005-SLLR-SLLR-1996-V-2-KUSUMAWATHIE-AND-OTHERS-v.-AITKEN-SPENCE-CO.-LTD.-AND-ANOTHER.pdf
KUSUMAWATHIE AND OTHERS
V.
AITKEN SPENCE & CO., LTD. AND ANOTHER
COURT OF APPEAL
S.N. SILVA, J.
C.A. 895/8529 JUNE, 1990,
12 FEBRUARY, 1992,
16 MARCH, 19927 AUGUST, 1991,
26 AUGUST, 1991,
25 SEPTEMBER, 1991.
Termination of Employment of Workmen (Special Provisions) Act No. 45 of1971 ,-S2(1 ),S2(2)d, S2(2) (e), S5, S12 (1)e, S17, An application to termi-nate the employment – Inquiry – Commissioner granted approval – Fail-ure to give reasons for decision – Does it violate the principles of NaturalJustice. – Rule 52 of the Supreme Court Rules.
The 1st Respondent Company made an application in terms of S.2 of Act45 of 1971 seeking approval of the Commissioner of Labour to terminatethe employment of the 16 Petitioners. Pursuant to the application an in-quiry was held. The Commissioner by the impugned decision granted hisapproval to the termination of Employment of the Petitioners. The Petition-ers challenged the decision on the single ground that it violates the princi-ples of Natural Justice in that the Commissioner has failed to give rea-sons for his decision.
It was conceded that in the statutory scheme set out, under Act 45 of 1971the Commissioner is required only to give notice in writing of his decision.
The issue that arose, was whether in the absence of a specific statutoryrequirement to give reasons the Commissioner has to communicate hisreasons in compliance with the principles of natural justice.
Held:
In the absence of a Statutory requirement to give reasons for decisions or astatutory appeal from a decision, there is no requirement of Common Law orthe principles of Natural Justice that a Tribunal or an administrative Authorityshould give reasons for its decision, even if such decision has been made inthe exercise of a statutory discretion and may adversely affect the interests orthe legitimate or reasonable expectations of other persons.
Per Silva, J.
“The finding that there is no requirement in law to give reasons should notbe construed as a gateway to arbitrary decisions and orders. If a decisionthat is challenged is not a speaking order, when notice is issued by aCourt exercising judicial review, reasons to support it have to be disclosed.Rule 52 of the SC Rules 1978- is intended to afford an opportunity to theRespondents for this purpose; the reasons thus disclosed form part of therecord and are in themselves subject to review. Thus if the Commissionerfails to disclose his reasons to Court exercising judicial review, an infer-ence may will be drawn that the impugned decision is ultra vires and reliefgranted on this basis".
AN APPLICATION for a Writ of Certiorari.
Cases referred to :
Siemens Engineering & Manufacturing Co. Ltd., v. The Union ofIndia – 1976 AIR (SC) 1785.
Maneka Gandhi v. The Union of India 1978 AIR (SC) 597.
Norton Tool Co., Ltd., v. Tewson – (1973) 1 WLR 45.
Alexander Macinary Ltd., v. Crabtree (1974) ICR 120 at 122
R v. Immigration Appeal Tribunal ex-parte, Khan – 1983 Queen's BenchDivision 790.
R v. Secretary of State for Social Services ex-parte Connolly,
1986 1 WLR 421 at 431.
Public Service Board of New South Wales v. Osmond (1985-1986)
159 Commonwealth Law Reports 657.
Wimalaganna v. Weligoda CA 499/83 (F) C.A.M. 15.05.1991.
Wijerama v. Paul 76 NLR 241.
Brook Bond (Ceylon) Ltd., v. Tea, Rubber, Coconut and General Produce
Workers Union-77 NLR 6.
K.S.de Silva v. National Water Supply and Drainage Board (1989) 2 SLR 1.
Ratnayake v. Fernando SC 52/1986 S.C.M. 20.05.1991.
Samarasinghe v. De Mel 1982-1 SLR 123 at 128
Padfield v. Minister of Agriculture 1968 AC 997.
R.v. Lancashire County Council, ex-parte Huddleston (1986) 2 All. E.R941 at 945.
Gomin Dayasih for Petitioners.
M.A. Bastian for the 1 st Respondent.
K. Sripavan, S.S.C. for the 2nd Respondent.
Cur. adv. vult.
May 29, 1992S.N. SILVA, J.
Petitioners have filed this application for a Writ of Certiorari to quashthe decision dated 14-03-1985 (LI) made by the 3rd Respondent (Com-missioner of Labour).
The 1 st Respondent Company made an application in terms of sec-tion 2 of the Termination of Employment of Workmen (Special Provi-sions) Act No. 45 of 1971, seeking approval of the Commissioner ofLabour to terminate the employment of the 16 Petitioners. They wereemployed by the Company as unskilled labourers in the Industrial Prod-ucts Division manufacturing adhesives and disinfectants. According tothe application for approval the division in which the Petitioners wereemployed was being closed down due to large losses incurred andproduction becoming uneconomic.
Pursuant to the application, an inquiry was held by an AssistantCommissioner of Labour. Petitioners were represented by their Unionand both parties filed affidavits. Subsequently witnesses were cross-examined and written submissions tendered. The Union did not con-test the fact that production had become uneconomic but claimed thatthe Petitioners could be employed in another section of the Company.The Company took up the position that the Petitioners were given workin two other divisions, despatch section and the printing department,but were found unsuitable and that there is no other section in theCompany where unskilled female workers could be employed. Com-missioner by the impugned decision granted his approval to the termi-nation of employment of the Petitioners subject to the payment of com-pensation being the equivalent of three months wages. Learned Coun-sel for the Petitioners challenged the decision on the single groundthat it violates the principles of natural justice, in that the Commis-sioner has failed to give reasons for his decision. Written submissionswere tendered by Counsel for the Petitioners and for the 1st and 2ndRespondents only on the aspect whether the decision *L1' could bequashed on the ground that no reasons were given for it by the Com-missioner.
Section 2(1) of the Termination of Employment of workmen (SpecialProvisions) Act. No.45of1971 prohibits the termination of scheduledemployment of any workman except with the prior consent in writing of
the workman or the prior written approval of the Commissioner. In termsof section 5, termination of employment in contravention of this prohi-bition is null and void. Section 12(1) (e) empowers the Commissionerto hold such inquiry, as he may consider necessary, for the purposesof the Act. Section 17 provides that proceedings at any inquiry held bythe Commissioner for the purposes of the Act may be conducted bythe Commissioner "in any manner, not inconsistent with the principlesof natural justice". Section 2 (2) (e) empowers the Com-
missioner to decide in his absolute discretion the terms and condi-tions subject to which his approval is granted. Section 2 (2) (d) re-quires the Commissioner to give notice in writing of his decision on theapplication, to the employer and the workman.
It is conceded by learned Counsel for the Petitioners that in thestatutory scheme, set out above, the Commissioner is required only togive notice in writing of his decision. Learned Counsel for the Respond-ents submitted that the letter “ L1", whereby the decision of the Com-missioner granting approval for termination subject to the payment ofcompensation, was notified, is sufficient compliance with the statutoryrequirement in section 2 (2) (d). Learned Counsel for the Petitionersthen contended that although order "L1" may be sufficient compliancewith the provision referred to, the basic requirement that the Commis-sioner should comply with the principles of natural justice, makes itnecessary that reasons be given in support of that decision. Therefore,the issue that arises on the submissions "is whether, in the absenceof a specific statutory requirement to give reasons the Commissionerhas to communicate his reasons in compliance with the principles ofnatural justice."
Learned Counsel for the Petitioners relied heavily on the two judge-ments of Justice Bhagwati, who later became the Chief Justice of In-dia, in the cases of Siemens Engineering & Manufacturing Co., Ltd. vThe Union of lndiam and Maneka Gandhi v The Union of India <2>. Inthe former case (at page 1789) Justice Bhagwati observed as follows:
"It is now settled law that where an authority makes an order inexercise of a quasi-judicial function, it must record its reasons insupport of the order it makes. Every quasi-judicial order must besupported by reasons.”
It is to be noted that the foregoing citation from Justice Bhagwati'sjudgment, which is not preceded by any discussion as to the basis onwhich the observation is made, supports a general proposition that aquasi judicial order must be based on reasons. In that case anorder of an Assistant Controller of Customs imposing a differential duty,on some items in respect of which duty had already been paid, wasstruck down by the Supreme Court on the basis that it is unjusti-fied. Similarly, the orders made in appeal confirming the duty werealso struck down. It is clear on a perusal of the judgement that theSupreme Court examined the legality of the imposition of duty andfound that in law there was no basis for it. Thus the failure to givereasons was not the basis on which relief was granted. The cita-tion cannot therefore be regarded as the ratio of the decision. In anyevent, it does not postulate that reasons should be communicatedto the party affected by the decision, as contended for by learnedCounsel for the Petitioners.
In the Maneka Gandhi case (supra) an order impounding the pass-port of the Petitioner was challenged primarily on the basis that it wasmade without a hearing granted to the Petitioner. It was conceded bythe Respondents that no hearing was granted to the Petitionerprior to the order being made. In the course of his judgment JusticeBhagwati (at p630) stated that the Central Government was whollyunjustified in impounding the passport and declining to furnish to thePetitioner the reasons for such impounding although a requestwas made for such reasons. However, it is clear on a perusal of thejudgments in the case that the basis of the majority decision is thealleged failure on the part of the authorities to give a hearing tothe Petitioner before the order of impounding was made. It washeld that an inquiry in compliance with the principles of natural justicewas implicit in the power given to impound passports for the publicgood. The majority of the Judges, including Justice Bhagwati, did notissue a Writ of Certiorari to quash the impugned order in view of anundertaking given by the authorities to afford the Petitioner a hearing.Hence this judgment too is not authority for the proposition that anorder subject to judicial review can be quashed solely on the basis thatthe reasons for it were not communicated to the person affected bythat order.
Learned Counsel for the Petitioners also relied on two judgments ofSir John Donaldson, in the cases of, Norton Tool Co, Ltd. v Tewson(3)and Alexandar Macinary Ltd. v Crabtree(4) in support of the propositionthat there is an implied duty to state the reasons or grounds for adecision. In these two cases Sir John Donaldson, sitting as the Presi-dent of the National Industrial Relations Court whose jurisdiction islimited to appeals on questions of law, observed that the failure of thesubordinate Industrial Tribunal from whose order an appeal lay, to givereasons, was a denial of justice amounting to an error of law. Thesedecisions may be explained on the basis that section 12 of the Tribu-nals and Inquiries Act of 1958 amended by the Act of 1971, of theUnited Kingdom, which was applicable to the Tribunal from which theappeal was made, required it to furnish a statement of reasons eitherwritten or oral for the decision, if requested. The decisions are notbased on the premise that there is a general requirement of naturaljustice that reasons should be given for its decision by that Tribunal.Furthermore, it has to be noted that in a later case, R v ImmigrationAppeal Tribunal, ex parte, Khan (5). Lord Lane C.J. commenting onthese judgments observed (at p794) as follows:-
“Speaking for myself, I would not go so far as to endorse the propo-sition set forth by Sir John Donaldson that any failure to give rea-sons means a denial of justice and is itself an error of law."
Thus it is seen that the observation of Sir John Donaldson reliedupon by learned Counsel for the Petitioners is not authority for theproposition that in the United Kingdom the Common law or the princi-ples of natural justice as observed, require reasons to be given by aTribunal or an authority whose order is subject to judicial review.
On the question whether there is a requirement of common law orthe principles of natural justice that reasons should be given by a Tri-bunal or an authority for its decisions, learned Counsel for the Re-spondents have rightly relied upon certain passages from leading trea-tises on the subject of Administrative Law. In Administrative Law byH.W.R. Wade (1988) 6th Edition at P547 it is stated as follows:
“It has never been a principle of natural justice that reasons shouldbe given for decisions."
A similar opinion is stated in de Smith's Judicial Review of Adminis-trative Action, 4th Edition at P148:-
"There is no general rule of English law that reasons must begiven for administrative (or indeed judicial) decisions."
It is also to be noted that in the case of R v Secretary of State forSocial Services, ex parte Connolly<6), Slade LJ of the Court of Appeal,stated affirmatively that there is no basic requirement of natural justicethat reasons should always be given when a discretionary power isexercised.
Learned Counsel for the 1st Respondent also relied on the recentdecision of the High Court of Australia (being the highest Court of Ap-peal in that country) in the case of Public Service Board of New SouthWales v Osmond (7> . In that case a decision of the Public ServiceBoard of New South Wales was challenged in the Court of Appeal byan unsuccessful applicant for a promotion in the Public Service, interalia on the ground that no reasons were given by the Board for thatdecision. The Court of Appeal allowed the application and directed theBoard to give reasons for the decision. In appeal by the Board, theHigh Court set aside the judgement of the Court of Appeal. It was heldby the High Court upon an exhaustive analysis of the decisions inseveral jurisdictions that in the absence of a statutory requirement,there was no rule of common law and no principle of natural justice,requiring the Board to give reasons for its decisions, however desirableit might be thought that it should have done so. Gibbs C.J. stated hisfindings in the following terms (at page 662) :-
"There is no general rule of the common law, or principles of natu-ral justice, that requires reasons to be given for administrativedecisions, even decisions which have been made in the exerciseof a statutory discretion and which may adversely affect the inter-ests, or defeat the legitimate or reasonable expectations, of otherpersons."
It is thus to be seen that neither the common law nor principles ofnatural justice as observed in the many jurisdictions to which refer-ence has been made, require as a general rule, administrative tribu-
nals or authorities to give reasons for their decisions that are subjectto judicial review.
The requirement to give reasons appears to be more a developmentof statute law. In the United Kingdom a Committee presided by SirOliver Franks was commissioned in 1955 to inquire into inter alia, theexercise of discretion by Government Departments. This Committeerecommended the establishment of a Council on Tribunals. Some ofthe recommendations of the Committee were implemented by the Tri-bunals and Inquiries Act of 1958 amended by the Act of 1971. Section12 of the Act as amended requires the Tribunals listed in the Act, tofurnish a statement either written or oral, of the reasons for decisions,if requested. A failure to give reasons on request by such a tribunalmay be an error of law as held by Sir John Donaldson in the casesreferred above. American Federal Law has a comparable requirementin section 8 (b) of the Administrative Procedure Act, 1946. Similarlythe Australian Federal Law as stated in section 13 of the Administra-tive Decisions (Judicial Review) Act, 1977 requires reasons to be givenfor administrative decisions, on request.
In Sri Lanka there is no general enactment similar to the Statutesreferred above. Specific enactments such as section 34 (3) of the Ceil-ing on Housing Property Law No.1 of 1973 and section 23(5) of theLand Acquisition Act No, 9 of 1950 require reasons to be given byBoards of Review or Appeal, as the case may be. Article 13 (1) of theConstitution enshrines as a fundamental right that any person arrestedbe informed of the reason for his arrest.
The judgment of H.W.Senanayake, J in the case of Wimalaganna vWeligoda(8), relied upon by learned Counsel for the Petitioners relatesto the application of section 18 (2) of the Civil Procedure Code whichrequires a Court to give reasons for an order made upon an applicationfor addition of a party. This decision does not have any bearing on aprinciple of administrative law that reasons should be given by admin-istrative tribunals or authorities, as contended by learned Counsel forthe Petitioners. It is a reflection of the general trend of authority, asreferred above, that a failure to comply with a statutory requirement togive reasons may amount to an error of law vitiating the decision.
Learned Counsel for the Petitioners also relied on the judgement ofthe former Court of Appeal in the case of Wijerama v Paul(9) . Thatappeal involved a finding of guilt made by the Medical Council againsta Surgeon on a charge of infamous conduct. The Supreme Court on anapplication by the Surgeon quashed the finding of guilt on severalgrounds. In appeal the Court of Appeal held that several grounds reliedupon by the Supreme Court were not well founded. However, it washeld that the record did not disclose evidence to support the finding ofguilt made by the Medical Council. The Council held an inquiry andrecorded evidence but did not give its reasons for the finding. On thisaspect, Justice T.S. Fernando, President made the following observa-tions (at page 245) :-
“Section 18 (1) of the Ordinance renders every order or decision ofthe Medical Council subject to an appeal to the Minister (of Health)and the latter's decision is declared final. The exercise of the Minis-ter's power to decide an appeal would certainly be facilitated if he knowsthe reasons which led the Council to make the order or decision com-plained of. Even in the absence of a legal requirement, we think itdesirable that any tribunal against whose decision an appeal is avail-able should, as a general rule, state the reasons for its decision, acourse of action which has the merit of being both fair to the practi-tioner and complainant concerned and helpful to the appellate author-ity."
The foregoing observations made by the President of the Court ofAppeal is in accord with the English common law. As noted by H.W.R.Wade (supra) at P459 "Formal tribunals have an inherent duty to statetheir reasons, at any rate where there is a right of appeal of any kind."
In the case of Brook Bond (Ceylon) Ltd. v Tea, Rubber, Coconut andGeneral Produce Workers Union(10) the then Court of Appeal set asidean order of a Labour Tribunal giving relief to a workman and a judge-ment of the Supreme Court affirming that order, on the basis that therewere no findings made by the President of the Labour Tribunal as tothe disputed questions of fact. Sivasupramaniam, J (at page 9) statedas follows:-
"Where an appeal lies from the order of a tribunal to a higher Court,though the appeal may be only on a question of law, it is the duty ofthe tribunal to set down its findings on all disputed questions of factand to give reasons for its order. Questions of law must necessarily beconsidered in relation to the facts and it would be impossible for aCourt of Appeal to discharge its functions properly unless it has beforeit the findings of the original tribunal on the facts as well as its reasonsfor the order it has made."
In the case of K.S.de Silva v National Water Supply & DrainageBoard1"'1 the Supreme Court did not rule upon a submission that as a"general rule" there is no duty to state reasons for judicial or adminis-trative decisions. A point at issue in that appeal was whether this Courtshould give reasons when refusing to issue notice on Respondents inan application for a Writ of Mandamus. G.P.S. de Silva, J (as he thenwas), observed as follows (at P5) :-
"It is neither possible nor desirable to lay down a hard and fast ruleas to whether reasons need be given when the court refuses to issuenotice on the respondents. Much depends on the nature of the applica-tion, the remedy sought, the pleadings, the submissions made to theCourt, and other matters germane to the maintainability of the applica-tion."
In a later case the Supreme Court followed the observations madeby Sivasupramaniam, J in the Brook Bond case (supra). In the case ofRatnayake v Fernando(,2> Fernando, J. stated the law on this aspectas follows :-
"It is a general principle of law, recognised in the Brook BondCeylon Limited case, that whenever a right of appeal is given fromthe order of a tribunal, a duty to record findings and give reasonsis implied from the grant of such right of appeal."
Thus it is seen that the common law of this country has evolved soas to require every tribunal or administrative authority whose decisionis subject to a statutory right of appeal to give its reasons for suchdecision. Reasons have to contain findings on the disputed mattersthat are relevant to the decision. It is also seen that in the absence ofa statutory requirement to give reasons for decision or a statutory appealfrom a decision, as aforesaid, there is no requirement of common lawor the principles of natural justice, that a tribunal or an administrativeauthority should give reasons for its decision, even if such decisionhas been made in the exercise of a statutory discretion and may ad-versely affect the interests or the legitimate or reasonable expecta-tions of other persons.
As noted above section 2 (2) (b) empowers the Commissioner to"decide" to grant or refuse his approval to an application for termina-tion. Section 2 (2) (e) empowers him to "decide" the terms and condi-tions subject to which such approval is granted. Hence there is suffi-cient compliance with section 2 (2) (d) which requires him to give no-tice in writing of his "decision" to the parties, if he informs them whetherhis approval has been refused or granted and if so the terms and con-ditions subject to which it is granted. The letter "L1" is sufficient com-pliance with this requirement. There being no statutory requirement togive reasons and no provision for an appeal from the Commissioner'sdecision, the only ground of challenge advanced by the Petitioner hasto fail. However, I have to reiterate the observation made by Tambiah, Jten years ago in the case of Samarasinghe v De Mel(13) that it is in-deed desirable that reasons be given by the Commissioner for a deci-sion or an order made under the Termination of Employment of Work-men (Special Provisions) Act No. 45 of 1971 as amended. In an in-stance of non-disciplinary termination of employment, a proceedingbefore the Commissioner, either by way of an application for approvalof termination (section 2 (1)) or for relief in respect of illegal termination(section 6), takes place in substitution of a proceeding before a LabourTribunal under the Industrial Disputes Act. Therefore parties will havesufficient confidence in such proceedings before the Commissioneronly if reasons are given for the final decision or order.
The finding in the preceding section of this judgment that there is norequirement in law to give reasons should not be construed as a gate-way to arbitrary decisions and orders. If a decision that is challengedis not a "speaking order”, (carrying its reasons on its face), when no-tice is issued by a Court exercising judicial review, reasons to supportit have to be disclosed with notice to the Petitioner. Rule 52 of theSupreme Court Rules 1978, is intended to afford an opportunity to theRespondents for this purpose. The reasons thus disclosed form part ofthe record and are in themselves subject to review. In the well knowncase of Padfield v Minister of Agriculture(u) the Minister whose deci-sion (given without stating reasons) was challenged, furnished a state-ment of reasons to Court. These reasons were found to be bad in lawand the Petitioners were granted relief by an order of Mandamus. Inappeal, it was contended by the State, that since there is no require-ment to give reasons, the reasons that were furnished to court cannotbe attacked on the ground of an error of law. Lord Reid (at page 1032),Lord Pearce (at page 1053,1054), Lord Up John (at page 1061) madeclear observations that if there is prima facie material that the Ministerhas acted contrary to the intentions of Parliament in failing to takesteps as required by law, and no reasons are furnished to court by theMinister in his defence, the court will infer that the Minister had nogood reasons for the impugned action, in deciding the matter. Thus ifthe Commissioner fails to disclose his reasons to the court exercisingjudicial review, an inference may well be drawn that the impugned deci-sion is ultra vires and relief granted on this basis. In this regard I haveto also cite the observations made by Sir John Donaldson MR in thecase of R V Lancashire County Council, exparte Huddleston (15) (atpage 945)
"Counsel for the Council also contended that it may be an undesir-able practice to give full, or perhaps any, reasons to every Applicantwho is refused a discretionary grant, if only because this would belikely to lead to endless further arguments without giving the Applicanteither satisfaction or a grant. So be it. But in my judgement the posi-tion is quite different if and when the Applicant can satisfy a judge ofthe public law court that the facts disclosed by her are sufficient toentitle her to apply for judicial review of the decision. Then it becomesthe duty of the Respondent to make full and fair disclosure. Notwith-standing that the courts have for centuries exercised a limited supervi-sory jurisdiction by means of the prerogative writs, the wider remedy ofjudicial review and the evolution of what is, in effect, a specialist ad-ministrative or public law court is a post-war development. This devel-opment has created a new relationship between the courts and thosewho derive their authority from the public law, one of partnership basedon a common aim, namely the maintenance of the highest standardsof public administration."
Although the letter "L1" does not contain the reasons for the deci-sion the Commissioner has disclosed his reasons by way of an affida-vit to this Court. He has also annexed the recommendation made bythe Assistant Commissioner who held the inquiry. Upon a disclosureof this informaiton, learned Counsel for the Petitioner has not sought tochallenge the decision on any ground other than what has been statedabove.
In these circumstances I dismiss this application but make no orderfor costs.
Application dismissed.