of retirement, namely 55 years. Itwas further averred by the appellant that the workman’s past recordof service was unsatisfactory. Thereupon the 1 st respondent filedreplication stating that even though the workman had reached theage of 55 years, he was entitled to work till 60 years of age. Afterinquiry, learned President of the Labour Tribunal by his order dated19.12.1997, held that the workman had been duly retired by theappellant and was therefore not entitled to any relief.
The 1st respondent appealed against the said order of the 20Labour Tribunal to the High Court of Kandy. The learned High CourtJudge after hearing the parties by his order dated 26.02.2002, held
Elpitiya Plantations Ltd. v Ceylon Estates Staff Union
SC(on behalf of V.l. George) and others (Yapa, J.)241
that the retirement of the workman on his reaching 55 years of agewas unjust and inequitable and therefore directed the appellant toreinstate the workman from 01.11.1994 with back wages.Aggrieved by this order of the High Court, the appellant made anapplication for leave to appeal to the Supreme Court and on04.09.2002 the Supreme Court granted leave to appeal on the fol-lowing questions of law.
Is the order of reinstatement with backwages justifiable inrespect of a workman who is almost 63 years of age,when the 1st respondent claims that the compulsory ageof retirement is 60 years and the petitioner (appellant)claims that the retiring age is 55 years.
Has the High Court Judge failed to consider that the oraland documentary evidence presented, which establishedthat the retiring age was 55 years, and has he therebymisdirected himself?
At the hearing of this appeal learned counsel for the appellantsubmitted that the retiring age of the employees in the PlantationSector has been 55 years and the compulsory age of retirementhas been 60 years. Further, the practice has been to retire suchemployees at the age of 55 years and to consider the grant ofextensions on an yearly basis up to 60 years at the discretion of theemployer. In the absence of any material governing the age ofretirement, learned counsel referred to the document ‘A’ which hasbeen considered in this case to show that the practice was to retirethe Plantation employees at 55 years of age and that the compul-sory age-.of retirement remained at 60 years. However, learnedcounsel submitted that the document ‘A’ did not apply to this casefor the reason that the appellant was now a privatized company.The document ‘A’ dated 03.08.1994 has been issued by theSecretary, Ministry of Plantation Industries and it reads as follows.
Retirement of employees over 55 years of age
As retirement of empioyees over 55 years in thePlantation Sector is before the judiciary, it has beendecided to suspend retirement of employees after 55years of age, till a decision is made on this matter by thejudiciary. However compulsory retirement age of 60years remains unchanged.
30
40
50
60
242
Sri Lanka Law Reports
{2004} 1 Sri L.R
Learned counsel for the appellant contended that, even thoughthe document ‘A’ has no application to this case, it would show thatthe practice in the Plantation Sector was to retire employees at 55years and the compulsory age of retirement was 60 years. Further,counsel submitted that, if the retirement age of the Plantationemployees prior to document ‘A’ was not 55 years, the decision tosuspend the retirement of employees at 55 years would not arise.Therefore, counsel sought to argue that the document ‘A’ clearlydemonstrates the position that previously in the Plantation Sectorthe employees were retired at 55 years, and the compulsory age of 70retirement remained at 60 years. Hence, he submitted that, at thetime the workman was given employment in the year 1992, thepractice was to retire employees at 55 years of age and any exten-sion of service was at the discretion of the management to be con-sidered annually up to 60 years which was the compulsory age ofretirement. However, due to privatization when the appellantbecame a non governmental entity, namely a limited liability com-pany, it took over the contracts of employment of the employees onthe same terms and conditions that were in existence at the time ofthe take over. The Gazette notification dated 22.06.1992 marked ‘Z’ 80makes this position clear. Learned counsel therefore submitted thatthe appellant presently is an independent legal entity with no nexusto a Public Corporation or Statutory body of the State. The employ-ees of the appellant from the date of the Gazette notification wereemployees of the private sector and not of the public sector. Assuch the decision made by the Ministry of Plantation Industries tosuspend the retiring age of 55 years of the employees of the plan-tation sector is not binding on the appellant. Learned counsel there-fore argued that the extension of service of the workman after 55years was at the discretion of the appellant and in this case having goregard to the unsatisfactory service record of the workman therewas no question of granting an extension. Hence, he submitted thatthe decision of the appellant to retire the workman at 55 years wasjust and proper.-
Without conceding the fact that document ‘A’ applied in thiscase, Counsel further submitted that, even if document ‘A’ whichsuspended the policy to retire employees after 55 years of age tilla decision was made by the judiciary was applied, the position
sc
Elpitiya Plantations Ltd. v Ceylon Estates Staff Union
(on behalf of V.l. George) and others (Yapa, J.)
243
would remain the same. In this regard counsel referred to the caseof Maskeliya Plantations Ltd. v K. ArulananthanW decided on29.10.1995 and the case of Shanmugam v Maskeliya PlantationsLtd (2)- where it has been clearly acknowledged the position that, inthe case of employees in the Plantation Sector the optional age ofretirement is 55 years and any extension of service until 60 yearsis at the discretion of the employer. Hence in the case of MaskeliyaPlantations Ltd. v Arulanathan the Court observed as follows.“Even if one were to give a beneficial interpretation to relevant cir-culars of the S.L.S.P.C., Circular No. 55, No. 170 and No. 329 allthese circulars gave the optional age of retirement as 55.Thereafter, the extension was at the discretion of the management.In my view the petitioner was aware that the extension was at thediscretion of the management and as a matter of right he was notentitled to get an extension so he was not and could not expect towork till he reached the 60th year.”
The counsel submitted that in the circumstances even if deci-sions of Court are taken into consideration it is clear that the option-al age of retirement of all grades of employees of the Sri LankaState Plantation Corporation or in the Plantation Sector was at 55years and any extensions till 60 years was at the discretion of themanagement on an yearly basis.
The workman in this case was a lorry driver who was previous-ly dismissed from service for driving a lorry under the influence ofliquor and reinstated in service by the Labour Tribunal without backwages, since his conduct was considered by the President of theLabour Tribunal as blameworthy. Even after reinstatement, theworkman was not given regular duties but was paid his salary andkept as a relief driver. Under the circumstances, having regard tothe unsatisfactory record of his service the appellant had exercisedits discretion not to grant any extension of service but to retire himat 55 years. Therefore, learned counsel for the appellant submittedthat the Labour Tribunal was correct when it held that the retirementof the workman was just and equitable. He further submitted thatthe learned High Court Judge was in serious error when he decid-ed to reinstate the workman with back wages.
100
110
120
130
244
Sri Lanka Law Reports
[2004] 1 Sri L.R
Learned counsel for the 1st respondent on the other handsought to justify the order of the learned High Court Judge dated
He submitted that the High Court Judge’s order wasbased on a correct assessment of the documents marked A, & Bannexed to the replication of the 1st respondent. Document ‘A’referred to above was addressed to the Chief Executive Officer of 140all the Regional Plantation Companies and it suspended the retire-ment of employees on reaching 55 years, till a decision was madeon the matter by the judiciary. Document ‘B’ stated that where retir-ing policy is stipulated in a collective agreement, document ‘A’ willnot be applicable. Therefore where there is a collective agreementrelating to retirement rules of the collective agreement will applyand not document ‘A’. However, according to Counsel for the 1strespondent, there was no collective agreement applicable to thedrivers and therefore it was the document ‘A’ which suspended theretirement of employees after 55 years that was applicable to this 150case. Hence, counsel submitted that the learned High Court Judgewas correct when he held that in the absence of proof that therewas a collective agreement applicable to a driver, the workman wasgoverned by document ‘A’ and therefore the retirement of the work-man on his reaching 55 years of age was unjust and inequitable.
In view of the submissions made by counsel in this case, onematter to be decided here would be the applicability or non applic-ability of document ‘A’. According to counsel for the appellant, sincethe appellant is presently a private company, document ‘A’ has noapplication. Consequent to privatization the appellant took over the 160contracts of employment of the employees in the plantation sectoron the same terms and conditions that were in the existence at thetime of the take over. (Vide gazette marked Z). The earlier practicein the Plantation Sector was to retire the employees after 55 yearsand any extension of service up to 60 years on an yearly basis wasat the discretion of the management. This position is clear from thedocument ‘A’ which sought to suspend the retirement of employeesin the Plantation Sector after 55 years of age. If one were to holdas submitted by counsel for the appellant that, the appellant is a pri-vate concern, and therefore document ‘A’ did not apply, then this 170case has to be decided by applying the practice that prevailed priorto the issue of document ‘A’ seeking to suspend the retirement of
sc
Elpitiya Plantations Ltd. v Ceylon Estates Staff Union
(on behalf of V.l. George) and others (Yapa, J.)
245
employees in the Plantation Sector after 55 years. In which eventthe workmen could be retired after 55 years and any extension wasat the discretion of the appellant.
If on the other hand the submission of learned counsel for the1st respondent is accepted that document ‘A’ which suspended theretirement of employees over 55 years in the Plantation Sectorapplied to this case, then it is seen from the two cases referred toabove that the judiciary has clearly accepted the position that the isooptional age of retirement of employees in the Plantation Sector as55 years and that any extension of service was at the discretion ofthe employer or the management. Therefore, as a matter of right aworkman was not entitled to get an extension. Regard to thesecases learned counsel for the 1st respondent sought to argue thatthe said cases do not concern drivers but related to officers such asSuperintendents and therefore these judgments will not apply tothis case. It is to be noted that document ‘A’ is of general applica-tion to employees of the Plantation Sector and therefore such a dis-tinction as suggested by counsel will not be permissible. Since doc- 190ument ‘A’ is of general application, it is seen that the judiciary hasdecided that any extension of service after 55 years is at the solediscretion of the employer. What is important here is that the dis-cretion should be exercised in a reasonable and equitable manner.Therefore irrespective of whether document ‘A’ applies or not, theoptional age of retirement of the workman was 55 years. Any exten-sion of service of the workman after 55 years was at the discretionof the management. Hence the decision of the appellant to retirethe workman from service on his reaching 55 years without extend-ing his services has been due to his unsatisfactory service record. 200Such a decision cannot be held to be unjust and inequitable.
In this case learned High Court Judge has concluded that interms of document ‘A’ the compulsory age of retirement of the work-man was 60 years and therefore the retirement of the workman at55 years was unjust and inequitable. However as seen from thematerial referred to above, irrespective of whether document ‘A’applied or not, the optional age of retirement of the workman was55 years and any extension of service was at the discretion of themanagement. Hence the workman was not entitled to any exten-sion as a matter of right. Therefore, one cannot blame the appellant 210
246
Sri Lanka Law Reports
[2004] 1 Sri L.R
for not extending the services of the workman after 55 years hav-ing regard to his unsatisfactory service record.
For the aforesaid reasons first question of law is answered in thenegative and the second question of law is answered in the affir-mative. Accordingly, the judgment of the High Court dated26.02.2002 is set aside and the appeal is allowed with costs fixedat Rs. 2,100/-
BANDARANAYAKE, J. – I agree.
EDUSSURIYA, J.I agree.
• Appeal allowed