006-NLR-NLR-V-71-K.-RAM-BANDA-Appellant-and-THE-RIVER-VALLEYS-DEVELOPMENT-BOARD-Respondent.pdf

For the foregoing reasons I cannot subscribe to the view that the merepassage of a regulation through Parliament gives it the imprimatur of thelegislature in such a way as to remove it from the purview of the courtsthrough the operation of section 39 (2).
The duty of interpreting the regulation and the parent Act in order tosee whether the former falls within the scope allowed by the latterdevolves on the courts alone. It is a principle that has often been asserted,and bears reassertion, that just as the making of the laws is exclusivelythe province and function of Parliament, so is their interpretation theprovince and function exclusively of the courts. In the total andexclusive commitment of this function to the care of the courts,tradition, law and reason all combine ; nor is any organ of the State sowell equipped in fact1 or so amply authorised by law to discharge thisfunction. It is self-evident that Parliament is not nor ever can be theauthority for the interpretation of the laws which it enacts.
In the view stated above, the courts as the sole interpreters of the laware committed to the duty, despite section 39 (2), to consider whether aregulation travels beyond the powers conferred on its maker. Any otherview of the law seems fraught with danger to the subject for it wouldfree the acts of creatures of the legislature from the checks andscrutinies which alone are effective in ensuring that the delegatedauthority while operating to the uttermost limits of its powers does nottravel beyond.
I thus reach the conclusion that it is within the competence of thiBcourt to subject such regulations to the ultra vires test despite section39 (2) and for the reasons earlier set out, I hold the rule in question tobe ultra vires.
I turn now to the question whether despite the rule being ultra viresand the workman therefore having a right of access to the Tribunal evenafter the lapse of three months, he has no right to relief inasmuch as thetermination of his services was prior in point of time to the date on whichthe Act came into operation. The termination was in the year 1957
1 S. A. de Smith, Judicial Review of 'A.lm. Action, p. 7.
WKE RAMAN TRY, J.—Ram Banda v. River Valleys Development Board 30
whereas Part IVA of the Statute was enacted in its entirety on 31stDecember 1957, that is in any event after the termination of theworkman’s services.
Mr. Kanganathan for the respondent submits that this is an alternativeground on which the President of the Tribunal could have rejected theapplication, for the Statute cannot be given a retrospective effect enablingworkmen whose services were terminated prior to 31st December 1957,to have recourse to Labour Tribunals. Inasmuch as all legislation mustbe presumed to be prospective rather than retrospective in its operation,Part IV A of the Industrial Disputes Act cannot, in the respondent’ssubmission, compel an employer whose liability at the time of termina-tion was confined within the four corners of the contract to submitto a new tribunal exercising a new jurisdiction and using a new yardstickof liability—that which is “just and equitable ” as opposed to thatwhich the contract determines.-
The question for consideration, then, is whether on a termination of aworkman’s services there is a vesting of the rights of parties upon thebasis of the contract in such a sense that no questions connected withor flowing from the contract can thereafter except by express enactmentor necessary implication be made justiciable by other Tribunals thanthe courts or by other standards than those afforded by the contractitself.
The appellant submits that questions of retrospective operation do notarise in the present case on the basis that the requisite for access to theTribunal is an industrial dispute and not termination simpliciter andit is submitted that although the termination may have preceded theAct the industrial dispute resulting from it arose subsequently.
I shall deal first with this submission and in the light of my conclusionson this matter consider the applicability to this case of the principlesrelating to retrospective operation of statutes.
If termination simpliciter be the requisite for access to the tribunalthen such requisite would on the facts of this case have occurred priorto the enactment of Section 31A (2) and could therefore only be.caughtup retrospectively whereas if an industrial dispute be the requisite, suchindustrial dispute may well have occurred subsequent to 31st December1957, the day on which Part IVA came into operation, although theactual date of termination preceded this date. In the latter event theseprovisions could, operating prospectively, take in such a dispute.
As already observed, the provision of law under which the workmanhas sought relief in this case is section 3IB (1). This section providesthat “ a workman or a trade union on behalf of a workman who is a
40WEERAMANTRY, J.—Ram Honda v. River Valleys Development Board
member of that union may make an application in writing to a labourtribunal for relief or redress in respect of any of the following matters:—
(а)the termination of his services by his employer ;
(б)the question whether any gratuity or other benefits are due from
his employer on termination of his services and the amount ofsuch gratuity and the nature and extent of any such benefits ;
(c) such other matters relating to the terms of employment, or theconditions of labour, of a workman as may be prescribed.”
Sub-section (c) is inapplicable to the present application and in anyevent no matters have been prescribed in terms of this sub-section. Theapplication therefore hinges on the interpretation to be given tosub-sections (a) and (6).
Both these sub-sections appear to require or pre-suppose a terminationof services. Is that, however, the only requisite, or should there furtherbe an industrial dispute in existence in order to open the doors of thetribunal to a workman ?
Dr. de Silva’s submission is that although the word “termination”occurs in sections 31B (1) (a) and (6), it is nevertheless only a dispute,that is to say an industrial dispute, which can bring a workman beforethe tribunal for redress. He contends that a dispute may emerge evenyears after the termination, for a continuous process of negotiationensues between employer and employee, the latter perhaps acting inconsultation with his trade union.
In other words it is submitted that such a dispute is a liveand continuous thing ever altering in scope and content till it oomes to ahead at the moment of making application to the tribunal. Inasmuch asone cannot therefore fix the point of time at which a matter crystallisesinto .a dispute, termination does not, to summarise this submission,furnish a test of the time of accrual of the right to invoke the powersof a Labour Tribunal. So long as such dispute is established itmatters little that the factual basis on which it rests stretches out intothe past.
In support of this view reliance is plaoed on the explanation by thePrivy Council of the scope and functions of Labour Tribunals in therecent case of United Engineering Workers* Union v. Devanayagam1.It was there observed that it would be wrong to search for a cause ofaction before a Labour Tribunal in the sense in which one looks forsuch a pre-requisite to action in a Court of Law. No doubt, one doesnot have to search for a cause of action in the sense in which such arequirement exists as a pre-requisite to aooess to a Court of Law; andno doubt also these tribunals operate, as the appellant points out, in a
» (1967)69 N.L.B.2S4.
WEERAMANTRY, J.—Ram Banda v. River Valleys Development Board 41
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setting entirely different from that in which courts of law function, fortiie tribunal’s powers are not confined within the framework of thecontract: But this does not justify us in reading into the plain termsof section 31B, provisions whioh are not in fact contained therein. Itseems to me upon a plain reading of that section, that the peg upon whichthe workman must hang his claim to approach the Tribunal is not anindustrial dispute but whatever is specified in the respective sub-sectionsof section 31B (1). In so far as sub-sections (a) and (6) are concerned,this peg would appear to be the termination of services ; and immediatelyupon such termination there would accrue to the workman a right ofaccess to the Tribunal. The section does not upon any reading requirethat the termination should as a condition o$ access to the Tribunalmature into an industrial dispute if indeed that were possible in law.
I am unable therefore to read into section 31B (1) anything more thanthe legislature has put into it and nowhere do I find either in the schemeof the Act or in the terms of that section, any requirement of the existenceof an industrial dispute as a pre-requisite to a workman’s application.Having thus reached the conclusion that the event entitling the workmanto approach the Tribunal has on the facts of the present case occurredprior to the creation of Labour Tribunals, 1 must next examine whetherthe Statute can operate retrospectively in regard to this terminationwithout violence to the principle that vested rights should not beinterfered with by later legislation;
Before I do so I must deal with a preliminary submission by learnedcounsel for the appellant who contends that We are here not concernedwith the question whether rights are prospective or retrospective butonly with the conciliatoiy functions of a settling or mediating institution.The functions of these institutions, according to the preamble to theStatute, are the prevention, investigation and settlement of industrialdisputes and the decision of disputes is not among these functions. Thismediating institution it is submitted is not circumscribed in its powers ofmediation by the circumstance that at the time of termination it was notin being. It is its duty, unfettered by traditional concepts of legal rightsand liabilities, to give effect to those concepts of social justice whichmust weigh in equity and fairness, though not in strict law, in alldecisions between employer and employee. Legal rights and dutiesin the strict sense are according to this submission left unaffected.
It would seem however that whatever be the true conception of thefunctions of these tribunals, the relief or redress which they may granttakes the shape of orders binding on the employer. The Labour Tribunalis empowered by section 31G (1) to make an order which appears to itto be just and equitable and this order becomes final and not questionableby any court in terms of section 31 (1). Furthermore, there is a duty ofcompliance with this order imposed upon the employer in terms inter aliaof section 40 (1) (g) which makes it a punishable offence for an employerto fail to oomply with any order made in respect of him by a Labour
-42 WEERAMANTRY, J.—Ram Banda v. River Valleys Development Board
Tribunal. Such orders may in the result affect adversely that legalposition stemming from the contract alone, in which the employer wouldbut for these provisions have found himself at the date of termination.It would be incorrect to say therefore that legal rights and duties asbetween employers and employees are left unaffected. The mattercannot be more clearly put than to refer to the phraseology of section31 B (4) which expressly permits a tribunal to grant relief or redress to anapplicant “ notwithstanding anything to the contrary in any contractof service between him and the employer ”.
The extent to which the creation of Labour Tribunals makes an impacton the legal position of the employer is best understood in the light of thelegislation which had till then been enacted in respect of disputes betweenemployers and employees.
The forerunner of the present legislation relating to the conciliationbetween employer and employee was the Industrial Disputes Ordinance,No. 3 of 1931, an Ordinance providing for the investigation and settle-ment of industrial disputes. This Ordinance provided for the appoint-ment by the Governor of commissions to inquire into matters relating toindustry which might be referred to it by the Governor. The Controllerof Labour could also take certain steps towards effecting a settlementand it was the duty of Conciliation Boards to bring about a settlement of.disputes referred to them. Where settlements were so arrived at, thesettlements were binding, but if not arrived at, the proposals for settle-ment recommended by the Board were published in the Gazette and anyparty failing to make a statement rejecting the settlement was deemedto have accepted such settlement. However a right of repudiationwas expressly conferred, and there was thus no imposition of such termsupon an unwilling party.
There thereafter came upon the statute book the Industrial DisputesAct, No. 43 of 1950, which was “ an Act to provide for the prevention,investigation and settlement of industrial disputes, and for mattersconnected therewith or incidental thereto ”. This Act provided forvoluntary and compulsory arbitration in regard to industrial disputes.Reference to an Industrial Court was not a right given to an aggrievedworkman but an act performable by the Minister in the exercise of adiscretion expressly conferred on him. Reference to arbitration wasentirely dependent on the consent of parties.1
The resulting position then was that subject only to the Minister’sright, in his discretion, to refer a matter to an Industrial Court, theemployer was entitled to stand upon the terms of the contract.
His right so to insist upon the common law incidents of the contractremained unaffected until the amending Act No. 62 of 1957 brought aboutthe creation of Labour Tribunals. Section 31B (1) of this Act for the
1 Section 3 (1) (d).
WEERAMANTRY, J.—Ram Banda v. River Valleys Development Board 43. _
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first time entitled an individual workman to approach a tribunal otherthan the normal courts of law for relief or redress. These tribunals were^as already observed, empowered to make orders binding upon theemployer, and exercise a power over him irrespective of his consent,thus subjecting him even against his will to liabilities not taking theirorigin in the contract.
We must therefore approach the problem of retrospective operationon the basis that the provision of law we are considering is one which had-a real impact on legal rights and duties. Could this legislation whichconfers new rights on a workman upon the termination of his servicesoperate retrospectively in respect of a past termination ?
In A kilandanayaki v. Sothinagaratnam1 the court was consideringan amendment of the Matrimonial Bights and Inheritance Ordinancechanging the definition of thediathettam prevailing under OrdinanceNo. 9 of 1911. It was held that no retrospective effect could in theabsence of express words or necessary implication be given to new lawswhich affect rights acquired under the former law. These latter wereheld therefore to remain undisturbed by the amendment.
Section 6 (3) of the Interpretation Ordinance was there described byGratiaen J. as giving statutory recognition to the rule of judicialinterpretation adopted in all civilised countries that the courts shouldnot lightly assume an intent on the part of Parliament to introducelegislation prejudicially affecting vested rights which have already beenacquired.
This and other judgments of this court were cited in support of theprinciple that there is a presumption against an interferencewith vested rights, but I would prefer not to base this judgment on themas they are cases of amending legislation and thus fall within the scope ofsection 6 (3) of the Interpretation Ordinance.
Port IVA of the Industrial Disputes Act, though nominally anamendment, in fact brought in for the first time a new scheme oftribunals empowered to grant relief of a kind not envisaged before. Itwould therefore be preferable to rest a discussion of this matter on thegeneral principles of interpretation rather than on Section 6 (3) of theInterpretation Ordinance.
The general principle is of course that statutes are presumed not tooperate retrospectively so as to. affect vested rights, and that courtswould always lean in favour of that interpretation which leaves vested
rights unaffected s.
* (1952 53 N. L. R. 385 vD. B.).
* Crates Statute Law, 6th ed., p. 397.
44 WEERAMANTRY, J.—Bam Banda v. Biver Valleys Development Board
While this proposition is not disputed on behalf of the appellant thepoint is taken that a distinction must be drawn between vested rightsand existing rights. It is only in respect of vested rights that there isno presumption that statutes are not retrospective1. It is correctlysubmitted that most pieces of legislation in fact do interfere with existingrights and that it is not the policy of the law to lean against suchinterference.
This submission necessitates an examination of the distinction betweenexisting rights and vested rights for the purpose of the rule againstretrospective operation.
The word ‘vested’ would appear to have a legal meaning which isprimarily understood as being “ free from all contingencies”2 and thedistinction between such a right and an existing right has been wellexplained by Buckley L.J. in West v. Owynne3 in these terms: “ Supposethat by contract between A and B there is in an event to arise a debtfrom B to A, and suppose that an Act is passed which provides that inrespect of such a contract no debt shall arise. As an illustration takethe case of a contract to pay money upon the event of a wager or the caseof an insurance against a risk which an Act subsequently declares tobe one in respect of which the assured shall not have an insurable interest.In such a case, if the event has happened before the Act is passed, so thatat the moment when the Act comes into operation a debt exists, aninvestigation whether the transaction is struck at by the Act involves
an investigation whether the Act is retrospectivebut if at the date
of the passing of the Act the event has not happened, then the operationof the Act in forbidding the subsequent coining into existence of a debtis not a retrospective operation, but is an interference with existingrights in that it destroys A’s right in an event to become a creditor of B ”.It was held that there was nothing in the language of the new enactmentexcluding from its scope contracts entered into prior to its date ofoperation. The rights affected were merely existing rights and therewas no presumption against interference with existing rights.
Where then prior to the enactment of the statute the transaction isdone with and finished, where the contract no longer subsists, can itbe said that the Statute merely affects existing rights or does it notrather strike at vested rights which have crystallised on the basis thatthe contractual nexus is no more ? In other words, where the terminationof the contract has already taken place, is an employer whose rightsagainst and liabilities towards his employee are at that moment of time
1 Crates Statute Law, 6th ed. pp. 397*8; Halsbury, 3rd ed., vol. 36, p. 423.
Be Edmondson's Estates 1868 L. B. 5 Eq- 389 at 396-7.
[1911) 2 Ch. lot 12.
WEERAMANTRY, J.—Ram Banda v. River Valleys Development Board 46
justiciable purely upon the basis of the contract, to be subjected tofurther claims upon him arising from that Belf-same employer-employeerelationship which has come to an end ?
I think not, for his rights are vested in him at the moment of termina-tion, as are those of the employee, and in regard to such rights an Actis always presumed to speak as to the future. In the absence of expressprovision or necessary implication rights and obligations in any sensecannot be engrafted upon this dead relationship any more than theBent Restriction Act or the Debt Conciliation' Ordinance can withoutexpress provision or necessary implication apply to contracts terminatedand done with when they came into operation.
There would appear to be no provision in the Act which expressly,or by necessary implication leads to the conclusion that the Act iB retros-pective in its operation. It is true that the definition of " workman ”in section 48 expressly includes any person whose services have beenterminated but this is only for the purposes of proceedings under theAct in relation to any industrial dispute. It is not therefore applicableto Part IVA of the Act which is what concerns us here. Moreover,even in regard to industrial disputes there is room for a difference ofview on the question whether a workman includes a past workman1.
The person given the right to ask a Labour Tribunal for relief or redressis a workman and in the absence of any necessary indication to thecontrary I read this term as referring to a person who is a workmanunder the relevant contract of employment at or after the coming intooperation of Part IVA.
We thus arrive at the conclusion that although the rule in questionis ultra vires, the Statute does not apply retroactively to a terminationwhich has occurred prior to the introduction of the Aot inasmuchas this would involve an interference with vested rights for which there isneither express provision nor necessary implication in the Act.
The President has arrived at a finding of fact in the present casethat the termination was prior in time to the statute creating LabourTribunals and in the light of this finding I hold that the workman in thepresent case has no right of access to a Labour Tribunal.
This appeal cannot therefore succeed and is dismissed with costs.
Appeal dismissed.
1 See the dissenting judgment' in Colombo Apothecaries Ltd. v. Wijesooriya(1968) 70 N. L. R. 481.