JAYASURIYA V. SRI LANKA STATE PLANTATIONS CORPORATION

064-SLLR-SLLR-1995-2-JAYASURIYA-V.-SRI-LANKA-STATE-PLANTATIONS-CORPORATION.pdf


sc
Jayasuriya v. Sri Lanka State Plantations Corporation
379
JAYASURIYA
v.
SRI LANKA STATE PLANTATIONS CORPORATION
SUPREME COURT.
DR. AMERASINGHE, J.
DHEERARATNE, J.
WADUGODAPITIYA, J.
S.C. APPEAL NO. 9/89S.C. SPE. LA NO. 215/88C.A. NO. 449/83L.T. NO. 10/4032/32MAY 06, 1991.
Industrial Disputes – Rules of the Supreme Court, Rule 35 – Failure to comply withRule 35 – Industrial Disputes Act No. 43 of 1950 S. 31D – Question of Law -Meaning of “perverse" – Circumstances when compensation rather thanreinstatement will be awarded for wrongful termination – Calculation ofcompensation – Determining the multiplier.
The written submissions of the respondent required to be filed in 30 days by Rule35 of the Rules of the Supreme Court were delayed and the excuse given wasthat the Counsel concerned generally practised in the outstations and hadperiodically fallen ill. The petitioner (Jayasuriya) was a planter and employed bythe Respondent (Sri Lanka State Plantations Corporation) as Superintendent ofBlackwater State Plantation, Ginigathena. Ten charges were framed against himand he was found guilty of charges 1, 2, 3, 4, 5, 6, 7 and 10 and dismissed witheffect from 03 February 1981. On 10 April 1981 petitioner applied to the LabourTribunal for re-instatement with back wages and/or compensation for wrongfuldismissal. The respondent took up the position that petitioner's services wereterminated for gross misconduct and mismanagement and that in any event therespondent had lost confidence in him. Before the Tribunal six of the 10 chargeswere given up from time to time and only four charges were relied on by therespondent: viz double payments, employment of excess labour, replacement oftyres, and questionable conduct (interference with the estate administration) ofhis wife. The President of the Labour Tribunal held that these four charges hadbeen established and that the dismissal was justified as the acts establishedinvolved moral turpitude/(gross misconduct) and mismanagement. In appeal theCourt of Appeal held that the charge in respect of the misuse of labour had notbeen proved but declined to go further and dismissed the appeal and affirmedthe decision of the Tribunal. On appeal to the Supreme Court.
380
Sri Lanka Law Reports
[1995] 2 Sri L.R.
Held:
Respondent's excuse tor delay to file the written submissions in compliancewith Rule 35 of the Rules of the Supreme Court was inexcusable and he could notbe heard.
In the context of the principle that the Court of Appeal will not interfere with a■ decision of a Labour Tribunal unless it is "perverse” it means no more that thecourt may intervene if it is of the view that, having regard to the weight ofevidence in relation to the matters in issue, the Tribunal has turned awayarbitrarily or capriciously from what is true and right and fair in dealing even-handedly with the rights and interests of the workman, employer and, in certaincircumstances, the public. The Tribunal must make an order in equity and goodconscience, acting judicially, based on legal evidence rather than on beliefs thatare fanciful or irrationally imagined notions or whims. Due account must be takenof the evidence in relation to the issues in the matter before the Tribunal.Otherwise, the order of the Tribunal must be set aside as being perverse.
The Industrial Disputes Act No. 43 of 1950 S. 31D states that the order of aLabour Tribunal shall be final and shall not be called in question in any courtexcept on a question of law. While appellate courts will not intervene with purefindings of fact, they will review the findings treating them as a question of law: if itappears that the Tribunal has made a finding wholly unsupported by evidence, orwhich is inconsistent with the evidence and contradictory of it; or where theTribunal has failed to consider material and relevant evidence; or where it hasfailed to decide a material question or misconstrued the question at issue andhad directed its attention to the wrong matters; or where there was an erroneousmisconception amounting to a misdirection; or where it failed to consider materialdocuments or misconstrued them or where the Tribunal has failed to consider theversion of one party or his evidence; or erroneously supposed there was noevidence.
The Supreme Court, in terms of the Constitution, has wide appellate powers withregard to what is meant by a question of law.
Where the Court of Appeal fails to evaluate the recorded evidence but merelyendorses the findings of the Tribunal, the Supreme Court will set aside thedecision not because the Court of Appeal has been unwilling to substitute its ownview of the facts for that of the Tribunal but because it has failed to evaluate theevidence so as to decide whether the Order of the Tribunal was, in theestablished circumstances of the case, just and equitable.
4(a). When the double payments had been made mistakenly and not fraudulentlya finding that there was moral turpitude (gross mismanagement) is not justified.Transgressing Circular instructions was explained by the petitioner. Paymentshad been made only after computation by the Assistant Clerk and verified by the
sc
Jayasuriya v. Sri Lanka State Plantations Corporation
381
Chief Clerk who had assured the petitioner that the Circular instructions had beencomplied with. The loss caused to the Corporation was fully recovered. The Courtof Appeal and the President were in error both with regard to the question atissue, namely whether the Petitioner had caused a loss and the relation of theevidence to that charge.
In regard to the purchase of 11 tyres the charge was not that the purchaseshad caused a loss to the respondent but that petitioner was guilty of makingunjustifiable purchases from improper sources and failure to enter or cause to beentered the fact of the purchases in the stock book of the Plantation. There wasno evidence to justify the conclusion that the petitioner had caused a loss to therespondent by his negligence. The reasons for the excessive wastage whichnecessitated the purchases had been established and clearly showed anabsence of any culpability on his part.
. The evidence did not support the inference that the petitioner's wife interferedwith the management of the plantation. Nor was there satisfactory evidence to linkthe petitioner with the alleged acts of interference. The alleged acts related to thepetitioner’s household and not to the plantation – an important distinction that wasoverlooked.
The order of the President of the Labour Tribunal was perverse and not just andequitable. The Court of Appeal failed to evaluate the evidence on record.
Even where the dismissal is unlawful, reinstatement will not invariably beordered where it is not expedient or where there are unusual features. In suchevent an award of compensation instead of reinstatement will meet the ends ofjustice. Considering the petitioner’s uneasy relationship with the Trade Unions andthe likelihood of industrial strife if he is reinstated and the fact that the employerhad alleged a lack of confidence in the petitioner, compensation rather thanreinstatement would be the appropriate remedy.
In determining compensation what is expected is that after a weighingtogether of the evidence and probabilities in the case, the Tribunal must form anopinion of the nature and extent of the loss, arriving in the end at an amount that asensible person would not regard as mean or extravagant but would ratherconsider to be just and equitable in all the circumstances of the case. There musteventually be an even balance of which the scales of justice are meant to remindus.
.While the expressed loss, in global terms of years of salary may in certain casescoincide with losses reckoned and counted and settled by reference to therelevant heads and principles of determining compensation, it is preferable tohave a computation which is expressly shown to relate to specific heads anditems of loss. It is not satisfactory to simply say that a certain amount is just and
382
Sri Lanka Law Reports
[1995] 2 Sri LR.
equitable. There must be a stated basis for the computation taking the awardbeyond the realm of mere assurance of fairness.
For a just and equitable verdict the reasons must be set out in order to enable theparties to appreciate how just and equitable the verdict is. Where no basis for thecompensation awarded is given, the order is liable to be set aside. The matters tobe considered should be:
There should be at least an approximate computation of immediate loss i.e.loss of wages and benefits from the date of dismissal up to the date of finalOrder or Judgment.
Prospective future loss. This is not continuing damages.
Loss of retirement benefits based as far as possible on a foundation ofsolid facts given to the Tribunal by the facts.
The essential question is the actual financial loss caused by the unfair dismissalbecause compensation is an indemnity for the loss. What should be considered isfinancial loss and not sentimental harm.
The burden is on the employee to adduce sufficient evidence to enable theTribunal to decide the loss.
Once the incurred losses have been computed any wages or benefits paid by theemployer after the termination as well as remuneration from fresh employmentmust be deducted. If the employee had obtained equally beneficial or financiallybetter alternative employment, he should receive no compensation at all for hesuffers no loss.
When the petitioner after his dismissal remains unemployed the manner of hisdismissal is a relevant consideration in considering the petitioner's loss. This issimply because the manner of dismissal may be tied to pecuniary loss. It is not apunishment of the respondent for what he did.
Once the employee’s past earnings and benefits have been ascertained theymust be multiplied by the period from the date of the final Order or Judgment -the multiplier being fixed by answering the question for how many days, weeks,months, or years from the date of the Order or Judgment, as the case may be,could the Tribunal or Court reasonably expect the loss to continue. The usual dateof retirement or extended date of retirement where it is probable could beadopted. The possibility of the balance period being reduced by death, closure ofbusiness, retrenchment, resignation to seek other employment could be takeninto account only on express findings.
sc
Jayasuriya v. Sri Lanka State Plantations Corporation
383
List of Cases Referred to:
Samarawickreme v. Attorney-General [1983] 1 Sri Kantha’s Law Reports 47.
Mylvaganam v. Reckitt & Colman SC 154/87 – SC Minutes of 08.07.1987.
Mendis v. RajapakseSC 49/88-SC Minutes of 03.11.1981.
Kiriwanthe and Wimalawathie v. Navaratne SC Appeal No. 16/90 – SCMinutes of 16.10.1990.
Coomasaru v. Leechman & Co. SC 27/73 – SC Minutes of 26.05.1976.
Caledonan (Ceylon) Tea and Rubber Estates Ltd. V. Hillman (1977) 79(i) NLR421,436, 437, 438.
Somawathie v. Baksons Textile Industries Ltd. (1973) 79(1) NLR 204.
Thevarayan v. Balakrishnan [1984] 1 Sri LR 189.
Nadarajahv. Thilagaratnam (1986) 3 CALR 303.
Ceylon Transport Board v. Gunasinghe (1970) 72 NLR 76.
Colombo Apothecaries Co. Ltd. v. Ceylon Press Workers Union (1972) 75NLR 182.
Ceylon Oil Workers' Union v. Ceylon Petroleum Corporation [1978-9] 2 SriLR 72.
Reckitt & Colman of Ceylon Ltd. v. Peiris [1978-79] 2 Sri LR 229.
United Industrial Local Government & General Workers' Union v.Independent Newspapers Ltd. (1973) 75 NLR 529.
Hayleys Ltd. v. De Silva (1963) 64 NLR 130.
Ceylon Transport Board v. Samastha Lanka Motor Sevaka Samithiya (1964)65 NLR 566.
Virakesari Ltd. V. Fernando (1965) 66 NLR 145.
Carolis Appuhamy v. Punchirala (1963) 64 NLR 44.
Ceylon Workers' Congress v. Superintendent, Kallebokke Estate (1962) 63NLR 536.
Ceylon Steel Corporation v. National Employees’ Union (1969) 76 CLW 64.
Albert v. Vfeera/af/p///a/[1981] 1 Sri LR 110.
Collettes Ltd. v. Bank of Ceylon [1982] 2 Sri LR 514.
Sithamparanathan v. People's Bank [1986] 1 Sri LR 411 (CA) set aside in[1989] 1 Sri LR 124 (SC).
Walker Sons & Co. Ltd. v. Fry (1966) 68 NLR 73,99.
Municipal Council of Colombo v. Munasinghe (1969) 71 NLR 223, 225.
Brooke Bond (Ceylon) Ltd. v. Tea, Rubber, Coconut & General ProduceWorkers' Union (1975) 77 NLR 6,11.
384
Sri Lanka Law Reports
[1995] 2 Sri LR.
Urban Council Panadura v. Cooray (1971) 75 NLR 236, 238.
Ceylon Transport Board v. Thungadasa (1971)73NLR211.
United Industrial Local Government & General Workers Union v.Independent Newspapers Ltd. (1972) 75 NLR 529, 531.
Ceylon Ceramics Corporation v. Weerasinghe SC 24/76 – SC Minutes of 15July 1978.
Ceylon Workers' Congress v. Poonagala Group SC 120/71 – SC Minutes of28 November 1972.
Glaxo Allenburys' (Ceylon) Ltd. v. Fernando SC 250/71 – SC Minutes of 22October 1974.
Ceylon Transport Board v. Wijeratne (1975) 77 NLR 48t, 498-9.
Belgama v. Co-operative Wholesale Establishment SC 64 and 73/71 – SCMinutes of 13 December 1974.
Central Transport Board v. Loku Banda (1986) 2 Colombo Appellate LawReports 339.
The Governing Body of Educational Institutions founded by the ChurchMissionary Society in Ceylon, Ladies College v. Panuthevan Thuraimugam -SC 222/73; SC Minutes of 22 January 1976.
Cyril Anthony v. Ceylon Fisheries Corporation SC 57/8; SC Minutes of6 March 1986.
Abeysundera v. Samel et al SC 113 – 123/67; SC Minutes of 6 December1968.
Brooke Bond (Ceylon) Ltd. v. Tea, Rubber, Coconut and General ProduceWorkers' Union (1975) 77 NLR 6.
Adam's Peak Tea Estates Ltd. v. Duraisamy SC 11/69 – SC Minutes of 26October 1969.
Woolcombers of India Ltd. v. Woolcombers Workers’ Union 1973 Labour &Industrial Cases of India p. 1613.
Nanayakkara v. Hettiarachchi (1971) 74 NLR 185.
Henderson & Co. v. Wijetunga SC 33/73; SC Minutes of 21 March 1975.
Liyanage v. Weeraman SC 235/72; SC Minutes of 31 January 1974.
Nidahas Karmika Saha Velanda Vurthiya Samithiya v. The Continental MotorsLtd. cited in Abeysekera’s Industrial Law Vols 3 and 4 p. 1543.
Raymond v. Ponnusamy SC 57/69; SC Minutes of 10 December 1969.
Silva v. KuruppuSC 182/69; SC Minutes of 14 October 1971.
Associated Newspapers of Ceylon Ltd. v. Jayasinghe [1982] 2 Sri LR 595,600.
Pathinayake v. Karmika Ha Samanya Kamkaru Samithiya (1971) 74 NLR 237.
Sri Lanka Asbestos Products Ltd. v. Tampoe SC 142/73; S.C. Minutes of5 November 1974.
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 385
Associated Newspapers of Ceylon Ltd. v. Mervyn Perera CA 39.1 and 393/79;Court of Appeal Minutes of 25 September 1981.
Adda International Ltd. v. Curcia [1976] 3 All ER 620, 624.
The Manager, Nakiadeniya Group v. Lanka Estate Workers’ Union (1969) 77CLW 52.
Ceylon Tea Plantation Co. Ltd. v. Ceylon Estates Staffs' Union SC 211/72;SC Minutes of 15 May 1974.
APPEAL from judgment of the Court of Appeal.
H. L de Silva PC with P. M. Ramawatte and Janaka Silva for the Petitioner.
A. S. Nicholas with K. K. Suresh Chandra and Miss M. Aluwihare for theRespondent
Cur. adv. vult.
30 May, 1991.
DR. AMERASINGHE, J.
Before he commenced his submissions on the merits of the appealto this Court, learned President’s Counsel for the Appellant pointedout that, since the Respondent’s written submissions were lodged on14 June 1989, although special leave to appeal had been granted on9 February 1989, they were not lodged within the thirty daysspecified by Rule 35 of the Rules of the Supreme Court. TheRespondent was therefore, in terms of Rule 35(b) “not entitled” to beheard.
In Samarawickreme v. Attorney-General(,) and in Mylvaganam v.Reckitt & Colman(2) the appeals were dismissed for failure to complywith Rule 35.
While in Samarawickreme’s case, the Court was of the view thatthe provisions of Rule 35 were “imperative”, in Mylvaganam’s casethe Court dismissed the appeal after considering the fact that therewas no excuse made for the delay. In Mendis v. Rajapakse(3), wherethe question related not to. the failure to lodge submissions in time,but to the failure to give appropriate notice of the lodging of writtensubmissions, the Court considered both these decisions andconcluded that “The Rule contemplates that this Court will proceed to
386
Sri Lanka Law Reports
[1995] 2 Sri L.R.
hear the appeal; all that the Rule does is to disentitle the party indefault from claiming a right to be heard, but preserves theundoubted discretion of this Court to give such a party such hearingas it thinks appropriate."
In Kiriwanthe and Wimalawathie v. Navaratne <4), which wasconcerned with the failure to comply with Rule 46, Fernando, J.considered the decisions in Samarawickreme, Mytvaganam, andMendis. His Lordship also considered the decision in Coomasaru v.Leechman & Co,(5), where the matter for consideration was theinterpretation of Rule 26 of the Appeal Procedure Rules of 1972which stated that only such authorities and legislation (except thosethat came into existence afterwards) cited in the submissions couldbe relied upon at the hearing of the appeal. It was held by themajority, (Tennekoon, C.J., Vythialingam, Sharvananda and ColinThome, JJ., Rajaratnam, J. dissenting), that where an appellant hadfailed to comply with the Rule without excuse, the appeal should bedismissed. It should be dismissed because, the Court, having shutout the appellant for non-compliance with the Rule, would then be leftto “carry out a study of the appellant’s case unaided by adversaryargument by counsel at grave risk of misleading itself in regard toauthorities and legislation which the parties had no opportunity ofdiscussing before the Court."
The line of reasoning in the Coomasaru case, Fernando, J. said,did not appeal to him. His Lordship explained that
“Rule 26 would deprive the Court of the benefit of Counsel’sassistance in regard to authorities not cited in the Appellant’swritten submissions, but the Court would nevertheless have tostudy that aspect of the Appellant’s case to which the omittedauthorities relate, despite the same risk of misdirecting itself inregard to those authorities; Rule 26 would not permit a dismissalof the appeal for non-compliance. It is also difficult to see howthis principle could be applied to cases where it was therespondent who failed to file submissions, and thus deprivedthe Court of the benefit of the assistance in regard to authoritiesin support of his case. In any event, Tennekoon, C.J., does not
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 387
indicate what the position would have been had an excusebeen submitted; would relief have been granted despite Rule26. That decision is distinguishable for two reasons: Rule 26finds no counterpart in the present Rules, and it dealt with acase of continuing non-compliance for over two years withoutexcuse or explanation.”
“The weight of authority that favours the view that while all theseRules must be complied with, the law does not require or permitan automatic dismissal of the application or appeal of the partyin default. The consequence of non-compliance (by reason ofimpossibility or for any other reason) is a matter falling within thediscretion of the Court, to be exercised after considering thenature of the default, as well as the excuse in explanationtherefor, in the context of the object of the particular Rule.”
In the case before us, on 7 June 1989, while filing the writtensubmissions of the Respondent, his Attorney-at-Law explained thatthe delay in lodging them was because the learned Counsel to whoma draft of those submissions were tendered “generally practices inthe outstations and has periodically fallen ill in the last few months."This is not good enough. I am of the view that the Respondent’sfailure to comply with Rule 35 is inexcusable. In the circumstances, Irefuse to hear him. I do so with regret. On the one hand I cannotignore the existence of Rule 35 and agree to hear counsel for therespondent when the failure to comply with the Rule cannot beexcused. On the other hand, the prescribed penalty for defaultdeprives a party of his most elementary right, namely, the right to beheard. It also deprives the court of the very assistance which writtensubmissions were meant to give. Where no authorities or someauthorities are not cited, the Court may, albeit cautiously,nevertheless take due account of them. But when it shuts out thebenefit of counsel’s assistance, it takes on a heavy burden merelybecause Rule 35 imposes it on the Court.
I now proceed to consider the appeal. The Petitioner wasemployed by the Respondent as the Superintendent of BlackwaterState Plantation, Ginigathhena. The following complaints made
388
Sri Lanka Law Reports
[1995] 2 Sri LR.
against him by the Ceylon Estates Staffs’ Union and the CeylonWorker’s Congress, on the basis of a “disciplinary inquiry”, were saidby the Respondent in a letter dated 9 January 1981, to have been“established”:
Attempting to bring about rift and disharmony among theemployees of Blackwater, S. P. leading to a breach ofpeace, during the latter part of 1980.
Misusing or appropriating to yourself Corporation fundsamounting to about Rs. 6,293/83 by utilizing labour inexcess of your entitlement of 4 labourers.
Violating instructions of Circular No. 126 of 3rd January,1980, by paying or causing to be paid a sum of Rs. 1686/26by way of Budgetory Relief Allowances in excess of Rs. 55/-allowed to each individual, worker and thereby causing aloss to the corporation.
Purchasing 11 new tyres purported to be for the officialvehicle allocated to you between August and October,1980, within a period of 3 months, from outside sourceswithout justification and failing to enter or causing them tobe entered in the Stock Book of the Plantation.
Making exaggerated and untruthful representations to theRegional Corporation Office on 1st November, 1980, withregard to the alleged damage to the quarters of Jayasingheand field terraces.
Allowing your wife to interfere in the administration of thePlantation and to provoke members of the staff by insult thatled to strike on the Plantation in November, 1980.
Acting maliciously against the employees of the Plantationand mismanaging the affairs of the Plantation.”
In view of this, the Petitioner was asked to show cause why he shouldnot be dismissed. In his letter dated 20 January 1981 (R10), the
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 389
Petitioner stated that there was in fact no proper disciplinary inquiryagainst him, since he had not been charged with any misconduct,the Trade Unions could not frame charges against him, he was givenno opportunity of meeting the charges, and because the inquirer wasprejudiced. The Petitioner, in his closely spaced letter of sevenpages, (R10), suggested reasons for the allegations made againsthim and explained each of the alleged acts of misconduct referred toby the Respondent.
On 3rd February 1981, the Respondent informed the Petitioner that“with reference to the preliminary inquiry” held against him and the"explanations” contained in his letter of 20 January, he was“interdicted with immediate effect” without remuneration. A “chargesheet” dated 2 February 1981 was annexed to the letter ofinterdiction on the ground that the Petitioner's explanations were “notsatisfactory”. The seven charges set out above were repeated in this“charge sheet”. Three additional charges were added during thecourse of the inquiry.
On 29 December 1981 the Respondent informed the Petitionerthat he had been found guilty of charges 1, 2, 3, 4, 5, 6, 7, and 10and that he was dismissed “with effect from the date of interdiction,i.e. 3rd February 1981.”
When the Planters Society, to which the Petitioner belonged,requested a copy of the inquiring officer's report, it was informed thatthe document was "privileged”; and since the Respondent’s defencein the event the Petitioner filed an action in the Labour Tribunal wouldbe based on that report, the request was refused.
The Petitioner on 19 April 1982 applied to the Labour Tribunal forrelief by way of reinstatement with back wages and/or compensationfor wrongful dismissal. In its answer, the Respondent took up theposition that the Petitioner’s services were terminated for “grossmisconduct and mismanagement" and that “in any event theRespondent has lost confidence” in him.
Six of the ten charges had been given up by the Respondent, fromtime to time, as and when it realized that there was nothing theCorporation possessed either by way of a reasonable ground forbelief in the guilt of the Petitioner or of anything which it saw tendedto prove those six charges.
390
Sri Lanka Law Reports
[1995] 2 Sri LR.
In the proceedings before the Tribunal, the RespondentCorporation relied upon four grounds, namely, those contained incharges 2, 3, 4 and 6 above. On 20 May, 1983. The President of theTribunal of Hatton delivered his Order. He found that “doublepayments” were made on account of the “misconduct” of thePetitioner and that, therefore, the charge (No. 3 above), had beenestablished. He also found that charges 2, 4 and 6 relatingrespectively to the matter of the employment of excess labour, thereplacement of tyres and the questionable conduct of his wife, hadalso been established. The President of the Labour Tribunalconcluded that “in examining all the facts, and taking intoconsideration the position and responsibilities held b.y the“Petitioner”, his experience, the acts involving moral turpitude/(grossmisconduct) and mismanagement, I have to hold that his dismissalfrom service is not too severe and therefore dismiss the application."
The Petitioner’s appeal to the Court of Appeal was argued on 22June and 18 July 1988 and decided on 7 November 1988. On thebasis that there was no evidence to support such a finding, the Courtof Appeal held that the charge with regard to the alleged misuse oflabour had not been proved. The Court of Appeal however, declinedto go further. It dismissed the appeal and affirmed the decision of theTribunal. The Court said:
“This being an appeal from an order made by a LabourTribunal, an appeal lies to this Court only on a question of law,and an applicant who seeks to have a determination of fact, bya Labour Tribunal set aside must satisfy this Court that therewas no legal evidence to support the conclusion of factsreached by the Labour Tribunal or that the finding was notrationally possible and is perverse even with regard to theevidence on record, (Vide Caledonan (Ceylon) Tea and RubberEstates Ltd. v. Hillman<G).
In the instant case, I am unable to contribute to the view that thefindings of the learned President are capricious or unreasonablein respect of the allegations (2), (3), and (4). The legislaturedesigned the Labour Tribunal as the proper Tribunal todetermine the facts, and this Court cannot seek to substitute itsown view of the facts for that of the Tribunal even though it mayon a review of the evidence be inclined to accept counsel’scriticism of the findings.
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 391
The learned President has in this case, held that having regardto the totality of the evidence adduced, the termination of theappellant's service by the Respondent was justified, I amunable to state that there was no legal evidence in this case tosupport this conclusion reached by the learned President orthat his finding was not rationally possible, and is perverse withregard to the evidence on record. I would accordingly dismissthe appeal without costs.”
The Industrial Disputes Act No. 43 of 1950 states in section 31D thatthe order of a Labour Tribunal shall be final and shall not be called inquestion in any Court except on a question of law. While appellatecourts will not intervene with pure findings of fact e.g. seeSomawathie v. Baksons Textile Industries Ltd.<7); Caledonan (Ceylon)Tea and Rubber Estates Ltd. v. Hillman (6); Thevarayan v.Balakrishnan <8); Nadarajah v. Thilagaratnam (9>; yet if it appears thatthe Tribunal has made a finding wholly unsupported by evidenceCeylon Transport Board v. Gunasinghe (10); Colombo ApothecariesCo. Ltd. v. Ceylon Press Workers’ Union Ceylon Oil Workers’Union v. Ceylon Petroleum Corporation °2), or which is inconsistentwith the evidence and contradictory of it Reckitt & Colman of CeylonLtd. v. Peiris (13 or where the Tribunal has failed to consider materialand relevant evidence United Industrial Local Government & GeneralWorkers' Union v. Independent Newspapers Ltd. (,4), or where it hasfailed to decide a material question Hayleys Ltd. v. De Silva 051 ormisconstrued the question at issue and has directed its attention tothe wrong matters Colombo Apothecaries Co. Ltd. v. Ceylon PressWorkers’ Union (supra), or where there was an erroneousmisconception amounting to a misdirection Ceylon Transport Board v.Samastha Lanka Motor Sevaka Samithiya (16), or where it failed toconsider material documents or misconstrued them (Virakesari Ltd. v.Fernando(17)) or where the Tribunal has failed to consider the versionof one party or his evidence Carolis Appuhamy v. Punchirala (18>;Ceylon Workers' Congress v. Superintendent, Kallebokke Estate (,9)orerroneously supposed there was no evidence Ceylon SteelCorporation v. National Employees' Union (20) the finding of theTribunal is subject to review by the Court of Appeal. In any event, onfurther appeal to the Supreme Court, this court, in terms of theConstitution, has wide appellate powers with regard to what is meantby a question of law See Albert v. Veeraiatipillai(21); Collettes Ltd. v.Bank of Ceylon (22). And where the Court of Appeal fails to evaluate
392
Sri Lanka Law Reports
[1995] 2 Sri LR.
the recorded evidence but merely endorses the findings of theTribunal, as it has done in this case, the Supreme Court would, as ithas done before e.g. Sithamparanathan v. People's Bank,23) set asidethe decision of the Court of Appeal. The decision will be set aside notbecause the Court of Appeal has been unwilling “to substitute its ownview of the facts for that of the Tribunal”, but because it has failed toevaluate the evidence so as to decide whether the Order of theTribunal was, in the established circumstances of the case, just andequitable.
Admittedly a Labour Tribunal, in being required by section 31C ofthe Industrial Disputes Act to make “such order as may appear to thetribunal to be just and equitable”, has a very wide power. It may bethat the Tribunal is not required to give a verdict with regard to thecharges made by an employer, Per Rajaratnam, J. in Somawathie v.Baksons Textile Industries Ltd. (7). Yet Labour Tribunals d( notpossess an unfettered power. As H. N. G. Fernando, J. (as he thenwas) observed in Walker Sons & Co. Ltd. v. Fry <24), a Labour Tribunaldoes not have the "freedom of the wild ass”. (Cf. Municipal Councilof Colombo v. Munasinghe(25>“freedom of a wild horse” per H. N. G.Fernando, J. in relation to an arbitrator). Considerations of justice andequity must necessarily control and limit the powers of LabourTribunals. (Brooke Bond (Ceylon) Ltd. v. Tea, Rubber, Coconut &General Produce Workers’ Union (26)). The Order of a Tribunal mustnot, as the Court of Appeal says, be perverse. “Perverse” is anunfortunate term, for one may suppose obstinacy in what is wrong,and one thinks of Milton and how Satan in the Serpent had corruptedEve, and of diversions to improper use, and even of subversion andruinously turning things upside down, and, generally, of wickedness.Yet, in my view, in the context of the principle that the Court of Appealwill not interfere with a decision of a Labour Tribunal unless it is“perverse", it means no more than that the court may intervene if it isof the view that, having regard to the weight of evidence in relation tothe matters in issue, the tribunal has turned away arbitrarily'orcapriciously from what is true and right and fair in dealing even-handedly with the rights and interests of the workman, employer and,in certain circumstances, the public. The Tribunal must make anorder in equity and good conscience, acting judicially, based onlegal evidence rather than on beliefs that are fanciful or irrationallyimagined notions or whims. Due account must be taken of theevidence in relation to the issues in the matter before the Tribunal.Otherwise, the order of the Tribunal must be set aside as beingperverse.
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 393
Notwithstanding the Judgment of the Court of Appeal to thecontrary, the Petitioner, it seems much to the annoyance of some,insisted that the Order of the Tribunal was perverse and on 9February 1989 he was granted special leave to appeal to this Court. Ido not think the Petitioner was guilty of pertinacity: I think, rather, thathis obstinacy and stubbornness, was righteous.
The residual part of the Respondent’s case has three charges.There is the charge that the Petitioner, had acted in violation ofCircular instructions in authorizing the payment of Budgetary ReliefAllowances and thereby caused a loss to the Corporation. This, thePresident of the Tribunal erroneously surmised, was an allegation thatthe Petitioner had acted “fraudulently.” He misconstrued theqi Sstion at issue. It was never the Respondent's case, and there wasnot a word of evidence to even hint at the suggestion, that thePetitioner was guilty of any form of deception or deceit or that heacted in violation of the Circular instructions to obtain any unjustadvantage or to injure the Respondent by causing loss. ThePresident of the Tribunal, found that any sums of money paid to theworkers, had, according to his understanding of the evidence, beenpaid mistakenly and not fraudulently. He says: "It is proved from theevidence that the double payments had been made as a result of theapplicant’s mistakes." But having found that the charge of acting inviolation of the Circular had been established, the President of theTribunal concludes that there were “acts involving moralturpitude/(gross mismanagement) and mismanagement" for whichdismissal was “not too severe” a punishment. The Petitioner mayhave transgressed Circular instructions and, therefore, in that sensehave been mistaken. But that is quite obviously different from findingthat the Petitioner was guilty of fraud and misconduct involving“moral turpitude” for which he deserved to be dismissed. And as forwhat the Court of Appeal described as a “lapse", it might beobserved that in his letter to the Respondent dated 20 January 1981,(R10) the Petitioner explains that he certified the payments only afterthe payments computed by the Assistant Clerk had been verified bythe Chief Clerk who had also assured the Petitioner that the Circularinstructions had been complied with.
394
Sri Lanka Law Reports
[1995] 2 Sri L.R.
The President, it seems to me, completely misunderstood thenature of the charge. He misconstrued the question at issue andmisdirected himself and then went on to arrive at conclusions withregard to his wrongly assumed charge which had no relationwhatever to the evidence before him. This is a matter of law in whichthis Court might, and ought, to intervene. Cf. Colombo ApothecariesCo. Ltd. v. Ceylon Press Workers Union {Supra), Urban CouncilPanadura v. Cooray{27).
The gravamen of the Respondent’s charge was that loss had beencaused to the Corporation by the Petitioner’s failure to comply withthe instructions, given in the circular. The Petitioner in his letter dated20 January 1981 to the Respondent (R10) explained that a sum ofRs. 1223.65 out of the total excessive payment of Rs. 1686.26 hadalready been recovered and that he would “recover the balanceshortly." The whole sum paid as a result of the Petitioner’s allegedglide into error, greased by the activities of his subordinates, hadbeen recovered from the workers. And so, there was no loss. ThePresident in his Order states as follows:
“Further the evidence indicates that these overpayments hadbeen recovered from the workers and refunded to theCorporation. However, I have to hold that double paymentswere made due to the applicant’s misconduct.”
The Court of Appeal was of the view that, because the overpaymentswere caused as a result of the introduction by the Petitioner of a CashWorks Register in addition to the Checkroll, and because thePetitioner had certified the payments, it was unable “in this state ofthe evidence” to hold that the President was in error when he heldthat this charge had been proved. “The fact that the overpaymentshave been recovered does not”, the Court of Appeal held, “mitigatethe lapse” on the part of the Petitioner.
With great respect, I am of the view, for the reasons stated, that theCourt of Appeal as well as the President of the Tribunal were in error
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 395
both with regard to the question at issue, namely whether thePetitioner had caused a loss, and the relation of the evidence to thatcharge.
In connection with the question of loss, it might also be pointed outthat in his letter R10, the Petitioner said he had reduced the losses ofthe plantation by 50%. (In his evidence he said that at the time hetook charge of the Plantation there was a loss of Rs. 832,000 which ina year he had reduced to Rs. 449,000). Edirimanasingham, theInternal Auditor of the Respondent, admitted in his evidence beforethe Tribunal that the Petitioner had reduced the losses of thePlantation by Rs. 350,000. Among the steps he had taken in thisconnection was curtailing Overtime payments by about 75%, ameasure that could hardly have made him popular with the workers,yet one, which the Respondent Corporation, which was complainingof a loss of Rs. 1686.26, might have taken into account in decidingwhether the Petitioner was the sort of person who acted in recklessdisregard of the interests of the Respondent and deserved to bedismissed. The Petitioner, understandably, concludes his letter to theRespondent by expressing the hope that “far from being found faultwith”, he should be “highly commended." I am inclined to agree withhim.
What the Court of Appeal describes as “the more seriousallegation" against the Petitioner was that he had during the periodAugust 1980 to October 1980 purchased eleven tyres “purported tobe for the official vehicle allocated”, "from outside sources, withoutjustification” and failed “to enter or cause them to be entered in theStock Book of the Plantation.” Although the charge, by referring tothe purchase of tyres for the “purported” use of the Petitioner’s officialvehicle suggests that they were not in fact so used, the Presidentfound that "the 11 tyres which were purchased had been fitted to thevehicle and used.” Neither the Tribunal in its Order nor the Court ofAppeal in its Judgment says a word about the allegation ofpurchases from “outside sources without justification.” Nor does theTribunal say anything about an additional ingredient it mistakenlysupposed the charge to have contained, namely, that quotations had
396
Sri Lanka Law Reports
[1995] 2 Sri L.R.
not been called for the purchases. And it is only as almost anafterthought that the Tribunal in its Order mentions the failure to makeentries in the stock book. The Petitioner had explained that thepurchases were made by monthly vouchers and that the Respondentwas aware of the purchases and that the failure to make entries in thestock book was due to the fact that the tyres were purchased fromtime to time for immediate use. The President noted that theCorporation had taken up the position that it had not been informedof the purchases but does not state whether the Petitioner had failedto comply with an obligation and what the effect should be. The Courtof Appeal does not mention at all the failure to enter the purchases inthe stock book.
Both the Tribunal and the Court of Appeal were primarilyconcerned with the purchase of so many tyres within such a shortperiod, to cover a small mileage. This, the Court of Appeal held, wasconduct on the part of the Petitioner that “undoubtedly caused loss tothe Corporation.” Causing loss is a neutral event upon which thePetitioner’s dismissal could not have been justly based: Whetherthere is a culpable loss for which the Petitioner was to blame isanother matter. The Tribunal found that the loss was causednegligently. Both the Tribunal and the Court of Appealmisunderstood the nature of the charge. A charge of causing loss,negligently or otherwise, by the purchase of tyres was one that wasnever made against the Petitioner by the Respondent. The chargewas not that the purchase of the eleven tyres had caused a loss tothe Respondent but that the Petitioner was guilty of two proceduralirregularities, namely, (1) making unjustifiable purchases fromimproper sources and (2) the failure to enter or cause to beentered the fact of the purchases in the stock book of theplantation. Since both the Tribunal and the Court of Appeal weredriven to a point of distraction by the loss caused by the use of asmany as eleven front wheel tyres to run a mere 4003 miles in threemonths, and especially since the Tribunal attributed the loss to thePetitioner’s negligence, an examination of the evidence deserves tobe made.
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 397
The Respondent gave the Petitioner one car and then anotherwhen the first was found to be unsatisfactory. The second car toowas unsatisfactory and, in the same year, a third car, an oldVolkswagen after a major engine repair, was given for his official useon 15 August 1980. The Reports from the Volkswagen Agents make itquite clear that this car too was yet in need of further attention.Among other things, it had serious defects in the front axle andsteering and suspension on account of which there was “heavy tyrewear" in the front. This appears in the report of the VolkswagenAgents dated 19 February 1981. This was not a new discovery ofwhich the Petitioner and Respondent were ignorant.Edirimanasingham, the Respondent’s Internal Auditor, admitted in hisevidence before the Tribunal that the Petitioner had given informationwith regard to the excessive wastage of tyres. On 18 August 1980,when the Volkswagen Agents had reported (A3) “excessive play” inthe front axle and steering and they had advised the dismantling andchecking of the assembly, the Petitioner had communicated this tothe Respondent by his letter dated 19 August 1980 (A1). ThePetitioner was, by the Respondent's letter dated 26 August 1980 (A2),castigated for taking the car to the Agents, when the Petitioner hadbeen advised to test the car himself and then take it to KotiyagalleState Plantation where a “comprehensive job" on the vehicle was saidto have been done. Now that he was aware of the defects, thePetitioner was advised to communicate with the Superintendent ofKotiyagalle State Plantations “by prior appointment ascertainingwhether he is in a position to undertake the rest of the repairsenumerated by “the Petitioner”. On 30 August 1980 the Petitionerwrote to the Respondent explaining why he had taken the car to theAgents in Kandy (R3). He also informed the Respondent that he hadthe car examined by the Colombo agents when he was on leave inColombo on 27 August 1980, “as the tyre wastage (front) was verysevere” and that they had in their Defect Report (A10) confirmed thefindings of the Kandy branch. He enclosed copies of the DefectReports obtained from the Kandy and Colombo branches of theAgents. When the Petitioner communicated with the KotiyagalleSuperintendent by his letter dated 30 August 1980,'the Petitioner wasinformed that he was unable to undertake the repairs. With his letter
398
Sri Lanka Law Reports
[1995] 2 Sri LR.
dated 6 September 1980 (R11) the Petitioner sent the Respondent acopy of the Kotiyagalie Superintendent’s letter and pointed out theneed to effect the repairs to prevent even more major repairs andreferred to the high tyre wastage and the cost of replacing the fronttyres. In his evidence, the Petitioner explained that he had beenasked by the Assistant Manager, the Resident Director and theVisiting Agent of the Respondent to postpone repairs until financialprovision for doing so was made in the following year. Since he wasprecluded from taking the car to the Agents for repairs, as thePetitioner explains in his letter dated 20 January 1981 (R10) to theRespondent, he had “no choice but to continue to use” the vehicle,replacing the tyres when it became necessary to do so.
In his Order, the President of the Tribunal refers to the Petitioner’sexplanation that the wastage was due to a mechanical defect. Healso refers to the fact that the Reports from the Agents, A3 and A10,had been communicated to the Respondent, but finds that thereports did not attribute the wastage to the defects in the steeringand axle. The Court of Appeal agreed with the President of theTribunal that the Defects Reports, A3 and A10, "did not refer to thequestion of tyre wastage at all". With great respect, the Court ofAppeal failed to note that the President ignored the vital evidence ofRanasinghe, the Service Manager of the Volkswagen Agents, whohad issued, A3. Ranasinghe had said in his evidence that thewastage in the tyres was due to the mechanical defects specified inthe report he issued. The Court of Appeal also failed to note that thePresident did not take account of the fact that Petitioner in his lettersto the Respondent had explained the relationship between themechanical defects referred to in A3 and A10 and the tyre wastage.The Petitioner in his evidence called attention to the fact that "timeand again both orally and in writing" he had complained of thesedefects to the Respondent. This was also overlooked by the Court ofAppeal. By failing to take account of the evidence of Ranasingheand the Petitioner and the explanations given by the Petitionerin his letters to the Respondent, the President misconstrued A3and A10 which were documents of vital significance to the matter inissue.
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 399
The President then goes on to discuss the separate question ofwhether the Respondent had been informed of the purchase of thetyres and then refers to the evidence of Ranasinghe, the ServiceManager of the Volkswagen Agents, that a tyre on the Ginigathhenaroad should “if fitted to a Volkswagen in good condition, driven by agood driver should run 7000 miles. The President then draws theinference that, since the Petitioner had used eleven tyres to run 4003miles, there appears to be a disparity”. He then quotes Ranasingheas saying that he advised the Petitioner that unless the defect wasrectified, it would get worse and that he had said that the front axleand steering had to be dismantled for repairs. The President thensays: “It would be seen from this evidence that in spite of beingadvised by this witness the applicant had negligently used the tyres,as a result of which a loss was caused to the Corporation.Furthermore, the applicant has admitted that he has not broughtthese tyres into the stock book.”
I am of the opinion that there was no evidence to justify hisconclusion that the Petitioner had caused a loss to the Respondentby his negligence. The evidence in the case points in the oppositedirection which, however, the President of the Tribunal failed to noticebecause he did not consider the relevant evidence given by ServiceManager Ranasinghe and the Petitioner orally and through thecorrespondence between him and the Respondent and because hemisconstrued the Defects Reports (A3 and A10).
The President of the Tribunal and the Court of Appeal were awarethat the normally expected mileage was subject to the condition thatthe vehicle was in a good condition, but lost sight of the fact thatthere was abundant evidence of the fact that the vehicle assigned tothe Petitioner was in a bad condition and that the excessive wastageof tyres was attributable to its defective state.
After stating that Ranasinghe had observed that a "tyre should doan average mileage of around 7000 miles provided the vehicle was ingood condition,” the Court of Appeal notes that the President had
400
Sri Lanka Law Reports
[1995] 2 Sri LR.
reached the conclusion that the Respondent had not been notified ofthe inordinate frequency with regard to the replacement of the tyres.Edirimanasingham, the Internal Auditor of the Respondent, in hisevidence, while admitting that the Respondent had been informed bythe Petitioner of the excessive wastage, and that the cause of thewastage, namely mechanical defects in the vehicle, had beenpersonally explained to him by the Petitioner, in his re-examinationstated that in the letters in which excessive wastage was complainedof by the Petitioner, no mention had been made that “tyres had beenobtained within a short period."
The Court of Appeal states that “having regard to the evidence ofwitness Edirimanasingham and the version given by the appellant,the Tribunal has held that this conduct on the part of the appellanthas undoubtedly caused loss to the Corporation." The President usesEdirimanasingham's evidence only to establish the fact that thePetitioner’s car had been fitted with eleven tyres to run 4003 milesfrom 15 August to the end of October. As for the Petitioner’sevidence, had it been examined, it would have been seen toadequately explain the reasons for the wastage and clearly show anabsence of any culpability on his part.
There remains the Respondent’s charge that the Petitioner allowedhis wife “to interfere in the administration of the Plantation and toprovoke members of the staff by insult that led to a strike on thePlantation in November 1980." The gravamen of the charge of whichthe Petitioner was found guilty and dismissed by the Respondent wasthat the permitted misconduct of the Petitioner’s wife was of such aserious nature as to cause a strike. The President of the Tribunal didnot find that there was a strike related to the Petitioner’s wife’smisconduct. Having accepted the evidence of three employees ofthe Plantation that in four documents, R6, R7, R8, and R9, thePetitioner’s wife had “called for explanations from them in regard toofficial work,” the President of the Tribunal found that the Petitionerhad "allowed his wife to interfere into the management of the estate.""I have therefore arrived at the conclusion that this amounts tomismanagement”, states the President of the Tribunal. The Court of
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 401
Appeal notes that the President had concluded that the Petitionerhad permitted his wife to interfere in the work of the Plantation, thatthe Petitioner’s wife had failed to give evidence and that the evidenceof Pandian, one of three employees who gave evidence on thismatter, with regard to the authenticity of R6, R7, R8 and R9 had gone“completely unchallenged.”
The authenticity of the documents was earlier disputed by thePetitioner. In this connection it must be observed that section 36(4) ofthe Industrial Disputes Act provides that in the conduct ofproceedings under that Act, a Labour Tribunal shall not be bound byany of the provisions of the Evidence Ordinance. Tribunals are notfettered by the Evidence Ordinance, although they ought not to makeorders ignoring the rules of evidence in the guise of making just andequitable orders. (See per Alles, J. in Ceylon Transport Board v.Thungadasa(28). Pandian's evidence was that he received R7 from thePetitioner's wife. Pandian had nothing to do with R6, R8 and R9. Withregard to R6, Dorairaja, said that it was the only letter he had,received from the Petitioner’s wife and did not answer the questionhow he recognized her handwriting. With regard to R8 and R9,Ramanathan said in his evidence that he received them from thePetitioner’s wife. The President examined the documents and wassatisfied that the handwriting was similar and because the Petitioner’swife was not called as a witness, he accepts the evidence ofDorairaja, Pandian and Ramanathan.
Learned President’s Counsel did not find it necessary todeal with the question of authenticity. He submitted that thedocuments, if they were written by the Petitioner’s wife, did notwarrant a charge of interference in the management of the affairs ofthe plantation. In any event, there was no evidence to show that theinterference complained of was permitted by the Petitioner. With thissubmission, I agree.
402
Sri Lanka Law Reports
[1995] 2 Sri LR.
The first document (R6) was a note addressed to Dorairaja. Itreads as follows:
“Dorairaj, please explain as to why you did not send the paper andthe letter? Are you the new Superintendent? Send the paper andthe letters immediately, without trying to be funny.”
D. Jayasuriya
The Petitioner had explained to the Respondent in his letter of 20thJanuary (R10) that his wife was expecting an item of clothing by postwhich she required to wear on a special occasion. When she hadsent a servant to the plantation’s office (where mail was received) forthe collection of the item, Assistant Clerk Dorairaja had said that ithad not been received. When the Petitioner’s wife was informed bythe Post Office that the item had, in fact been delivered, she sent thisnote to Dorairaja. Whatever one may think of her manner ofexpressing herself and the fact that it may have used Dorairaja to putup his hackles, the inference by the President of the Tribunal thatthere was an interference with the management of the plantation wasaltogether unwarranted. In any event, even if it is assumed that thisamounted to an interference with the management of the plantation,there is no evidence at all to indicate that the Petitioner allowed, asthe President of the Tribunal found, such an interference. Heoverlooks the fact that the .Petitioner had explained to theRespondent in his letter (R10) that when the letter R6 was sent, hewas away at the Respondent’s Board Office; and that, according tothe evidence of Dorairaja, when the Petitioner came to know of thisletter, he had been summoned to the Petitioner’s bungalow and toldby the Petitioner that his wife could not write such letters. The Tribunaland the Court of Appeal overlooked all this vital evidence whichstood in the way of a finding that the alleged interference wasallowed by the Petitioner.
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 403
The second document, R7, is as follows:
5kg Flour 26.00
11/2 kg Sugar 19.80
5 kg Flour 26.00
1 kg Dhall 12.50
16 PktsTea 32.00
1 kg Sugar 13.20
5 kg Flour 26.00
5 Pkts L’Spray 42.50
1 kg Sugar 13.20
211.20
S.K
Please explain as to how you entered 3 kg of sugar in your book,and you sent me only 1 1/2 kgs. which I wanted, through Siripala,Hereafter maintain your book properly and make it a point not toenter others bills onto my account as I too have a book on my own,you are not efficient enough to hold that post, as this is the secondtime you did this sort of thing, so please be careful and cautious(sic.)
D. Jayasuriya
“P.S. Please show this to the Manager when he comes.
D. Jayasuriya
The man to whom this note, R7, was addressed was Pandian, theStorekeeper of the plantation. In his brief stay in the witness box,Pandian said that during his six-year stint at the plantation he hadnever before been called upon to give an explanation to the wife of aSuperintendent, and that this lady had no reason to state that he wasinefficient in his work. In cross-examination Pandian said that he wasthe brother of Dorairaja, and that although two inquiries had beenconducted against the Petitioner, he had no part in them and that R7was now produced for the first time. He said he went on strike, butnever said that it had any thing to do with R7 or with the Petitioner orhis wife. There was not a word out of him to support an allegation ofinterference with the management of the plantation. How does R7 inany way whatsoever support the President’s inference? It does not.
404
Sri Lanka Law Reports
[1995] 2 Sri LR.
Perhaps the Petitioner’s efforts at economy and being watchful overexpenditure had touched his wife also, in relation to the domesticscene. But that is all R7 shows. In any event, there is nothing to showthat the Petitioner ever knew of the existence of R7 until it wasproduced at the Tribunal.
In R8, the Petitioner’s wife said:
K.P.
I hope you are not marking name to Gandhi from the 6th. He haskept away from work in the bungalow and you are not to offer himwork in the field as he was brought from Galle only as anallowance, Periasamy came to work yesterday and you maycontinue giving him name. Doraisamy have been working from 8thand you may continue, Yesu has not being coming for work fromthe 7th up to now. Do not mark name till I send a chit. Give nameto Mary Soma from the 6th in lieu of Gandhi.
D. Jayasuriya
Gandhi was an “allowance” – plantation jargon for a householdservant. He was therefore not to be given ordinary plantation work,such as work in the field. The Petitioner’s wife was keeping thedomestic scene quite distinct from the plantation. K. P. was the HeadKanaka Pulle, Ramanathan. In his evidence he stated that thePetitioner fell out with him in June 1980 because he had refused tocontinue collecting money from workers for the milk supplied by thePetitioner's wife’s private herd of cattle. She had sent him the note R8.The Petitioner’s wife was legitimately concerned about peopleassigned to work in the Petitioner’s residence. Who would haveknown better about Ghandhi not turning up for work in the bungalow?This was not concerned with workers employed in the field or in thefactory and, therefore, the inference that there was an interferencewith the management of the plantation was unwarranted. In anyevent, there is not a single word in the evidence to link the Petitionerwith the communication in question. How then did he allow his wife tointerfere?
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 405
And in R9 the Petitioner’s wife says:
K.P.
Please do not give the name to the boy who came yesterday, as hetoo didn’t follow instructions and I was compelled to send himaway. He is supposed to be one Ramaiya. From today send thename of our cook Ramaiya. Our usual bungalow watcher’s brotherhas to give me Rs. 2.50 for the milk he bought from the 7th-10th.After several reminders he still has failed to pay. So please, get himto pay immediately.
D. Jayasuriya
R9 was produced by the Kanaka Pulle in support of his claim thatthe Petitioner’s wife was giving him instructions with regard to work onthe plantation. As in the case of R8, the instructions related todomestic staff assigned to work in the Petitioner’s household and notin the plantation, on the field or in the factory, an important distinctionwhich the Tribunal overlooked. In any event there was nothing to linkthe Petitioner with this document.
For the reasons explained in my judgment I am of the opinion thatthe order of the President of the Labour Tribunal was perverse andnot just and equitable. With great respect, the learned Judge of theCourt of Appeal, in my opinion, came to a different conclusionbecause his Lordship failed to evaluate the evidence on record. Itherefore set aside the judgment of the Court of Appeal and the Orderof the Labour Tribunal and hold that the termination of theemployment of the Appellant by the Respondent was wrongful.
Although the Petitioner’s dismissal was wrongful and it may beordered that he be reinstated., as Sharvananda, J. (as he then was)observed in Caledonan Estates v. Hillman (Supra) at p. 435, see alsoper Siva Supramaniam, J. in United Industrial Local Government &General Workers’ Union v. Independent Newspapers Ltd.(29) thatremedy is “not absolute or of universal application. There can be
406
Sri Lanka Law Reports
[1995] 2 Sri L.R.
cases where it might not be expedient, because of the presence ofunusual features, to direct reinstatement, and a Tribunal may think thegrant of compensation instead may meet the ends of justice.”Considering the Petitioner's uneasy relationship with the Trade Unionsand the likelihood of industrial strife if he is reinstated cf. CeylonCeramics Corporation v. Weerasinghe(30); cf. also Ceylon Workers'Congress v. Poonagaia Group<31) and the fact that the employerhad alleged a lack of confidence in the Petitioner cf. GlaxoAllenbury's (Ceylon) Ltd. v. Fernando(32>, I am of the view thatcompensation, rather than reinstatement is the appropriate remedy inthis case.
What would be a just and equitable amount by way ofcompensation? Vythialingam, J. pointed out in Ceylon TransportBoard v. Wijeratne{33) that “Although the Industrial Disputes Actprovides for the payment of compensation in lieu of reinstatement itdoes not lay down the basis on which it is to be computed.”Vythialingam, J. said that “the amount not be mechanically calculatedon the basis of the salary he should have earned till hereached the age of super-annuation. “These observations werequoted with approval by Sharvananda, J. (as he then was) inthe Caledonan (Ceylon) Tea and Rubber Estates Ltd. v Hillman(Supra). With these observations, I respectfully agree. Sharvananda, J.added that:
"The Legislature has wisely given untrammelled discretion to theTribunal to decide what is just and equitable in the circumstancesof each case. Of course, this discretion has to be exercisedjudicially. It will not conduce to the proper exercise of thatdiscretion if this Court were to lay down hard and fast rules whichwill fetter the exercise of the discretion, especially when theLegislature has not chosen to prescribe or delimit the area of itsoperation, Flexibility is essential. Circumstances may vary in eachcase and the weight to be attached to any factor depends on thecontext of each case.”
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 407
While I respectfully agree that the amount of compensation shouldnot be “mechanically” calculated and that Labour Tribunals have awide discretion, there is, it seems to me, no power conferred toy theLegislature on Labour Tribunals to act without unhampered restraint.Their power has been, with soundness of judgment, curtailed by thelegislature. They have no “untrammelled” power, in the ordinarysense of the word. The legs of those who feign to enjoy the freedomof the quadruped H.N.G. Fernando, J. referred to, have beenfastened together. Indeed, as Sharvananda, J. himself pointed out inthe Caledonan Estates Case at p. 436, Labour Tribunals have anobligation to act judicially.
“Compensation” is derived from the Latin root compensate, andwhat is expected is that after a weighing together of the evidenceand probabilities in the case, the Tribunal must form an opinion of thenature and extent of the loss, arriving in the end at an amount that asensible person would not regard as mean or extravagant, but wouldrather consider to be just and equitable in all the circumstances ofthe case. There must eventually be an even balance, of which thescales of justice are meant to remind us. The Tribunal mustendeavour to give each man that which is his right: Sum cliquetribuere", as the Roman Law, to which our legal systems owe somuch, felicitously phrased that concept.
Our Tribunals and Courts have often used a given number ofyears’ salary as global compensation. For example, in Belgama v.Co-operative Wholesale Establishment(34), and in Central TransportBoard v Loku Banda(3S), one years’ salary was considered just andequitable. Five years salary was deemed to be just and equitable inThe Governing Body of Educational Institutions founded by theChurch Missionary Society in Ceylon, Ladies' College v. PanuthevanThuraimugam (36>. Seven years’ salary was awarded in Cyril Anthonyv. Ceylon Fisheries Corporation (37), the Supreme Court being of theview that one years’ salary awarded by the Tribunal was grosslyinadequate. Sharvananda, J. in the Caledonan Case {supra) at
408
Sri Lanka Law Reports
[1995] 2 Sri L.R.
p. 438 thought that seven years' salary was a just and equitableaward and reduced the award of ten years’ salary awarded by theTribunal.
With great respect, while, in the circumstances of those decisions,the expressed loss, in global terms of years of salary, may in facthave coincided with losses reckoned and counted and settled byreference to the relevant heads and principles of determiningcompensation, it is preferable, in my view, to have a computationwhich is expressly shown to relate to specific heads and items ofloss. It is not satisfactory in my view to simply say that a certainamount is just and equitable. There ought, I think, to be a statedbasis for the computation, taking the award beyond the realm of mereassurance of fairness. This would enable the parties and anyonereading the Order to see that it is, all in all, just and equitable. InAbeysundera v. Samel(38); cf. also Brooke Bond (Ceylon) Ltd. v. Tea,Rubber, Coconut and General Produce Workers' Union(39) the Courtsaid: “For an order to be just and equitable it is not sufficient for suchorder merely to contain a just and equitable verdict. The reasons forsuch verdict should be set out to enable the parties to appreciatehow just and equitable the order is. In the absence of reasons, itwould not be a just and equitable order.” Indeed, as De Kretser, J.pointed out in Adam's Peak Tea Estates Ltd. v. Duraisamym thefailure to give reasons might lead a party to conclude that the orderwas arbitrary. Giving reasons would also lead the Tribunal to addressits mind to the relevant considerations leading to its award. As theSupreme Court of India observed in Woolcombers of India Ltd. v.Woolcombers Workers' Union (4,,1 the very search for reasons will leadthe tribunal to give reasons which will be regarded as fair and todisregard others. Wade (Administrative Law, 5th Ed. at p. 486)observes that “the giving of reasons is required by the ordinary man’ssense of justice and is also a healthy discipline for all who exercisepower over others. “Where no basis for the compensation awarded isgiven, the Order of the Tribunal is liable to be set aside. (SeeNanayakkara v. Hettiarachchilt2)).
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 409
In any event, it would not be satisfactory to impose arbitraryceilings on the compensation to be awarded, whether by referenceto years of salary or otherwise. In Ceylon Transport Board v.Wijeratnei33 Vythialingam, J. placed a limit of three years salary onthe total amount of compensation to be awarded. There was no basisfor selecting a three year period and, it came without surprise, thatVythialingam, J. was compelled to review his three year limit. InHenderson & Co. v. Wijetunge(43), Vythialingam, J. awarded five yearssalary as compensation. In the Caledonan Estates Case,Sharvanada, J. said (at p 436) that His Lordship was unable tosubscribe to Justice Vythialingam’s proposition that the amount“should seldom, if not never, exceed a maximum of three years’salary”. Sharvananda, J. said that “flexibility is essential” and pointedout that “circumstances may vary in each case and the weight to beattached to any particular factor depends on the context of eachcase.”
I respectfully acjree with those observations. However, there arecertain parameters. There is data which is necessary to determinethe orbit of every Tribunal, so as to prevent it from straying off itscourse. What are the matters to be considered? There ought to be atleast an approximate computation of immediate loss, i.e loss ofwages and benefits from the date of dismissal up to the date of thefinal Order or Judgment, and another with regard to prospective,future loss, and a third with regard the loss of retirement benefits,based as far as possible on a foundation of solid facts given to theTribunal by the parties.
While it is not possible to enumerate all the circumstances thatmay be relevant in every case, it may be stated that the essentialquestion, in the determination of compensation for unfair dismissal, isthis: What is the actual financial loss caused by the unfair dismissal?,for compensation is an “indemnity for the loss”. (Per Soza, J. inAssociated Newspapers of Ceylon Ltd. v. Jayasinghe (48)). Now,losses can be of various kinds; but the matter for consideration in thiskind of case is the financial loss, and not sentimental harm causedby the employer. In his petition to this Court, dated 25, September
410
Sri Lanka Law Reports
[1995] 2 Sri L.R.
1990, the Petitioner refers to the fact that he was “undergoinghardships, both financially and mentally."
I am of the view that privations caused by injured feelings,anguish, unpleasantness, loss of face or inconvenience, do not, inthe absence of evidence that they could be translated into calculablefinancial loss, enter into the computation of compensation in thiscase. They are, in the realm of industrial law, remote. Emotionalsuffering by itself is not compensatable. There is no suggestion in thiscase of mental hardship that could be translated into calculablefinancial loss. Therefore, I do not take the Petitioner’s alleged mentalhardship into account in deciding what compensation ought to beawarded.
With regard to financial loss, there is, first, the loss of earnings fromthe date of dismissal to the determination of the matter before theCourt, that is, the date of the Order of the Tribunal, or, if there is anappeal, to the date of the final determination of the appellate court.The phrase “loss of earnings" for this purpose would be thedismissed employee’s pay (net of tax), allowances, bonuses, thevalue of the use of a car for private purposes, the value of aresidence and domestic servants and all other perquisites andbenefits having a monetary value to which he was entitled. Theburden is on the employee to adduce sufficient evidence to enablethe Tribunal to decide the loss he had incurred. For instance, if anemployee claims that he would have earned more than his basicsalary, he must adduce supporting evidence such as the fact thatthere was a general wage increase from which he would havebenefited, and/or that he was on a regular ladder of promotion alongwhich he would have progressed, and/or that he had specialqualifications or opportunities which would have led to animprovement in his conditions of service during the relevant time.Otherwise, it must be assumed that he would continue to earn at thesame rate as at the time of the termination of his services.
The Petitioner in his evidence stated that he was earning Rs. 1295without allowances. There is no evidence before us of how much he
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 411
was entitled to by way of allowances, bonuses and other payments. Itwas in evidence that he was given the use of a car, a residence anddomestic help. However, there is no evidence with regard to the valueof these benefits. Did he have to pay something, albeit a tokenamount, for these benefits? If so, how much? Was he entitled tounlimited private travel, if not, what was he entitled to? What was thereasonably estimated value of this facility in monetary terms? In theabsence of evidence with regard to losses other than those relatingto his basic salary, I am unable to compute the Petitioner’s lossesunder this head, except those with regard to basic wages. Since thePetitioner has failed to adduce evidence in support of a claim forother benefits, he shall be confined under this head of assessment tothe losses of which he has given evidence, viz., his basic wages. ThePetitioner was dismissed on 3 February 1981. The maximum sum heis entitled to under this head is Rs. 160,580, i.e. his monthly salarymultiplied by the number of months from the date of his termination tothe date of this Order, that is 124 months.
Once the incurred, i.e., the ascertainable past, losses have beencomputed, a Tribunal should deduct any wages or benefits paid bythe employer after termination, as well as remuneration from freshemployment. (See Liyanage v. Weeraman t441:; Ceylon TransportBoard v. Wijeratne (Supra)). If the employee had obtained equallybeneficial or financially better alternative employment, he shouldreceive no compensation at all, for he suffers no loss. (e.g. seeNidahas Karmika Saha Velanda Vurthiya Samithiya v. The ContinentalMotors Ltd.(45) cited in Abeysekera's Industrial Law Vol. Ill & IV at p.1543). And compensation should be reduced by the amount earnedfrom other, less remunerative employment. The principle is this: He isentitled to indemnity and not profit.
According to his Petition to this Court dated 25 September 1990,the Petitioner remained unemployed up to that date. At the hearingbefore us learned President's Counsel stated that the positionremained unchanged. The question then is whether the Petitionerfailed to mitigate his loss because of his own fault. A dismissed
412
Sri Lanka Law Reports
[1995] 2 Sri LR.
employee must mitigate his loss by taking any offer of employmentthat is reasonably offered to him, acting as if he had no hope ofseeking compensation from his previous employer. I hold that thefailure to mitigate the loss was not due to the Petitioner’s fault. It is afact recognized by this Court that persons like the Petitioner, who areengaged in the business of running plantations, find it difficult toobtain alternative employment, (e.g. see Caledonan Estates Ltd. v.Hillman (supra) at p. 437; Raymond v. Ponnusamy <46). The fact that hewas dismissed for certain acts of serious mismanagement andmisconduct and causing disaffection and strife among the workers inthe plantation might well have exacerbated the problem. I am of theview that the manner of dismissal in this case, blackened thePetitioner's name in the plantation sector and rendered him unfit forimmediate re-employment and that the loss caused byunemployment is entirely attributable to the Respondent. The mannerof dismissal is a relevant consideration in considering the Petitioner'sloss. In Silva v. Kuruppu<47) the fact that the employer had made afalse allegation of theft against the employee, thus preventing herfrom obtaining other work of a suitable nature, was taken into accountin awarding compensation. This is simply because the manner ofdismissal may be tied to pecuniary loss. It is not a punishment of theRespondent for what he did. (Cf. Associated Newspapers of CeylonLtd. v. Jayasinghe m. There is no element of exemplary or punitivedamages contained within an order of compensation for unfairdismissal made by a Labour Tribunal.
Since there was no evidence that the Petitioner received anymoney or monetary benefits from the Respondent after his dismissal,and since he remains unemployed through no fault of his own, nodeduction is made from his immediate losses.
„ The Petitioner is also entitled to be compensated for the loss offuture earnings and benefits. This is not “continuing damages” ofthe sort which Sirimane, J., with great respect, correctly refusedto sanction in Pathinayake v. Karmika Ha Samanya KamkaruSamithiya m. Once the employee’s past earnings and benefits have
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 413
been ascertained, they must be multiplied by the period from thedate of the final Order or Judgment. The Tribunal has to fix a“multiplier”: This is fixed by answering the question for how manydays, weeks, months or years, from the date of the Order orJudgment, as the case may be, could the Tribunal or Courtreasonably expect the loss to continue?
This is a very troublesome question, for it involves uncertain,conjectural and, in a sense, imponderable factors. As a result, thereis, lamentably, yet inevitably, a degree of speculation and a lack ofdesirable precision. Nevertheless, in my view, the question must beanswered with stated reasons. I have already explained the need forthis.
The usual date of retirement, and if there be evidence to show thatit was probable that his date of retirement would be extended, thenthat extended date of retirement would, I think, represent the outsidelimit. The date of retirement has been taken in some, decisions to bethe relevant date up to which the computation of future losses havebeen made. (e.g. see Raymond v. Ponnusamy (Supra)-, Sri LankaAsbestos Products Ltd. v. Tampoe (50>; Associated Newspapers ofCeylon Ltd. v. Mervyn Perera (5')). It is a good starting point. However,as Vythialingam, J. pointed in Ceylon Transport Board v. Wijeratne(Supra,) the usual date of retirement ought not to be “mechanically”adopted. Vythialingam, J. was, it seems, unwilling to automatically, inevery case, use a period terminating with the age of expectedretirement because of the risks and vicissitudes of an employee’s life.His Lordship said “He may die. His services may be terminated formisconduct or on account of retrenchment. The business may ceaseto exist or close down.”
While I respectfully agree that consideration should be given to thepossibility that the balance period may be reduced by death, closureof business, retrenchment, resignation to seek other employment andso on, these matters ought not to be merely mentioned and left, as itwere, in the air. It is not sufficient to recite a sort of litany of factors towhich Presidents of Labour Tribunals who are making computationsare supposed to respond. The matters to which they must respond, in
414
Sri Lanka Law Reports
[1995] 2 Sri L.R.
the circumstances relevant to the case before them, ought, for thereasons I have given, be considered and decided upon andexpressed.
To assume for certainty all the disadvantageous possibilities andto take no account of the advantageous, seems hardly fair. Unlessthere are stated reasons supported by evidence to arrive at suchconclusions, I am of the view that they run the risk of being describedas arbitrary, and, therefore, being set aside.
With regard to premature death, for example, why should thenormal expectation of life, officially announced from time to time bythe Government’s statistical department, be ignored, in the absenceof evidence to the contrary in a specific case? There is no evidencein this case that the Petitioner is in such a state of poor health that heis not likely to live up to the date of normal retirement of 55 years,which is well below the national expectation of life. I therefore assumethat he would live up to the age of retirement, but I do not take anyperiod beyond that age into account, for there is no evidence withregard to probable extensions of service.
What were the chances of retrenchment or the business of theRespondent closing down before the Petitioner reached his age ofretirement? If these things were likely to happen, when were theylikely to happen? And if it would be reasonable to assume that theywould happen by a certain date, would the Petitioner have beenentitled then to certain monetary benefits? If so to what amount, forthe figure computed for future loss must take that into account. Thereis no evidence to show that the Respondent’s business was likely toclose down or that the Petitioner would be retrenched beforeretirement: I, therefore, hold that retrenchment and closure should notin this case be used to discount the period for which future earningsshould be computed.
Was it likely that the Petitioner would have resigned to seek otheremployment? This is essentially a question of marketability. I have noevidence of his academic or professional attainments. However, there
SC Jayasuriya v. Sri Lanka State Plantations Corporation (Dr. Amerasinghe, J.) 415
is evidence of his experience. This is in a limited area of activity. Heworked in the Private sector for twelve years and for the StatePlantations Corporation for seven years, managing plantations. Hehas then remained unemployed. Having regard to local conditions,including the labour market, it is unlikely that he will be able to obtainemployment of a similar nature in his particular job market. His namehas now been cleared. But it took ten years, through no fault of hisown, to do so. He is now 45 years old and, in my view it is unlikelythat he will find alternative employment, even outside the plantationsector, having failed to do so when he was younger.
In the circumstances of this case, I hold that the expected age ofretirement. 55 years, should be regarded as indicating the date up towhich prospective loss ought to be calculated. There is evidence thatthe Petitioner is 45 years old, but there is no evidence of his exactdate of birth. The multiplier for the purpose of computing prospectiveloss is, therefore, taken to be 120 months. Under this head, therefore,the Petitioner is entitled to receive Rs. 1295 multiplied by 120, i.e.,Rs. 155,900.
There is no evidence with regard to the loss of retirement benefits,and therefore, no compensation is awarded under that head. As theEmployment Appeal Tribunal observed in Adda International Ltd. v.Curcia <52), "The tribunal must have some thing to bite on and if anapplicant produces nothing for it to bite on, he will have only himself,to blame if he gets no compensation”.
This Court has considered it appropriate for Tribunals to take intoaccount the capacity of the employer to pay compensation, (e.g. seeBelgama v. Co-operative Wholesale Establishments (Supra); CeylonTransport Board v. Wijeratne (supra). This is in keeping with thegeneral obligation that the Tribunal must be fair by all parties,including the employer. (Cf. The Manager Nakiadeniya Group v.Lanka Estate Workers’ Union (S3); Ceylon Tea Plantations Co. Ltd. v.Ceylon Estates Staffs’ Union (54); Somawathie v. Baksons TextileIndustries Ltd. (Supra). There is no evidence in this case that the
416
Sri Lanka Law Reports
[1995J 2 Sri L.R.
Respondent has any difficulty in paying compensation, and I,therefore, do not need to take that matter into account.
The future income of the Petitioner has been accelerated andordinarily 1 should award only the present value of that income.However in the absence of evidence with regard to the appropriaterate of interest I should take into account in ascertaining the presentvalue of the future income due to the Petitioner, I make noadjustment.
For the reasons stated in my Judgment, the Order of the LabourTribunal and the Judgment of the Court of Appeal are set aside. TheRespondent shall on or before 30 June 1991 pay the Petitioner a sumof Rs. 315,980 by way of compensation and Rs. 10,000 as costs.
DHEERARATNE, J. -1 agree.
WADUGODAPITIYA, J. -1 agree.
Appeal allowed.