KUMARA FERNANDO AND OTHERS v. COMMISSIONER OF LABOUR AND OTHERS

012-SLLR-SLLR-2007-V-1-KUMARA-FERNANDO-AND-OTHERS-v.-COMMISSIONER-OF-LABOUR-AND-OTHERS.pdf


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KUMARA FERNANDO AND OTHERSv
COMMISSIONER OF LABOUR AND OTHERS
COURT OF APPEALIMAM, J.
SRISKANDARAJAH, J.CA 2282/02CA 1070/03CA 1080/03NOVEMBER 29, 2006JANUARY 23, 2007
Termination of Employment of Workmen (Special Provisions) Act 45 of 1971(TEW Act) – S2 (1), S2(1) b, S2 (2), S5, S6 – move to merge two Banks -Termination of services of employees – Industrial Disputes Act – S48 -Absolute discretion vested in the Commissioner of Labour – Bona fides -Natural Justice – Bias – Retrenchment only on a voluntary basis – Method ofselection – Arbitrary? Writ of Certiorari futile?
In August 2000 the Standard Chartered Bank (SCB) acquired the Bankingoperations of ANZ Grindlays Bank Ltd., and subsequent to the acquisition ANZGrindlays Bank Ltd., changed its name to Standard Chartered Grindlays BankLtd. (SCGB)
The two Banks made a application under S2 (1) (b) of the TEW Act seekingthe approval of the Commissioner to terminate the services of certainemployees. This was approved.
The petitioners in the three applications sought to quash the order of theCommissioner of Labour made under S2 (1) (b) of the TEW Act, approving thetermination of their services.
It was contended by the petitioners that TEW Act can be resorted to generallyin a situation where the business of the employer is closed down and not in asituation where the employees become excess staff as a result of a •prospective merger and the business still continues.
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It was also contended that TEW Act should be read together with the expresscondition imposed by the Central Bank to the effect that employees should beretrenched purely on a voluntary basis and in the circumstances, the ordersmade by the Commissioner of Labour – are illegal, ultra vires – and theyshould be reinstated.
Held:
S2(2)b read with S2(1)b of the TEW Act constitutes theCommissioner of Labour as the sole authority to declare whetherto grant or refuse permission to terminate upon an applicationmade by the employer.
S2 (2)b – provides by express and unequivocal statutory languagethat approval to terminate may be granted or refused by theCommissioner – in his absolute discretion.
S2(2)(e) when dealing with the power of the Commissioner togrant relief when he has decided to grant approval to terminatealso renders his decision on this relief well protected, as it alsoexpressly refers to absolute discretion.
In S2(2)(f) the intention of the Act is manifestly clear which is toeffect finality of litigation/ disputes by providing that such an orderis final and conclusive.
S 20 establishes primacy of this statute over any other written law.Per Imam, J.
‘The Court must strive to apply an objective standard which leaves to thedeciding authority the full range of choices which the legislature is presumedto have intended, decisions which are extravagant or capricious cannot belegitimate, but if the decision is within the confine of reasonableness, it is nopart of the Court's function to look further into its merits”.
In accordance with the prevailing laws – TEW Act which is suigeneris and prevails over all other laws with the Commissioner’sjurisdiction not being fettered by any other state agency – CentralBank.
The petitioners have failed to point out any part of the order whichexhibits bias. Surmise or conjecture is not enough. There must becircumstances from which a reasonable man would think it likely orprobable that the Justice or Chairman as the case may be would ordid favour one side unfairly at the expense of the other. The Courtwill not inquire whether he did in fact favour one side, certainly,suffice it that reasonable people might think he did.
Held further
An employer has the right to bona fide retrench his employees, onthe ground that such employees are redundant to his business.Once the necessity for retrenchment is established the employer is
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free to decide on the number of employees who would becomesurplus to his requirement. Retrenchment is a right of themanagement and is a necessary incident of the industry, so long asit is exercised bona fide, the employer's decision should beaccepted.
‘In Sri Lanka there is no requirement for last in first out (LIFO). The employerhas a discretion to decide the method of selection for retrenchment.'
Per Imam, J.
“In this case some positions of the employees retrenched are no longer inexistence and the status quo cannot be resumed, there will be utter disasterand mayhem, if the workmen claim a return to work".
APPLICATION for Writs in the nature of Certiorari.
Cases referred to:
Barsi Light Railway Co. v Joglekar- 1957 1 (LLJ)243
Eksath Kamkaru Samithiya v Commissioner of Labour – 2001 2 SLR p137.
Nestles Limited v The Consumer Affairs Authority 2005 – 2 SLR 188
Dr. S. U. S. Perera v The University of Colombo.
Metropolitan Properties (FGC) Ltd. v. Lannon (1969) 1QB 577.
Vishwamitra Press v Workers of Vishvamitra Press (1952) LAC 20.
Shibly Azeez PC with Shirley Fernando PC, Farman Cassim and NishanthaSirimanne for petitioner
Ms. M.N.B. Fernando DSG for 1st and 2nd respondents
Sanjeewa Jayawardane with Ms. Priyanthi Gunaratne for 3rd and 4threspondents.
May 9, 2007
IMAM, J.
The petitioner in CA. writ applications No. 1070/03,1080/03 and 012282/02 respectively, being at all times material, employeesbelonging, to the “Clerical” “Management” and "Support" staffcategories of the 3rd and 4th respondents namely StandardChartered Bank (henceforth known and referred to as “SCB”) andStandard Chartered Grindlays Bank Limited, (henceforth know andreferred to as “SCGB”) respectively, seek mandates in the nature of
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writs of certiorari seeking to quash the 3 orders made by the 1strespondent the Commissioner of Labour approving the termination ofthe petitioner’s services in respect of applications bearing Nos.TE/96/2001, TE/97/2001 and TE/82/2001 as prayed for in theirrespective petitions, in accordance with section 2(1 )(b) of theTermination of Employment of Workmen Special Provisions Act No.45 of 1971 (hence forth referred to as “TEW” Act.)
The facts in the aforesaid cases are as follows. On or aboutAugust 2000 the 3rd respondent bank “SCB” acquired the Sri LankaBanking operations of a Foreign Commercial Bank also operating inSri Lanka called and know as ANZ Grindlays Bank Limited.Subsequent to the said acquisition ANZ Grindlays Bank Limitedchanged it’s name to Standard Chartered Grindlays Bank Limited(“SCGB”), namely the 4th respondent in this case.
The petitioners in all of the aforesaid Writ Applications havesought to quash by way of Writs of Certiorari, the orders made by theCommissioner of Labour made in respect of the inquiries conductedby the 2nd respondent (Inquiring Officer exercising delegatedauthority) into the said applications for the termination of thepetitioners services.
CA.(Writ) Application No. 1070/03 was instituted by 19 ClericalStaff category of employees in respect of the order made by theCommissioner of labour in Application for termination bearing No.TE/96/2001. CA (Writ) Application No. 1080/03 was instituted by 12Managerial Staff category of employees in respect of the order madeby the Commissioner of Labour in Application for termination bearingNo. TE/97/2001, whereas CA. (Writ) Application No. 2228/02 wasinstituted by 54 Support Staff category of employees in respect of theorder made by the Commissioner of Labour in Application fortermination bearing No. TE/82/2001.
Consequent to the aforesaid writ applications being instituted 01petitioner out of a total of 19 in CA. 1070/03,1 petitioner out of a totalof 19 in CA. 1070/03, 1 petitioner out of a total of 12 in CA. 1080/03and 21 petitioners out of a total of 54 in CA. 2282/02 withdrew therespective compensation amounts deposited to their credit with theCommissioner of Labour, resulting in 23 petitioners out of the totalnumber of 85 petitioners in the aforesaid 3 cases having accepted
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the respective compensation awarded to them. The petitionerscontend that the remaining 62 petitioners have not as stated in thewritten submissions tendered on behalf of the petitioners acceptedthe substantial compensation awarded to them by the Commissionerof Labour, and the petitioners contend that despite the severefinancial constraints faced by them since being terminated from 50service over 3 years ago for no fault of theirs seek reinstatement inservice.
Learned President’s Counsel who appears for the petitionerssubmitted that the petitioners are dissatisfied and complain againstthe orders made by the Commissioner of Labour inter alia, for thefollowing reasons. The petitioners allege that,
The Orders made by the Commissioner of Labour, areillegal, ultra vires and perverse.
The Inquiring Officer (2nd respondent) and theCommissioner of Labour have aced in total violation of the 60principles of Natural Justice, and have failed to offer thepetitioners a full and fair hearing at the respective Inquiries.
The Commissioner of Labour could not have proceeded tohear and determine the 3 applications made by the banksto terminate the petitioner’s services in the aforementioned3 cases as the conditions for retrenchment imposed by theCentral Bank were not adhered to by the Commissioner.
The Respondents have shown an utter lack of bona fidestowards the petitioners.
The Inquiring officer and the Commissioner of Labour were 70wrongfully and/or unlawfully influenced by the banks andthus the orders of the Commissioner of Labourdemonstrate a clear bias in favour of the banks which hasresulted an injustice being caused to the rights andinterests of the petitioners.
The actions of the banks and the Commissioner of Labourhave cumulatively violated the legitimate expectations ofthe petitioners inter alia, to be retrenched entirely on avoluntary basis and not against their wishes.
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The petitioners were not afforded a full and fair opportunityto present their respective cases before the Commissionerof Labour and/or the 2nd respondents.
No accepted rational or logical methods have beenadopted by the banks when they purported to identify thepetitioners for retrenchment, and hence the said acts of thebanks are arbitrary and discriminatory.
The petitioners who were identified were subsequentlysingled out by being transferred to a common pool, werenot allocated any work for over 1 year, but were only paidtheir monthly salaries and were informed that they couldreport to work if they so desired. Thus the banks werewrongfully indulging in acts to isolate, degrade and destroythe morale of the petitioners, thereby compelling them toaccept the compensation and retire prematurely.
The banks outsourced the service of at least 136 personnelwhen the inquiries into the termination of the petitioner’sservices were pending before the Commissioner of Labour,in order to carry out the functions previously performed bya fewer number of petitioners. Thus the Banks’ contentionthat the petitioners were excess staff was a stratagememployed by the bank.
The Commissioner of Labour and the Inquiring Officer havefailed to properly evaluate the evidence placed before themand hence failed to draw the necessary inferences at thesaid Inquiries.
The compensation awarded by the Commissioner ofLabour was in any event inadequate to compensate thepetitioners for their loss of employment.
The petitioner’s aver that the banks Applications made to theCommissioner of Labour under section 2(1 )(b) of the ‘TEW" Act fortermination of the petitioner’s services have clearly been made onthe basis that the petitioners were surplus or excess staff, allegedlyas a result of the move on the part of the 2 Banks to merge. It wascontended by the petitioners that a situation where employeesbecome excess and the business of the employer still continues is
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clearly distinguishable from a situation where the entire business ofthe employer is closed down, which is referred to as “closure". Thepetitioners referred to section 48 of the Industrial Disputes Act (IDA)where “retrenchment” is defined as “retrenchment” means thetermination by an employer of the services of a workman or workmen iaoon the ground that such workman or workmen is or are in excess ofthe number of workmen required by such employer to carry on hisindustry”.
The petitioners submit that the “TEW” Act refers specificsituations in which the scheduled employment of workmen can beterminated, such as the term “closure” found in section 6A of theTEW Act refers to such a given specific situation in which the ‘TEW”
Act can be utilized. Thus, the ‘TEW’ Act can be resorted to generally,in a situation where the business of the employer is closed down(closure), and not in a situation where the employees become 130excess staff merely as a result of a prospective merger and thebusiness still continues.
The petitioners cited ‘The Legal Framework of Industrialrelations in Ceylon” by S.R. De Silva where the term closure’ hasbeen defined as follows.’ It has been held by the Supreme Court ofIndia in Barsi Light Railway Co v Joglekari') that retrenchment doesnot cover a case where the business itself is closed down, since it isthe essence of retrenchment that the employer should continue tocarry on his industry after the termination of the services of theworkmen. In other words, the closure of a business is not a discharge 140of surplus labour. ‘The petitioners thus aver that term” closurecontemplates a situation where the business of the employer ceasesto exist completely: therefore the question of excess/ surplus staffdoes not arise and the employees can be longer make any claim forre-instatement in service.
The petitioners further allege that by resorting to the provisionsof section 2(1 )(b) of the ‘TEW” Act in order to terminate the servicesof the petitioners for no fault of theirs on non-disciplinary grounds isclearly contrary to the intention of the legislature, and also constitutesa clear abuse of process,, in as much as, inter alia the petitioners 150have been treated as excess staff not because there was a loss ofbusiness or lack of it, (on the Contrary the accounts of the Banks
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show that their profits were soaring), but solely due to a merger ofSCB and SCGB which is not a ground for termination ascontemplated by the legislature and in any event the merger cannotbe considered a good ground for termination under and in terms ofthe ‘TEW” Act. The petitioner in this context referred to ‘The contractof employment” by S, R. De Silva at page 230, with regard to therationale for the promulgation of the ‘TEW Act” of 1971. At page 230it is stated as follows, “ The substantial reason for the Act was theneed felt at that time by the State to exercise a greater degree ofcontrol, over retrenchment and lay off of employees in the privatesector on grounds of loss of business, lack of raw materials and soon, and in those instances where such grounds are found to exist, tokeep the number of persons so retrenched to the minimum. The Actwas not intended to preclude termination on good grounds, but wasintended to prevent resort to retrenchment and lay off incircumstances not warranting it and to ensure that employees wouldreceive relief expeditiously, if laid off or terminated. The need felt bythe State to exercise a greater degree of control over non disciplinaryterminations became urgent at that time in the context of increasingunemployment in the country…” (WS1) The petitioners aver thatunder these circumstances the banks could not have madeApplications to have the services of the petitioners terminated underthe ‘TEW’ Act, and the Commissioner of Labour could not haveentertained the said Applications, nor thereafter, heard anddetermined the same. It is submitted by the petitioners that whensection 2(1 )(a) of the ‘TEW’ Act read together with the expresscondition imposed by the Central Bank to the effect that employeesshould be retrenched purely on a voluntary basis, and with section 5of the ‘TEW” Act, the applications made by the banks and the ordersmade by the Commissioner of Labour are illegal, ultra vires, unlawful,perverse, null and void, are of no force in law, and liable to be setaside by this Court.
Learned President’s Counsel appearing on behalf of thepetitioners cited Eksath Kamkaru Samithiya v Commissioner ofLabout2) where His Lordship U.De Z. Gunawardene, J dealt in detailinter alia, with the provisions of sections 5 and 6 of the TEW’ Act,and the discretion vested with the Commissioner of Labour undersection 6 in instances where the termination is found to be illegal. HisLordship held that “Manifest purpose of section 5 is to wholly protect
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the workman against the termination of his service contrary to theprovisions of the relevant Act, and to keep the contract ofemployment intact notwithstanding such illegal termination.” (WS-2)
Thus the petitioners contend that if the order of the Commissioner ofLabour to grant the Banks approval for the termination of thepetitioners service is found to be illegal, an overriding duty would beimposed on him to order the employer to continue the petitioners inservice, as if no termination had taken place at all, and therefore theCommissioner would have no discretion to do/act otherwise under 200section 6 of the “TEW” Act. The petitioners submit that the 1strespondent could not have approved the termination of thepetitioner’s services, as the same was illegal and therefore, could nothave proceeded to award the petitioners compensation in lieu ofreinstatement, but a mandatory duty was cast on him to order thebanks to continue to employ the petitioners.
Counsel for the 3rd and 4th respondents raised a preliminaryobjection on 26. 07. 2004 to the effect that the reliefs prayed for bythe petitioners were misconceived in law and that the Petitionersapplications were futile. This Preliminary Objection together with 210several other Preliminary Objections raised on behalf of the 3rd and4th respondents were determined by this Court prior to the hearinginto the merits of these writ applications, and the aforesaid objectionswere overruled by this Court on 09.12.2004 including the objectionrelating to the reliefs prayed for being misconceived in law. Counselfor the 3rd and 4th respondents submitted that although thepetitioners sought interim relief to prevent the termination of theirservices by the employer before this court in December 2002 in CA.
1325/2002, this interim relief which was heard by Their LordshipsN.E.Udalagama, J and Edirisuriya, J after a complete interpartes 220hearing was refused. This order it is submitted was not challenged inthe Supreme Court. The Award of The Commissioner of Labour in2282/02 is the highest ever total award in the history of Labour Lawin Sri Lanka being Rs. 82,158,582/- in regard to 55 petitioners, whichamounts to an average of Rs. 1,493,792/- per person, submitscounsel for the 3rd and 4th respondents. Counsel went on toelaborate the total awards made by the Commissioner in CA.1070/03 and CA. 1080/03 respectively too. Counsel stated that theAwards in each case was as follows.
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CaseAwardNo ofAverage per
Petitionersperson
CA. 2282/02Rs. 82,158,582/-55Rs. 1,493,792/-
CA. 1070/03Rs. 29.437,931/-19Rs. 1.549,365/-
CA. 1080/03Rs. 35,658,198/-11Rs. 3,241,654/-
TotalRs. 147,254,711/-
Counsel for the 3rd and 4th respondents contend that theaforesaid Applications of the petitioner’s cannot succeed, as thereexist several impediments in law, both preliminary and substantive.Counsel avers that in the prayer for relief in CA. 2282/02 thepetitioners have prayed for a writ of prohibition against the 3rd and 2404th respondents, preventing them as employers, from terminating theservices of the petitioners. The petitioners themselves, by praying forsuch a writ of prohibition have accepted the vital importance ofpreventing the employer from terminating the services of thepetitioners with the intention of pursuing the writ application. Thepetitioners, according to Defence counsel have also conceded thatthe act of termination is exclusively vested in the employer. Learnedcounsel avers that letters of termination were formally issued, theterminations duly effected and compensation deposited. The stayorder sought for by the petitioners was refused by Their Lordships 250N.E.Udalagama, J and Edirisuriya, J in CA. 1325/02 in December2002, and hence according to learned Counsel for the 3rd and 4threspondents as no appeal was filed the terminations stand which isthe status quo.
It is pointed out by learned counsel for the 3rd and 4threspondents that the Writ of prohibition is no longer a live issue at alland cannot be granted as prohibition would lie only to prevent theoccurrence of an event which has not yet taken effect, whereas inthis instance termination of employment of the services of thepetitioners in CA. 2282/02 have occurred more than 4 years before 260the application.
Counsel for the 3rd and 4th respondents submit that the onlyremedy that can be granted theoretically is the Certiorari to quash thedocument marked X2 being the approval of the Commissioner ofLabour for termination. Counsel submits that however if the Writ of
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Certiorari is granted, then the order of the Commissioner of Labourwould be annulled. However learned Counsel points out that seriouscomplications would result in respect of issuing such a writ, whichwould be as follows, inter alia.
More than 4 years have elapsed since the termination of zizemployment of the petitioners.
The termination has been acted upon by all parties includingthe petitioners who have accepted all terminal benefitsthereby accepting the termination, with some of thepetitioners having accepted the compensation package.
The Bank and its structure has subsequent to the mergerundergone a significant change with the status quo whichprevailed being no longer in existence.
Judicial authorities expound the principle that re-instatementmeans the resumption of the status quo ante, which means 280re-installing the workman to the same post, same conditionsand terms that prevailed prior to termination, and if this is notpossible, then the only alternative is compensation. Theresumption of the status quo ante is not possible even if allparties including the bank are amenable to it due to therestructuring which the bank has undergone, its downsizing,
its streamlining, advanced computerization of functions andthe introduction of new technologies.
Learned counsel for the 3rd and 4th respondents referred torelevant provisions of the “TEW” (Special Provisions) Act, namely 290section 2(1) which reads as follows.
“No employer shall terminate the scheduled employment of anyworkman without
The prior consent in writing of the workman; or
The prior written approval of the Commissioner.”
Section 2 (2) states as follows
‘The following provisions shall apply in the case of the exerciseof the powers conferred on the Commissioner to grant or refuse hisapproval to an employer to terminate the scheduled employment ofany workman.”300
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Section 2(2) sub paragraph (b) states as follows:
‘The Commissioner may, in his absolute discretion decide togrant or refuse such approval.”
Section 2(2) sub paragraph (e) states as follows:
‘The Commissioner may, in his absolute discretion, decide theterms and conditions subject to which his approval should begranted, including any particular terms and conditions relating to thepayment by such employer to the workman of a gratuity orcompensation for the termination of such employment.”
Section 2(2) subparagraph (f) states as follows.310
“any decision made by the Commissioner under the precedingprovisions of this subsection shall be final and conclusive, and shallnot be called in question whether by way writ or otherwise:
In any Court or
In any Court, tribunal or other institution established under theIndustrial Disputes Act."
Learned Counsel submits that these statutory provisions whichdo not find any parallel in any other law, have been advisedly devisedby the legislature to provide a greater degree of immunity in respectof orders made by the Commissioner of Labour under this statute to 320ensure expeditious conclusiveness to proceedings under the Act.Counsel submits that in a series of judgments delivered recently bythe Court of Appeal including Nestles Limited v The Consumer AffairsAuthority <3) and Dr. S.U.S. Perera v The University of Colombo<4> itwas held by Their Lordships Justices Sripavan and Basnayake thatCourts cannot, through a perceived or subjective process of so calledJudicial Activism, refuse to give effect to the statutory word when it isplain, clear and unambiguous. Counsel submits that section 2(2)(b)read with 2(1 )(b) of ‘TEW” (Special Provisions) Act constitutes theCommissioner of Labour as the sole authority to decide whether to 330grant or to refuse permission to terminate, upon an application toterminate made by an employer. Counsel avers that theCommissioner’s order consists of only the permission to terminateexcess employees by way of the “Written approval of theCommissioner". However counsel submits that the termination
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proper has been effected by the 3rd and 4th respondents by decidingto terminate the contract of employment and consequently issuingformal letters of termination to each of the petitioners. It is averred bycounsel that even if the Commissioner’s order is quashed by way ofa Writ of Certiorari, the consequent act of termination by the 340employer, namely the factum of termination would remain intact andthus cannot be changed. Counsel contends that the petitionerscannot contend that if an order of approval is quashed, then allconsequential acts thereafter are also invalid as the termination Actis feu/' generis and extraordinary in its specialty as it providesexpressly for terminations to be rendered illegal and for punitivesanctions to be imposed for illegal terminations. Counsel submitsthat in CA. 2282/02 the petitioners in the Prayer to the petition havenot specifically prayed to be re-instated, and as a Court cannot grantmore than what has been prayed for, the Writ Application CA. 3502282/02 should be dismissed. Counsel states that in the aforesaidcase all the petitioners have taken their Gratuity, Leave payentitlement, EPF and ETF, and as all the petitioners have obtainedtheir terminal benefits, there exists an unequivocal acceptance thattheir services are terminated.
Counsel submits that several of the petitioners have withdrawnthe Compensation awarded by the Commissioner and deposited withthe Commissioner of Labour by the 3rd and 4th respondents whichclearly indicate their acceptance of their termination as well as theCommissioner’s order of compensation upon termination.360
The numbers of petitioners who have taken their Compensationpayments in each of the cases are as follows.
CA. 1070/03-6Petitioners.
CA. 1080/03-3Petitioners.
CA. 2282/02-21Petitioners.
Counsel avers that this is in addition to all having taken theirother terminal dues as well, which enhances the fact fact the eventhe workmen have accepted their termination of employment. It ispointed out by counsel that in the event of the petitioners beingreinstated in service a tremendous practical difficulty would arise, as 370the sums which have already been given to the petitioners wouldentail an enormous difficulty in recovering the same. For the
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aforesaid reasons counsel for the 3rd and 4th respondents submitsthat the petitioners cannot be reinstated to their original posts, andurges that these 3 writ applications be dismissed.
Order of the Commissioner
I have examined the 3 writ applications of the petitioners, theobjections of the respondents, the written submissions and othermaterial tendered by both sides, and the law applicable to theseapplications. In December 2002 the 55 petitioners sought interimrelief in CA. 1352/02 to prevent the termination of- their services bythe employer, which application was refused by Their LordshipsN.E.Udalagama, J and Edirisuriya, J subsequent to a complete interparties hearing. It is pertinent to note that this order was notchallenged in the Supreme Court. In CA. 2282/02 the petitioners inthe prayer to the petition have not specifically prayed to be re-instated in service.
Section 2(2)(b) read with section 2(1 )(b) of the ‘TEW” (SpecialProvisions) Act constitutes the Commissioner of Labour as the soleauthority to decide whether to grant or refuse permission to terminate,upon an application made by the employer. Significantly section 2(2)(b)provides by express and unequivocal statutory language that approvalto terminate may be granted or refused by the Commissioner in hisabsolute discretion. Section 2(2)(e) of the ‘TEW’ Special ProvisionsAct when dealing with the power of the Commissioner to grant reliefwhen he has decided to grant approval to terminate also renders hisdecision on this relief well protected, as it also expressly refers to“absolute discretion". The words “absolute discretion” have rarely beenused by the Legislature in an Act of Parliament. These 2 provisionspertaining to “absolute discretion” must be considered in view of thefact that the Act is a Special Act promulgated to make special provisionin respect of the termination of workmen in non-disciplinary situations.In section 2(2)(f) of the aforesaid Act the intention of the legislature ismanifestly clear which is to effect finality of litigation / disputes byproviding that such an order is “final and conclusive” and shall not becalled in question whether by way of Writ or otherwise. Section 20 ofthe aforesaid Act establishes primacy of this Statute over any otherwritten law, for in the event of any inconsistency between theprovisions of this Act and the provisions of any other written law, theprovisions of this Act shall prevail.
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When there is a possibility of multiple conclusions being arrivedat, the decision must be one made within vires i.e. within the powerto make decisions and not exceeding it. In this context it is relevantto cite Professor H.W.R. Wade with regard to the proper applicationof the Wednesbury principle of reasonableness, which is as follows.
“the doctrine that powers must be exercised reasonably has to bereconciled with the no less important doctrine that the Court must notusurp the discretion of the Public Authority which Parliamentappointed to take the decision. Within the bounds of legalreasonableness is the area in which the deciding authority has 420genuinely free discretion. If it passes those bounds it acts ultra vires.
The Court must therefore resist the temptation to draw the boundstoo tightly merely according to its own opinion. When a DivisionalCourt yielded to that temptation by invalidating a Secretary of State'sdecisions to postpone publication of a report by Company Inspectors,the House of Lords held that the judgments illustrate the danger ofJudges wrongly thought unconscientiously substituting their ownviews for the view of the decision maker who alone is charged andauthorized by Parliament to exercise a discretion. The Court muststrive to apply an objective standard which leaves to the deciding 430authority the full range of choices which the legislature is presumedto have intended. Decisions which are extravagant or capriciouscannot be legitimate, but if the decision is within the confines ofreasonableness, it is no part of the Court’s function to look further intoits merits.” There is no ultra vires as far as the Commissioner isconcerned, as the Commissioner has been invested with theexclusive power to decide the question of whether to grant or refuseapproval for as application made by an employer to terminate theservices of its workman under section 2(1) of the “TEW” (SpecialProvisions) Act. Thus, in my view the aforesaid orders of the 440Commissioner of Labour are legal, within vires and non perverse.
Natural Justice
With regard to the complaint of the petitioners that there was aviolation of the principles of Natural Justice by the Inquiring .Officernamely the 2nd respondent and the Commissioner of Labour byfailing to afford the petitioners a full and fair hearing at the respectiveinquiries, the inquiry before the Commissioner which was undersection 02 of the “TEW” Act was very long where Sudheera
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Wijetileke and Bharata Ganawickrema who were office bearers of theUnion gave evidence. None of the affected workmen gave evidencenor claimed reinstatement. Mr. Anura Silva the witness of the Bankwas cross-examined by learned President’s Counsel Mr. ShirelyFernando who appeared on behalf of the Union on 9 days, and theinquiry exceeded one year, with 25 dates of inquiry. However theprinciples of immunity expressly resorted to by the legislature in itswisdom as clearly set out in sections 2 (2)(b), 2(2)(e) and 2(2)(f) ofthe ‘TEW” (Special Provisions Act) read in conjunction with thetextual authority of professor Wade and the dicta of Lord Denning,show that the order of the Commissioner of Labour cannot beinterfered with, unless he has made an order which is so perversethat it shocks conscience of Court. The order of the Commissioner aswell as the reasons thereof (X2 and 1R1) are comprehensivecontaining the detailed reasoning of the Commissioner, wherein themain issues are dealt with in an objective manner. The aforesaidorder is not tainted with mala tides, and as the order does not shockthe conscience of Court, it is my view that there is no violation of theprinciples of Natural justice. Hence I see no reason to interfere withthe aforesaid order of the Commissioner.
Conditions Imposed By The Central Bank
Learned President’s counsel for the petitioners averred that oneof the principal complaints of the petitioners was that the clearconditions for retrenchment imposed by the Central Bank were notfollowed, and hence the Commissioner of Labour could not haveproceeded to hear and determine these 3 Writ Applications. Acondition imposed by the Central Bank as stated in paragraph 2 (iv)of its letter dated 23.01.2001 (X7) refers to “purely on a voluntarybasis” in respect of the retrenchment of the Petitioners. The CentralBank reiterated this condition consequent to a discussion which theCentral Bank had with the then CEO of “SCGB” Mr. Frank Gamble,in the letter addressed (X7) to Mr. Frank Gamble by the Director ofBank Supervision of the Central Bank dated 23.01.2001 which statesthat “With regard to item (iv) above, as discussed at the meeting youhad with us on 17.01.2001, we wish to reiterate that the releasing ofemployees should be carried out purely on a voluntary basis and ina fair and equitable manner for employees of both banks and inaccordance with the prevailing laws. No employee should be
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removed from one bank to the other until the merger of the 2 banksis finalized. In case of retrenchment of staff, you mentioned that eachbank would offer compensation packages to its employees and thatcomprehensive information on those packages would be furnished to 490the CBSL”. In my view "and in accordance with prevailing laws”refers to the ‘TEW” (Special Provisions) Act, which is ‘sui generis'and prevails over all other laws, with the Commissioners jurisdictionnot being fettered by any other state agency. In this context section12 of the Banking Act was clearly satisfied, the Ministers approvalalso obtained, and hence the bank has complied with the Law. In theevent of a workman having been removed from one Bank to theother before the merger was complete the workman could havegiven evidence to this effect at the inquiry before the Commissioner,which no workman did. For the aforesaid reasons, I am of the view 500that the conditions of the Central Bank have been complied with bythe 'SCGB' and the approval of the Central Bank is not a matter inissue in this case.
Lack of Bona Fides towards the Petitioners
From an examinations of the inquiry before the Commissioner itis apparent that the petitioners themselves delayed the inquiry.During the pendency of the inquiry, the Bank paid the petitioners theirsalaries and other benefits in full. For instance in CA. 2282/2002 theinquiring Officer had observed on 31.05.2002 that it was the 12th dayof inquiry and that the witness of the Bank was under cross 510examination for the last 8 days of inquiry (as per proceedings of31.05.2005 at page 156 of the brief) stated that the inquiry should beconcluded on 31.07.2002, and fixed several more dates of inquiry.However notwithstanding this direction learned President’s Counselfor the petitioners continued to cross examine the Bank's witness fora further 3 days namely 06.06.2002, 15.06.2002 and 12.07.2002.
The petitioner made an application bearing No. CA. 1325/02 tothis court, where their Lordships N.E.Udalagama, J with Edirisuriya,
J agreeing held that the petitioners should lead their evidence withoutdelay, state their case when the inquiry commences, and directed the 520Commissioner to conclude the inquiry as expeditiously as possible.
The Commissioner fixed the inquiry for a further 9 days of inquirygiving the petitioners sufficient time to present their case. Even inCA. 1070/03 the relevant application was lodged with the
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Commissioner-General of Labour on 19.12.2001 consequent to which13 dates were fixed for inquiry upto 24.09.2002. On 24.09.2002 theinquiring Officer noted that the Bank’s witness had been under crossexamination for 13 dates spanning a period of 9 months (page 119 ofthe Brief in Case No. CA 1070/03). Under these circumstances theinquiring Officer consented to grant the petitioners a further four 530months in which to present and conclude their case. Thus in this caseto the proceedings were delayed by the petitioners during whichperiod the petitioners were paid their monthly salaries. The sums paidas salaries during the year long inquiry were as follows:
CA. 2282/02-Rs. 13.2 Million
CA. 1070/03-Rs. 5.22 Million
CA. 1080/03-Rs. 9.1 Million
Amounting to a total of approximately 27.25 million.
For the aforesaid reasons in my view there is no material orevidence to suggest that the respondents demonstrated a total lack 54oof bona fides towards the petitioners, and hence I reject theproposition tendered on behalf of the petitioners and hold that therewas no lack of bona fides towards the petitioners by the respondents.
Allegations of Bias-Meeting with the Commissioner
This allegation of the petitioners was comprehensively dealtwith by DSG Ms. Murdu Fernando, who submitted that there was noproof in any manner that the Commissioner was influenced in anyway. The petitioner’s contention was that the inquiry into the Bank’sApplications for termination was expedited by the inquiring Officer(the 2nd respondent) after the then CEO of SCGB ( Mr. Wasim Saifi) 550and the witness for the Bank’s Mr. Anura Silva who was at such timeunder cross-examination had met the Commissioner of Labour on30.05.2002 without any of the petitioners representatives beingpresent and without even their own legal counsel being present,during the course of the inquiry in May 2002, and had admittedlydiscussed matters relating to expending the inquiry with theCommissioner (pages 43 and 44 of the proceedings in the CA.1070/03 Brief. The petitioners are unaware of what other matterswere surreptiously discussed between the said parties. It was alsoadmitted during cross-examination by the bank’s said witness 560
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Mr. Anura Silva that the said meeting was held just one day beforethe next day fixed for inquiry into Application No. TE/82/2001 {CA.2282/02}, (Page 44 of the proceedings in the CA. 1070/03 Brief). ThePetitioners submit that this surreptitious meeting directly resulted inthe inquiring Officer’s sudden and arbitrary decision taken on thevery next day namely on 31.05.2002 to drastically curtail the durationof the inquiry and restrict the employees' Counsel’s opportunity topresent the entire case on behalf of the employees (pages 156 to164 of the proceedings in the CA., 2282/02 Brief).
His Lordship Lord Denning in Metropolitan Properties (FGC) Ltd 570v Lannorfc) as reproduced at pages 456 and 457 of Wade onAdministrative Law (8th edition) held that “Nevertheless there mustappear to be a real likelihood of bias. Surmise or conjecture is notenough. There must be circumstances from which a reasonable manwould think it likely or probable that the justice, or chairman, as thecase may be, would or did favour one side unfairly at the expense ofthe other. The Court will not inquire whether he did, in fact, favour oneside unfairly. Suffice it that reasonable people might think he did. Thereason is plain enough. Justice must be rooted in confidence andconfidence is destroyed when right minded people go away thinking 580the Judge was biased. “Wade further states that the aforesaiddecision reasserted” justice must be done’ as the operative principle.
The petitioners allege that a clear and demonstrable likelihood ofbias can be inferred from the surreptitious conduct of the respondentBanks’ Senior Representatives and the Commissioner of Labour.
The petitioners accept that up to date they are unaware of the fulland/or actual extent of discussion the Banks’ CEO and Mr. AnuraSilva the witness had with the Commissioner of Labour on
However, from the inquiring Officers reactionimmediately thereafter which became evident, inter alia from the 590inquiry being expedited, the petitioners allege that the obviousinference of bias needs to be drawn.
The petitioners have failed to point out any part of the order ofthe Commissioner which exhibits bias on the petitioner. Thepetitioners themselves accept that they are unaware of the actualextent of the discussion the Banks CEO and Mr. Anura Silva thewitness of the Bank had with the Commissioner of Labour on
Lord Denning in the aforesaid Judgment held that
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“Nevertheless there must be a real likelihood of bias. Surmise or
conjecture is not enough” Due to the aforesaid reasons and the
inability of the petitioners to point out in which manner there was biasin the order of the Commissioner, I am compelled to reject theallegation of bias on the part of the petitioners and thus hold that theCommissioner was not biased in the delivery of his order.
Total lack of Bona tides on the part of the respondent Bank FlagrantViolation of the terms and conditions of the Collective Agreements
This complaint of the petitioner is applicable only to the cases ofthe “Support Staff” and “clerical staff” employees since the“Managerial Staff employees are not parties to any CollectiveAgreements with the aforesaid 2 Banks. The respondent Banksclearly state in their applications for termination that it is, inter alia, theintroduction of new Technology that has prompted the bank to treatthe petitioners as surplus employees.
SCGB has expressly agreed at clauses 7 and 8 of the schedule2 of the Collective Agreement dated 26.07.2001 (p 385 of the CA.1070/03 Brief) read with clause 24 of the main agreement, that it willnot retrench staff who become redundant as a result of theintroduction of new technology. SCB too has agreed to be bound onvery similar terms in the Collective Agreement dated 15.5.2000(Clause 29 of the Agreement at page 413 read together with clauses7 and 8 of the 3rd Schedule to the said Agreement at pages 426 and427 of the CA. 1070/03 Brief). Hence the petitioners entertained alegitimate expectation that they would not be retrenched becausenew technology was being introduced. Mr. Baratha Gunawickrama,the witness who gave evidence on behalf of the employees inrespect of the inquiry into Application No. TE 82/2001 has stated atparagraph 16 of the affidavit submitted by him as evidence in chief(page 183 of CA. 1070/03 Brief), that inter alia, Frank Gamble, thethen CEO of SCGB (in March 2001), had categorically indicated tothe said employees that they would be re-trenched purely on avoluntary basis. The petitioners aver that the employees relied on theaforesaid representation made by the then CEO, and accordingly didnot seek alternative employment or pursue other avenues ofemployment, and have been severely prejudiced as a result of theviolation of the said undertaking. The petitioners submit that theBanks are estopped in law from acting contrary to the said holding
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■630
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out and/or from denying the same. The ‘TEW” (Special ProvisionsAct) deals with situations of “Non-disciplinary” termination. As statedby S.R. De Silva in “Legal Framework of Industrial relations inCeylon” at pages 501 and 502 it was held that “An employer has the 640right to bona fide retrench his employees, on the ground that suchemployees are redundant to his business. Such redundancy mayarise from the fact that the employer wishes to reorganise hisbusiness, either due to the losses sustained by him or even for thepurpose of enhancing his profits. Once the necessity forretrenchment is established, the employer is normally free to decideon the number of employees who would become surplus to hisrequirements. These principles have been established in a numberof decided cases.
In the case of Vishwamitra Press v Workers of Vishwamitra 650Press(6) where retrenchment was effected as a result ofreorganization of the Company’s business he states “It is the primafacie right of the Management to determine it’s labour force and theManagement would be the best Judge to determine the number ofworkmen who would become surplus on the ground ofrationalization, economy or other reasons on which retrenchmentcan be sustained.” It was also stated that in Ceylon these principleshave been enunciated in a number of cases and accepted.“Retrenchment is a right of the management and is a necessaryincident of an industry. So long as it is exercised bona fide, the 660employers’ decision should be accepted.” As stated at pages 316and 317 of “A commentary on the Industrial Disputes Act” by NigelHatch, retrenchment has been justified on the grounds of lossesoccasioned by strike and reorganization of a business due to losses.Retrenchment is also justified where it is consequent on the closureof a section of the business.”
In the present instance reorganization of the business was as aresult of the merger and integration of 2 banks which also resulted ina streamlining and introduction of new technologies and processes.
The original application for termination (P1 in 228/02, X1 in 1070/03 670
and 1080/03 categorically states that: “The integration of the
operations and staff of the two institutions has been coupled with astreamlining of the operational aspect of bpth institutions andintroduction of new technology …” Obviously, the integration and
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streamlining of operations have made an impact on manpowerlevels. For instance all divisions which independently functioned inthe 2 Banks earlier have now integrated which has consequentlyresulted in 2 divisions becoming a single division for the purposes ofoperations. In addition, technological developments have alsocontributed towards a reduced requirement in cadre levels. “As680
stated by Mr. Ravi Jayasekara in his affidavit of 07.01.2002 atparagraphs 10,11 and 12 there of appearing at page 42 of the briefin CA. 2282/02.
“10. Subsequent to the acquisition, SCB sought and receivedapproval from the Central Bank of Sri Lanka to integrate the hithertoseparate operations of the SCB and Grindlays Bank into a singleoperation.
Accordingly, the 2 Banks have now combined its operationsand technology platforms into one. During the integration processnew technologies and more efficient processes were introduced. 690
Subsequent to the integration of operations, functionscarried out previously by 2 Departments are now handled by oneDepartment …” The mechanics of the diminution and downsizingwas referred to in the application for termination dated 09. 11. 2001(P1) and the supporting affidavit of Mr. Ravi Jayasekera (page 42 ofthe brief) where he specifically states with reference to numbers,categories post that there was a downsizing due to the merger.
These were not effectively challenged. Hence this clearly reveals thatthe scope of the application before the Commissioner for terminationwas on the basis of the merger as well as excess due to streamlining. 700In accordance with section 2(4) of the ‘TEW” (Special Provisions)
Act, the employer has a right to retrench and the jurisdiction of theCommissioner is in respect of “non disciplinary terminations" i.e. forany reason whatsoever, otherwise than by reason of a punishmentimposed by way of disciplinary actions. For the foresaid reasons it ismy view that the Banks are not estopped from acting contrary to thesaid holding out as alleged by the petitioners.
The Employees were denied a full and fair hearing
The petitioners complain that although this Court made an orderin CA. Writ Application No. 1325/02 that the inquiry before the 710Commissioner of Labour should resume not later than 02.09.2002
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and be concluded before 30.11.2002, the 2nd respondent howevercommenced the inquiry on 17.09.2002 and concluded the same on
Thus the petitioners allege that the 2nd respondent byresuming the Inquiry 15 days after the specified date has unlawfullyand unjustly'limited the opportunities for the petitioners to fullypresent their case before the 2nd respondent. The petitioner alsocontend that the employees were prevented from summoningMr. Wasim Saifi the then CEO of SCGB as a witness by the 2ndrespondent in view of the unreasonable order made by the 2nd 720respondent, resulting in the rules of fairplay being flagrantly violatedby the 1st and/ or 2nd respondents.
Although the 2nd respondent commenced the Inquiry 15 daysafter 02.09.2002, the 2nd respondent concluded the Inquiry beforethe 30.11.2002, namely on 28.11.02, thus before the deadlineimposed by the Court of Appeal. It is unfair for the petitioners tocomplain that they were unable to fully present their case before the2nd respondent. The 2nd respondent had fixed the Inquiry fornumerous dates, and the learned President’s Counsel Mr. ShirleyFernando who appeared for the petitioners cross-examined the 730witness of the bank on 13 dates and Inquiry proper constitutednumerous dates during which occasions the 2nd respondentendeavoured to complete the Inquiry as expeditiously as possible,which he achieved by concluding the same on 28.11.2002.
It is significant to note that the very same Petitioners allegedbias by the 2nd respondent on the basis that Mr. Wasin Saifi and thewitness for the Banks Mr. Anura Silva met the Commissioner ofLabour on 30.05.2002 without any of the petitioners' representativesbeing present and without their own counsel being present.
No established rational or logical methods have been adopted 740by the banks when they purported to identify the petitioners forRetrenchment.
With regard to the above complaint of the petitioners, in each ofthe cases namely CA. 228/02, CA. 1070/03 and 1080/03 thenumbers which were excess in each category of support staff,clerical staff and managerial Staff respectively, were clearly statedand the reasons for them being excess, also revealed. In all thecases the following issues were addressed in the evidence of the 3rd
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and 4th respondents.
Whether there was an excess of staff.750
If so how many persons were excess and in which categories.
How many persons had left voluntarily
How many persons remained excess thereafter.
For example in CA. 2282/02 which was in respect of SupportStaff, paragraphs 10 to 22 of Mr. Ravi Jayasekara appearing atpages 42 and 43 of the Brief are of significance. ,
He stated the following:
‘The Support Staff cadre in ‘SCB’ consists of Peons, Drivers,Technicians and Labourers.
The support staff cadre in the SCGB consist of peons, Drivers 760and Technicians. At the time of acquisition of Grindlays Bank bySCGB, SCB had a support staff of 23. SCB carried out its internaladministrative operations as an independent commercial Bank withthese 23 Support Staff. With the acquisition of Grindlays Bank, theSupport Staff Cadre increased from 23 to 68. The integration of the2 banks operations, introduction of new technology and streamliningof operations reduced the requirement for Staff in the “Support Staff’.
The reasons why some staff had to be retrenched was adverted to indetail, in respect of each of the categories at paragraphs 27 to 33 ofthe said Affidavit. Similar evidence appears in CA. 1070/03 in the 770Affidavit of Mr. Anura Silva, and in CA. 1080/03 too in the affidavit ofMr. Anura Silva, (page 6 of the brief of 1080/03).
Manner of Selection.
The manner in which such staff was selected was set out duringthe course of evidence.
Q. In Your evidence today you stated that the identification of theredundant staff was a complicated process?
Can you please explain ?
A. In respect of support staff we applied LIFO (“Last in first out”).
We could do that because the nature of these jobs was not 780complex. But in the case of the other jobs what we followedwas a professional selection process. The four steps were to
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decide the future combined organization structure and thendrawing up of personal specifications for each and every job.
Then for each of these jobs we identified suitable candidates,mostly current incumbents of those jobs. Then we conductedan interview which was done with a panel with representativesfrom SCB, SCBG, and an independent Human Resourcesperson. The objective was to find the best candidate for the job,and the ones who were not selected were identified as excess. 790(pages 157 and 158 of the brief in case No. 1080/03). Thusalthough the petitioners stated that the manner in whichselection was effected had not been stated, evidence had infact been led to the contrary. For example the followingevidence demonstrated the method in which Downsizing wasrevealed in evidence:
Q. Would you agree with me that in view of the merger operationthe management took certain decisions in relation to theoperational departments of the Bank?
A. Yes.8«>
,Q. There were some changes made?
A. Yes.
Q. One change was a decision made by the management todiscontinue the Internal Control Department?
A. Yes.
Q. And that was the department that you were functioning in atthat time?
A. Yes. (Pages 194 and 195 of 1080/03)
The need to chose one of 2 persons for a single position wasrevealed at pages 206, 207 and 208 of the Brief of 1080/03. It was 810:revealed that SCGB had a Compliance officer whilst SCB had asingle person (the head of legal) to handle the legal and Compliancefunctions.
Referring to the function of Compliance.
Q. Do you agree that it requires a person to have a goodknowledge of the laws?
A. Definitely.^
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Q. Consequent to the Merger exercise the Head of Legal also
took over as Head of Compliance?
A. Yes.820
Q. The Head of Legal . . . was functioning as Head of Legal at
SCB?
A. She was Head of legal and Compliance at SCB?
Q. And now she functions Head of Legal and Compliance for both
banks?
A. Yes.
The LIFO method of Selection
It was elicited during the course of the inquiry (as stated above)that in respect of Support staff, the “last in first out” (LIFO) methodhad been adopted in the selection of staff for retrenchment. In ssorespect of the other categories however, a Professional SelectionProcess was adopted in selecting the redundant staff in view of thefact that they were more senior and had more specialized functions.
This evidence was not effectively contradicted by the petitioners.
Although the Petitioners sought to contend that the LIFO systemshould have been followed in respect of all categories, it is wellestablished that in Sri Lanka there is no compulsion to follow the saidmethod on selecting persons for recruitment. Although this system isindeed adopted, the employer has a discretion to decide the methodof selection. This is however, different to the position in Indian Labour 840law where the LIFO systems has been statutorily recognized andincorporated into the Industrial Disputes Act of India. However InIndustrial Law – P.L. Malik (16th Edition) at page 1105, it is statedhowever, that even in the Indian law, there are many situations ofdeparture from this principle. “Departure from the ‘last come first go’rule is permissible on valid and justifiable grounds.” It was held by theSupreme Court of India “ that the employer may take into accountconsideration of efficiency and trustworthy character of the workmen,and if he is satisfied that a person with a long service is inefficient,unreliable or habitually irregular in the discharge of his duties he may 850be retrenched." ‘The Law of Dismissal” by Chakravarthi also speaksof departing from the LIFO rule in an appropriate case.
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In Sri Lanka there is no requirement for “LIFO” but therespondent Banks followed it out of prudence in CA. 2282/02 and inorder to establish it’s bona tides. Hence this complaint of thepetitioners is baseless as the respondents Banks established logicalmethods in identifying the petitioners for retrenchment.
The petitioner were not allocated anv work for over 1 year in acalculated bid to compel them to accept the VRS packages offeredto them.860
The petitioners complain that the 3rd and 4th respondentsillegally and unlawfully transferred the petitioners to a common poolwhere they were not allocated any work but were only paid theirmonthly salaries. The petitioners allege that the “caging” of theseemployees took place over a year prior to the conclusion of theinquiries pending before the 1 st respondent (i. e. on or about January2002) and therefore, the said illegal transfers were effected duringthe course of the inquiry into the applications made for thetermination of the petitioners’ services. It was submitted that whilstnot allocating any work to the petitioners, the 3rd and 4th respondent 870Banks outsourced the services of 136 Personnel to carry out thework previously carried on by some of the petitioners. The said illegaltransfers were brought to the notice of the Banks, and the Bankswere requested to desist from doing so and to recall all employeeswho had already been sent on special leave. (Document marked“E11” with the petition in CA. 1070/03 at page 435 of the brief). Thepetitioners allege that the said transfers were effected by the banksto isolate, frustrate and demoralize the petitioners thereby weakeningtheir resolve to resist the aforesaid wrongful and unlawful actions aswell as to compel the petitioners to accept the Voluntary Retirement 880Scheme (VRS) packages and retire. The petitioners averred thatapart from being totally wrongful, unlawful and illegal, the said acts ofthe banks are similar to a situation of ‘non employment’ ascontemplated by the TEW (Special Provisions) Act, but does notconstitute ‘Non-employment’ because the said employees were paidtheir salaries.
A similar course of action which was followed by the 3rd and 4threspondents Indian counterparts, has been held by the IndianIndustrial Tribunal (Mumbai) to be illegal. The aforesaid decision hasbeen upheld by the High Court of Mumbai, India. (Document 890
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annexed “Z1” and “Z2” with the Petition in C.A. Application No. 9001070/03).
It is only after excess staff were identified and after a formalapplication had been made to the Commissioner by the 3rd and 4threspondents in terms of the law for approval to terminate thesepersons, whilst all the time paying their salaries, that some of thepetitioners were sent to a different department. All these persons whowere said to the “caged” were paid their full salary and received allbenefits during this period. At the conclusion of the inquiry andconsequent to the Commissioner's order for compensation (whichwas the highest ever award in the annals of Labour Law in the 910country as stated by the Commissioner in his objections) the 3rd and4th respondents immediately deposited the same with theCommissioner. There was absolutely no attempt to avoid reparatingthese persons, and steps had been taken in terms of the applicablelaw. (Unlike in the Indian case) to terminate them lawfully. The saidIndian Judgment may be clearly distinguished on the facts, as in thatcase the employees were transferred to a different location,arbitrarily, and no further action taken to terminate them legally.Hence the Indian Judgment referred to is irrelevant anddistinguished, and has no bearing whatsoever to the present 920Application. Moreover the provisions of law available under the‘TEW” (Special Provisions Act) which had been invoked in case ofthe 3rd and 4th Respondents, were not available in the Indian case.
Although the petitioners sought to contend that there was‘outsourcing’ no valid evidence had been led in respect thereof,except for a list of names tendered by the petitioners which theyfailed to substantiate. The petitioners were not compelled to acceptthe Voluntary Retirement Scheme (VRS) packages offered to them.
For the aforesaid reasons this complaint of the petitioners is also nottenable.930
Necessary Inferences and Material Evidence Disregarded.
The petitioners state that the 2nd respondent has arrived at theconclusion that Support Staff employees will find it more difficult tofind jobs than the Clerical or Managerial staff employees andtherefore have been offered a better “VRS” package than the othercategories of staff on mere conjecture and without any proper
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evidence to support the same (para 24 of the report at page 11) The2nd respondent has given undue and unwarranted weightage to thenumber of employees in the other categories who have accepted the‘VRS’ packages and left, when the same is not in any manner, a 940material consideration for the determination of issues raised beforehim, especially as the majority of the Clerical Staff employees (ie 24^out of 40) amounting to 60% of the total sought to be retrenched havenot accepted the ‘VRS’ packages. The petitioners submit that the 2ndrespondent has interposed his own personal views whilstdetermining this matter which is evident from the contents relating toglobalization etc. as enumerated by him in the said report which arenot matters that are based on any firm evidence.
The aforesaid inferences are decisions, views and observationswhich he 2nd respondent arrived at, which relate to his ‘absolute 950discretion’ being incidental matters – and in my view is an expressionof his views although he has considered the material evidencecompletely and drawn inferences accordingly which are correct.
Compensation awarded to the Petitioners – wholly inadequate.
The petitioners allege that the compensation awarded to thepetitioners by the 1st respondent is totally inadequate, and thatsevere disparities were apparent in the compensation packagesawarded to the several categories of petitioners. The petitioners statethat although the Banks boast that the highest compensationpackages were awarded in respect of these employees, relevant 960criteria when calculating the compensation payable to eachemployee had not been taken into account by the Commissioner oflabour. The petitioners contend that the inadequacies and disparitiesof the compensation awarded by the 1st respondent to thepetitioners are evident by the following factual examples pertaining to3 of the employees/ petitioners in the 3 separate staff categories.
NameCategory/PeriodCompensation Outstanding
of service
awarded
Home Loan
Y.G.RodrigoManageria/19 years
B.R.RanasingheClerical/10 years
K.K.D.KahaduwaSupport/6 years
Rs. 1.2.Million
Rs. 660,000/-Rs. 510,000/-
Rs. 1.4 Million
Rs. 560,000/-
Rs. 470,000/-
970
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Accordingly at the conclusion of 19 years of serviceMr. Y. G. Rodrigo of the Managerial Staff catergory would not receivethe benefit of the compensation awarded to him since his outstandingHome Loan clearly exceeds the compensation awarded and thereforehe will have to repay the bank a sum of Rs. 2 Million. At the conclusionof 10 years of service Mr. B.R. Ranasinghe would receive only a sumof Rs. 100,000/- after he settles the outstanding Home loan with thebank. At the conclusion of 6 years of service Mr. K.K.D. Kahaduwa ofthe support Staff category would receive a sum of Rs. 40,000/- after 980he settles the outstanding Home loan with the Bank. Under thesecircumstances the petitioners submit that they are entitled to thesubstantive reliefs prayed for in the respective petitions.
Very significantly the entire case of the petitioners and the Unionwhich represented them, and the evidence before the Commissionerof Labour at the inquiry, was entirely presented on the basis that whatthe Petitioners wanted was enhanced compensation. It transpiresthat the Commissioner had reasonably acted on the thrust of theUnion case which is for the grant of compensation and he has heldthat due to the merging of 2 entities, and also due to the enhancing 990of technology that there has been a diminution of the actual need forcadres, that he should not therefore deny permission to terminate,and that he should order compensation as contemplated by the Act.
There are several authorities which hold that the Commissioner neednot grant reinstatement and that the he can award compensationunder the “TEW” (Special Provisions) Act. The affidavit ofMr. Baratha Gnanawickrema President of the Branch Union of theCeylon Bank Employees Union in his affidavit filed at page 349 inCA. 2282/02 states as follows. “Without prejudice of what I havestated objecting to the grant of approval by the Commissioner of 1000Labour, I state that the only reasonable relief that should be grantedin the circumstances of this case is salary and other benefits whichthe employees would earn up to the age of retirement.
The Only Reasonable Relief
This is substantiated by the fact that Baratha Gnanawickremastates that compensation is the “only reasonable relief that should begranted in the circumstances of the case”. Sudheera Wijatilleke andBaratha Gnanawickrema were office bearers of the Union. None ofthe affected workmen gave evidence nor claimed reinstatement. The
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aforesaid 2 Office bearers of the Union obviously coordinated to give *.cicevidence in order to make a case out for compensation for allworkmen as they in their capacity as Office bearers of the Unionwould be best equipped to comment upon the financial issues in apost terminal situation.
In this case some positions of the employees retrenched are notlonger in existence, and the status quo cannot be resumed. Therewill be utter disaster and mayhem if the workmen claim a return towork.
Another important issues is what would happen to the largeamount of monies that have been taken by the employees on the 1020basis that their services were terminated. The Gratuity Act (section 5)enables the payment of gratuity upon the existence of a terminalsituation. The compensation granted is absolutely in excess of thatformulated by the State in the published compensation formula andis the highest award made.
I am of the view that the Commissioner has correctly identifiedthe issues, has analysed the relevant facts in relation to theredundant staff, has come to a correct finding with regard to theiridentification, made orders dated 27.03.2003 having evaluated theevidence based on relevant principles properly, and hence I see no 1030:reason to interfere with the orders of the 2nd respondent dated
For the aforesaid reasons, I refuse the Writ ApplicationsCA. 1070/03, CA. 1080/03 and CA. 2282/02, which are dismissedwithout costs.
SRISKANDARAJAH, J. – I agree.
Application dismissed.