We wish you every success and hope you will have a long andhappy career with us.”
It is signed by a Director on behalf of the Company. It alsocontained certain conditions in regard to the termination of theappellant's services, after confirmation, by either party upon notice orby the Company without notice. The appellant accepted thisappointment and was, after the expiration of the probationary period,confirmed in and functioned as the Purchasing Officer of .theCompany until the present dispute arose about three years later.
In or about August 1985 the Company decided to set up asubsidiary company – Fairline Crescent – located at Pettah (wheremost of the purchasing work had to be done) to handle its overallpurchasing functions. On 7th August 1985 the Company, through its
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General Manager (Lovell), addressed the following memorandum(A5) to the appellant:
“It has been agreed with the Chairman that you will no longer berequired to attend to purchasing mainly because this function is beingdelegated to Fairline Crescent in Pettah.
From today you will only conclude the current assignments, you arecarrying out and thereafter report to me from this office for furtherinstructions'.’’
On 12th August the appellant was informed by Lovell to report toFaleel or Sarath at Jetro Textile Mills (Pvt.) Ltd. (hereinafter referredto as Jetro) at Katubedda. The appellant accordingly reported toSarath, the Factory Manager of Jetro, who gave him the note A6stating that he had no specific instructions regarding his problem andrequesting him to report for instructions the following morning bywhich time he would have things clarified. Accordingly on the 13thAugust the appellant reported for instructions. Sarath asked him to-await Faleel’s arrival. Faleel was a Director of Jetro. Faleel did notturn up that day and the appellant left at closing time without doingany work. On the next day (14th August) the appellant again reportedfor instructions and met Faleel who arrived at about 4.45 p.m. Faleelasked him to supervise some carpenters and welders working on the2nd floor but the appellant protested that he could not do that type ofwork. Faleel then requested him to collect a letter that was in the carin regard to his functions. He collected this letter (A7) and left atabout 5 p.m. It read:
August 13, 1985
, To: Mr. Kamil HassanRe-location.
From: The Group Manager
I confirm the note given to you on 12th morning, that you aretransferred with immediate effect to Jetro Textile Mills (Pvt) Ltd.,where you have been asked to report to Mr. Faleel for furtherinstructions regarding your full functions.
It is the Chairman’s wish that you handle matters related to GreyStores, Finished Products, bonding etc. No doubt Mr. Faleel will givemore details including the programme to complete separate facilitiesfor storing and bonding before 30th August.
The vehicle you are now using should be taken with you and allpetrol as well as maintenance expenses should be drawn direct from
Hassan v. Fairline Garments International Ltd. and Others (Atukorale, J.)
Jetro. , Mr. Faleel will lay down standards regarding petrol andmaintenance expenses claimable.
wish you all the best in your new assignment.”
This letter was signed by Lovell with copies to Faleel and another.On 15th August the appellant did not report for work but sent atelegram (A8) to Faleel at Jetro stating that he is unable to report forwork and requesting for leave and that a letter will follow. On the nextday (16th August) he addressed letter (A9) to the Commissioner ofLabour complaining as follows:
Dear Sir,
Violation of ’the Termination of Employment Act byFairline Garments (International) Ltd. of 36,
Kynsey Road, Colombo 8.
1. I was employed as Purchasing Officer of Fairline Garments(International) Ltd., with effect from 14th September 1982 byletter dated 3rd September 1982. (photocopy annexed marked“A”).

By letter dated 7th August 1985 (photocopy annexed marked"B”) I was informed that my purchasing functions had beenstopped.
Thereafter / have been instructed to work under othercompanies and' I have been assigned new .functions which havenothing to do with my contractual duties as Purchasing Officer.My employment as Purchasing Officer with Fairline Garments(International) Ltd. has come to an end.
My prior written consent has not been obtained for this, change ofemployment nor has the ' prior written approval of theCommissioner of Labour been obtained.
Therefore, please be good enough to restore me to my ,employment as Purchasing Officer as per my letter ofAppointment marked “A”.
I annex for your information, marked “C”, a copy of my letterdated 16th August 1985 to Fairline Garments'(International) Ltd.”
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The letter (A 10) sent by the appellant to the Company referred to inthe last paragraph as well as in the telegram is as follows:
I refer to my telegram dated 15th August 1985.
I have brought to the notice of the Commissioner of Labour thecontents of your letter dated 7th August 1985, and the subsequentevents, and I have requested him to inquire into the matter andrestore me to my employment as Purchasing Officer in terms of yourletter of appointment dated 3rd September 1982.
I am anxious to resume my employment under you as PurchasingOfficer in terms of the said Letter of Appointment. Please be goodenough to advise me when you are prepared to re-instate me.
I am copying this letter to the Commissioner of Labour for hisinformation and necessary action.”
The following correspondence, then ensued between the Companyand the appellant. By its letter dated 19th August, the Company sentthe following reply to the appellant:
"Dear Sir,
Reference is made to your letter dated 16th August 1985. Firstly, youhave failed to comply with the contents of the memo dated 13thAugust wherein you were required, to take up an urgent and importantassignment at one of our Subsidiary Companies, but you have so tarfailed to respond at least by your attendance. Your attitude andaction as an executive is most disappointing. Ample opportunity wasalso given you to discuss your feelings with either the Directors or theundersigned but you have chosen to disregard reasonable meansand resorted to an intransigent approach.
I am therefore requesting you to report once again to your newposting and commence your new assignments which are of extremeimportance to the Company, which includes purchasing to aconsiderable extent."
It was signed by Lovell, Group General Manager and copied to Faleelof Jetro. It was produced marked A 22. The appellant then sent thefollowing reply (A 23) dated 22nd August to the Company:
"Dear Sirs,
I do not accept the correctness of what is set out in your letter dated
Hassan v. Fairline Garments International Ltd. and Others (Atukorale, J.)
19th August 1985.
Please advise me by return whether your memorandum dated 7thAugust 1985 which states that I “will no longer be required to attendto purchasing mainly because this function is being delegated toFairline Crescent in Pettah" and subsequent letters assigning me to,other employments and duties are cancelled, and whether you are prepared to reinstate me as Purchasing Officer of Fairline Garments(International) Ltd.
This letter is written without prejudice to my complaint to theCommissioner of Labour."
The Company also despatched the following letter (A20) dated 23rdAugust to the appellant, which the appellant maintained had beenpre-dated:
"Dear Sir,
With reference to the letter dated 19th August 1985, it is noted withregret that you are still refusing to comply with the simple instructionswhich originated from the Chairman himself. Your failure to report towork since 14th August ‘85 leaves us no option but to issue you thisletter of severe caution and placing a deadline for you to report to Mr.A.C.M. Faleel, the Director of Jetro Textiles Pvt. Ltd., where you wereassigned work on 12th August ‘85. Should you fail again to resumeworl< within 7 (seven) days hereof, we will consider you as havingvacated your post and take action accordingly.
In the meantime, we must ask you to immediately return theCompany vehicle you are issued as in any event you are not carryingout any business activities and keeping the vehicle in yourpossession is totally unwarranted ….’’
To this the appellant sent to the Company the following reply (A27)dated 29th August:
"Dear Sirs,
I write with reference to your letter dated 23rd August 1985 ….
I regret to state that you have failed to acknowledge or give a straightforward reply to:-
(1) My letter dated 16th August 1985 where I have requested you tore-instate me immediately as Purchasing Officer in terms of myLetter of Appointment.
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My letter dated 22nd August 1985 where I reiterated my request.
Please be good enough to confirm unequivocally whether you willrestore me to my employment as Purchasing Officer of FairlineGarments (International) Ltd., and whether your letter dated 7thAugust 1985 is withdrawn.
Although it would appear from your letters that you are attempting toforce me to abandon my contractual employment as PurchasingOfficer of Fairline Garments (International) Ltd., I refuse to abandonor vacate my said employment, and I hold you to the terms set outin my letter of appointment dated 3rd September 1982.
If you are not prepared to reinstate me to my position as PurchasingOfficer of Fairline Garments (International) Ltd., I have no objection toyour sending your driver or other representative duly authorised totake possession of the vehicle after issuing me a proper receipt.
I am copying this letter to the Commissioner of Labour for necessaryaction.”
Finally on 6.11.1985 the Company sent the following letter (A26) tothe appellant:
"Dear Sir,
Further to the letter dated 23rd August 1985 sent to you by ourGroup General Manager under registered cover, we write to informthat you, by your conduct, have vacated your post with effect from7th August 1985.
We will, however, deposit your earned wages from 1st August 1985to 7th August 1985 with the Commissioner of Labour, today."
On 30th August the Company took over the vehicle which was inthe appellant’s possession – vide A21. This substantially is thedocumentary evidence in the case. The oral evidence, whichcomprised of that of the appellant and Lovell (the General Manager),established, inter alia, that in compliance with the instructions given inA5 of 7th August the appellant attended to his current assignmentsrelating to purchasing work of the Company on Wednesday the 7th,Thursday the 8th and Friday the 9th of August, on which day heconcluded the same. Saturday the 10th and Sunday the 11th werenot working days. On Monday the 12th, the first day after theconclusion of his current purchasing assignments, he reported to theoffice address of the Company at No. 36, Kynsey Road, Colombo 8.
Hassan v. Fairline Garments International Ltd. and Others (Atukorate, J.)
Lovell had left a note to him requesting him to report to Sarath orFaleel at Jetro, which, as set out by me already, he did on the sameday. The appellant acknowledged the payment to him by theCompany of his wages up to 14th August, 1985.
The Commissioner of Labour made order directing the Company toreinstate the appellant in the post of Purchasing Officer with effectfrom 8.9.1987 and to pay him a sum of Rs. 139,437.50 cts. as backwages for the period of his non-employment. The Commissioner didnot set out any reasons in his order. In quashing this order the Courtof Appeal took the view that neither the re-location of the appellant’splace of work nor the assignment to him by the Company of newfunctions, both being permissible in terms of the contract ofemployment, amounted to a termination of the appellant’s services. Inregard to the first of these two matters the Court of Appeal held thatthere was considerable authority for the proposition that the employerenjoys an implied right, in the absence of contractual provisions orother rules to the contrary, to transfer a workman from oneestablishment to another at a different place within the service of theemployer. Reliance for this proposition was placed mainly on thedecision in Ceylon Estates Staffs' Union v. The Superintendent,Meddecombra Estate (1). In that case the workman who was thesenior (and the acting head) factory officer of the northern division ofMeddecombra Estate was transferred by the management to itssouthern division as the senior assistant factory officer on the sameterms and conditions as those attached to his post in the northerndivision. The workman repeatedly refused to accept this transfer tothe southern factory. Weeramantry J., in the course of his judgment,stated that the employer’s right to transfer his staff within his servicewas too well established to need elaboration and had received firmrecognition in Ceylon, India and under the English Common Law. Hecited several decisions from all three jurisdictions to support this legalposition. But, as rightly pointed out by learned Queen’s Counsel, thedecisions referred to by Weeramantry, J. in his judgment relate toinstances where the workman had been transferred from one divisionof an estate or from one department of a company or from oneestablishment of a business concern to another division, departmentor establishment at a different place within the service of the sameemployer or management. In fact learned Queen’s Counsel did notdispute the appellant’s liability to be transferred to another branch or
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department of the Company, although he maintained that even so itshould be in the same capacity, namely that of a Purchasing Officer.It was, therefore, his contention that the decision in The CeylonEstates Staffs’ Union v. the Superintendent, Meddecombra Estate(supra) which the Court of Appeal purported to follow had noapplication to the facts and circumstances of this case, the reasonbeing that here the appellant, the workman, was transferred by theCompany, his employer, to another place of work not within butoutside its own service and in the service of another and altogetherdifferent company, namely, Jetro.
Upon a careful consideration of this submission of learned Queen'sCounsel I am inclined to uphold the same. It seems to me that theCourt of Appeal was in error when it held that the legal principlereferred to and adopted by Weeramantry, J.in the aforesaid case hadapplication to the facts of this case. The contents of A5 and A7 readby themselves and in the light of the subsequent letters A22 and A20make it abundantly clear that the Company directed the appellant towork at another company. A5 of 7th August informs the appellant thathe will no longer be required to do purchasing work for the Companyand that he should conclude his current purchasing assignments. A7of 13th August transfers him with immediate effect to Jetro. Thesetwo documents by themselves show that, in so far as the Company..was concerned, the appellant’s duties and functions at the Companyhad ceased and that he was directed to commence work at Jetro.This position is fortified by the fact that a new subsidiary company(Fairline Crescent) was floated to attend to the Company'spurchasing work. It is also confirmed by the contents of both A22, inwhich the Company insisted that the appellant should take up anassignment at one of its subsidiary companies (Jetro) to which newposting' he was again requested to report to commence his newassignment’, as well as A20 in which the Company regretted that theappellant had still failed to report for work at Jetro. Admittedly Jetro,being itself a limited liability company, is a legal entity quite distinctand different from the Company even though it was one of itssubsidiaries. Employment in or under the Company is notemployment in or under Jetro. Learned President s Counselreiterated before us that the so-called transfer constituted nothingmore than a re-location of .the appellant's place of work from theCompany’s head office at Kynsey Road to its bonded store atKatubedda, which is a transfer within the service of the Company. No
Hassan v. Fairline Garments International Ltd. and Others (Atukorale, J.)
doubt Lovell in his oral evidence did endeavour to show that it wasso. He went even further and tried to maintain that the Storesassignment, though envisaging a variation of the appellant’s formerfunctions, did not entail new functions totally alien to them. But, in myview, no weight can be attached to his oral testimony in view of theexplicit and unequivocal language in which the letters A5, A7, A22and A20 are couched. Their contents can admit of no otherconstruction than that the appellant was required- by the Company toreport to and commence work at Jetro in a new assignment and hotat the Company’s store at Katubedda. In A7 Lovell himself states thatthe appellant is transferred with immediate 'effect to Jetro TextilesMills Ltd., where the appellant, according to A20, was assigned workNothing mdre is necessary to discredit Lovell’s oral evidence on thispoint.
I shall now refer to the contract of employment. A1, the letter ofappointment, shows that the appellant’s contract of employment waswith the Company. He was recruited and employed by the Company.He in turn agreed to serve the Company. He undertook and wasobliged to work for the Company, for which he was paid by theCompany. His hours of work and the power of control over his workwere laid down and exercised by the Company. But there is nothingin the contract which would enable or empower the Company totransfer, unilaterally, the right to or the benefit of his services toanother legal person or entity. The Court of Appeal seems to haveplaced some reliance on clauses 4 of A1 to justify the transfer of theappellant. This clause, no doubt, expressly provided that theappellant should carry out all duties entrusted to him by theCompany. But there is no agreement (expressed or implied) that heshould obey orders or carry out duties of another company. Aworkman has an inalienable right to choose for himself the employerhe will serve. Once the contractual relationship between himself andhis employer is established, the employer cannot transfer his servicesto another without his consent or against his will. In thiq?connectionthe following observations of the House of Lords in Nokes v.Doncaster Amalgamated Collieries Ltd. (2) are of relevance:
“It is, of course, indisputable that (apart from statutory provisionto the contrary) the benefit of a contract entered into by A torender personal service to X cannot be transferred by X to Ywithout A’s consent, which is the same thing as saying that, inorder to produce the desired result, the old contract between A
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and X would have to be terminated by notice or by mutualconsent and a new contract of service entered into byagreement between A and V."
Learned Queen’s Counsel relied very strongly on the decision inKundan Sugar Mills v. Ziyauddin and others (3) which he submittedwas conclusive of the issue before us. In that case the workmenwere employed by the appellant-Mills at a sugar mill at Amroha in theyear 1946. In 1951 the partners of the appellant-Mills purchasedanother sugar mill at a different place (Kiccha). They closed the lattermill and started it at another place, Bulandshahr. In 1955 the GeneralManager of the appellant-Mills ordered the transfer of the workmen tothe new mills 'at Bulandshahr. The workmen refused to obey thetransfer order in consequence of which the General managerdismissed them. It was not disputed that the partners of the sugarmills at Amroha owned also the sugar mills at Bulandshahr; that theybecame the owners of the former mills in 1946 and of the latter millsin 1951 which was later in or about 1955 started at Bulandshahr; thatthough the same partners owned both mills they were two differentconcerns or entities, and that there was no express term in thecontract of service between the employer-appellant and the workmenthat the latter should serve in any future concerns which the appellantmight acquire or start. It was submitted on behalf of the appellant thatthe right to transfer an employee by an employer from one of hisconcerns to another is implicit in 'every contract of service. SubbaRao J. in dealing with this submission said:
“The argument of the learned counsel for the appellant that theright to transfer is implicit in every contract of service is too widethe mark. Apart from any statutory provision, the rights of anemployer and an employee are governed by the terms ofcontracts between them or by the terms necessarily impliedtherefrom. It is conceded that there is no express agreementbetween the appellant and the respondents (workmen)whereunder the appellant has the right to transfer therespondents to any of its concerns in any place and therespondents the duty to join the concerns to which they may betransferred. If so, can it be said that such a term has to benecessarily implied between the parties? When the respondents1 to 4 were employed by the appellant, the latter was runningonly one factory at Amroha. There is nothing on record to
Hassan v. Fairline Garments International Ltd. and Others (Atukorale, J.)
indicate that at that time it was intended to purchase factories atother places or to extend its activities in the same line atdifferent places. It is also not suggested that even if theappellant had had such an intention, the respondents 1 to 4 hadknowledge of the same. Under such circumstances withoutmore, it would not be right to imply any such term between thecontracting parties when the idea of starting new factories atdifferent places was not in contemplation. Ordinarily theemployees would have agreed only to serve in the factory thenin existence and the employer would have employed them onlyin respect of that factory. The matter does not stop there. In theinstant case, as we have indicated, the two factories are distinctentities, situated ,at different places and, to import a termconferring a right on the employer to transfer respondents 1 to4 to a different concern is really, to make a new contractbetween them.”
In the instant case, however, there is no material to establish theprecise date of incorporation of Jetro – whether it was before or afterthe appointment of the appellant as the Purchasing Officer of theCompany. As such I do not think it can be said that the Indiandecision is conclusive of the issue before us. But in the light of thefacts and circumstances of the instant case the decision does lendsupport for the proposition contended for by learned Queen’sCounsel.
In regard to the second matter referred to by me above, namely,the finding of the Court of Appeal that the contract of employmentpermitted the assignment of new functions to the appellant by theCompany, I am of the view that this finding too is erroneous. TheCourt of Appeal based its finding on clause 4 of the letter ofappointment A1 which has already been referred to by me. A1,however, is titled ‘Appointment as Purchasing Officer’. It appoints theappellant to the post of purchasing officer of the Company. Inpursuance thereof the appellant functioned as the? Company’spurchasing officer from the date of his appointment until the presentdispute arose about 3 years later. He protested on the very first datethat he was called upon to do work other tnan that of purchasing. Itis thus reasonable to infer that the appellant’s appointment was to aspecific post, namely, that of Purchasing Officer, which doubtlesswould have required skill and experience of some sort. Clause 4must in the context be construed to mean duties within the ambit of
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a purchasing officer. It cannot possibly be taken to embrace everykind of duty which the Company may decide to assign to him.
Learned President's Counsel submitted that even if the appellanthad been transferred to and asked to work at Jetro, it did not in lawamount to a termination of his services by the Company. In short hissubmission was that our Termination of Employment of Workmen(Special Provisions) Act, No. 45 of 1971, (unlike the English law) wasintended to protect the employment relationship and not the contractof employment. He contended that, historically and otherwise, theprimary objective of our Act was to ensure that a workman is notthrown to the wolves, as it were, by being deprived of the means ofhis livelihood. He urged that in the instant case there was no radicalor fundamental change in the functions of the appellant who wasguaranteed continued employment at Jetro upon the same terms andconditions as he enjoyed under the Company. As such he maintainedthere was no termination within the provisions of the Act. I am unableto agree with this contention of learned President's Counsel. Such aconstruction would enable the employer to decide for himself thenature of the employment that a workman should do. The wholepurpose of the Act is to ensure that the workman continues inemployment in the same capacity in which he was employed by hisemployer. S. 6. of the Act makes this very clear. The interpretationsought to be placed by learned President's Counsel would rendernugatory the salutary protection granted to workmen under the Act.
For the above reasons the appeal is allowed, the judgment of theCourt of Appeal is set aside and the order of the Commissioner ofLabour is restored. The 1st respondent Company is directed toreinstate the appellant in the post of its Purchasing Officer on orbefore 22nd September 1989 with all back wages from the date ofhis non-employment to the date of his reinstatement. All such backwages including all benefits which the appellant would have beenentitled to will be paid by the Company on or before 22nd September1989. The appellant will also be entitled to costs fixed at Rs.1500/-.
A.G DE SILVA, J. – I agree.
Appeal allowed