047-NLR-NLR-V-74-N.-S.-A.-GAFFOOR-Appellant-and-O.-DE-ALMEIDA-Respondent.pdf
164
H. N. O. FERNANDO, C. J.—Ounasekera v- Percra
1971Present : Weeramrintry, J.
N. S. A. GAFFOOR, Appellant, and O. DE ALMEIDA,RespondentS. C. OljGO—Labour Tribunal Case No. S1169-59
Industrial Disputes Act (Cap. 131)—Section IS—Scope of the definition of term“employer"—Partnership as employer—Effect of the introduction of a newpartner—Joint liability of partners.
Tho respondent onterod tho sorvico of an ostato in 1940 os Superintendenton the basis that his employers u-oro carrying on tho business of miming thoestate ns pnrtnors. Tho present appellant bocama a shareholder of the businoseon 8th Novombor 1960 and informod tho respondent tli.it ho, tho appellant,
1 (1031) 51 xY. L. It. 2S2.> (191C) 19 xY. L. It. 2S9.
WEERAMAXXUY, J.—UuJJoor v. be Atmedai
105
had from (hnt day “ taken over 1)10 management of the estnto ” nnd wouldbo driectly responsible to iho other shareholders. Ho also fissured' thorespondent that lio would seo that J1 is interests us •Superintendent- were conserved“ fnirJy and squarely ” and called upon him to follow his directions on all matters.The services of the respondent ns Superintendent were subsequently terminatedby tho appellant in 1962.
In tho present proceedings instituted by the respondent-against the appellantulono for tho payment of certain sums ns compensation in respect of terminationof services, gratuity and provident fund benefits—
Held, (i) that whore, acting (expressly or impliedly) on behalf of tho otherpartners, ono of tho partners of a partnership employs a workman, tho formerfalls within tho definition of tho term “ employer V in section -IS of tho IndustrialDisputes Act. Accordingly, nil hough tho appellant owned only 11 fractionalshare of tho partnership business, flio respondent was entitled to look to theappollant alone ns his employer.
(ii) that the appellant- was liable not only for t-lio period between I960 and1963, but also for the period prior to I960. There was an implied assumptionby f-lio new partnership of tho liability of the old partnership towards therespondent in regard to tho earlier period of service. .Moreover tho appellant’sundertaking to conserve the respondent's rights would appear to bo an express-assumption of liability in respect- of obligations already incurred towards therespondent.
Held further, that under the rule of joint liability of partners the respondentwas entitled to choose the. appellant- nlono against whom to enforce his claim.
PPEAL from an order of a Labour Tribunal.
M.Tiruchelvam, Q.G., trill) S. 'Pontitinibahiin and K. Kaitag-Iswarait,for the employer-appellant.
P. Vimalachan Ihirct 11. with Nihol K. _■)/. Per era, for l-he applicant-respondent.
Our. adv. vuU.
January 16. 1971. Weerianthy, J.—
This appeal is against an order requiring tho appellant to pay to therespondent certain sums as compensation in respect of termination ofservices, gratuity and provident fund benefits.
The. respondent was employed since 1946 as Superintendent ofUdukehe Estate, Polgahawela-, upon a letter of appointment A3 of 24thMarch 1946 by which he was promised inter alia' a Provident Fundcontribution of 15% and, in the event of termination of services as aresult of changes of management- or otherwise, a pajrment of two months’salary for every year of service and a reasonable compensation for lossof career. This estate was owned by several persons at the time of hisappointment and the correspondence between the employers and the
166
VYEERAMAIsTRY, J.—Oaffoor v. Da Almeida
employee at the time would appear to indicate that the co-owners of theestate represented to the respondent that they were carrying on thebusiness of running the estate as partners. Thus the letter A3 spokeof one of the owners as the Managing Partner and the letter A5 bj' whichthis Managing Partner confirmed his appointment on 23rd August 1946said that all partners had agreed to abide by the conditions and term3laid down in his letter of appointment.
It is clear from these documents that when the- respondent enteredthe service of the estate he did so on the basis that his employers werecarrying on the estate as partners.
The present appellant came into the picture on 8th November I960consequent upon a purchase by him of a one-third of two-fifths share.B}' his letter A1 he informed the respondent that lie, the appellant, hadfrom that day “ taken over the management of this estate”. By thesame letter he indicated to the respondent that he, the appellant, shouldbe considered for the purpose of management as the one shareholderof the estate who would be directly responsible to the other shareholders.He also went on to assure the respondent that he would see that hisinterests as Superintendent were conserved “ fairly and squarely ” andcalled upon him to follow his directions on all matters. The servicesof the Superintendent were terminated in 1962 and it is from thattermination that these proceedings have arisen.
The point is now taken on behalf of the appellant that he is only aco-owner in respect of a small fractional share and that these proceedingscannot be maintained against him alone nor any order made againsthim alone. It is submitted further that in any event no order can hemade against him in respect of the period of service of the respondentprior to 1960. I
I would commence by referring to the definition of the term■’ employer ’’ in section 4S cf the Ordinance. As defined in section48 of the Ordinance empkyer ” includes " any person who on behalfof any other person employs any workman If. therefore, the appel-lant- was acting on behalf of the other co-owners or partners, whicheverthe case may be, in employing or continuing the employment of therespondent, he would fall within the definition of employer as containedin the Act.
It has been stated that it would not bo just and equitable to make anorder against a person who is a co-owner or a partner inasmuch as thesanctions attaching to the order could not fairly be said to attach to aperson who lias only such a fractional interest. On this point, however.
I would observe that the. co-owncr or partner who is so rendered liablemay have rights of contribution ngainst other co-owners or partnerswho have so permitted him to act or held him out ns their agent whetherexpressly or impliedly, but that as far ns the present Act is concerned therespondent woidd be entitled to look to the appellant as the employerwithin the definition contained in the Act.
S EERAJUyi'JtV, J.—OaJJoor o. De Almcidn
167
A distinction mud' bo mode between tlie* liability of flie appellant forihe period prior to 10(10 and (ho period between 1900 and 1903. Inregard to (he lai tor period J think that on the principle of implied contractor implied agency the appellant was acting for his co-owners or co-partnersand there* is no question hub that liability must attach to him. In factso much was in effect conceded by learned Queen's Counsel appearing forhim.*■
On the other hand in regard to the earlier period, we have this difficulty,that the appellant whether co partner or co-owner, acquired this statusonly in I960 and would not ordinarily have incurred liability to payterminal benefits in respect of (lie- 1.4 years of service which preceded hisacquisition of ail interest in the estate: Thu first circumstance, however,which would appear to support the respondent in attaching liability tothe appellant is the appellant’s onn letter A1 wherein he assures therespondent that lie will sec that his interests as Superintendent arcconserved ‘‘fairly and squarely”. This sentence has been understoodby the President to mean that the appellant was thereby assuring therespondent that if ho served as suggested in the letter, the rights that hadalready accrued to him in respect of his previous service {would beconserved. It is nob ^possible for me to say that the President hasmisconstrued this letter and I see no ground to hold that the letter meant
otherwise.
-Moreover, as the President has observed, the applicant continued asSuperintendent without termination of services and payment of terminalbenefits, and this assumption of a continuance of services rather than atermination followed by a fresh contract seems to be the basis on whichboth jiffies proceeded. Had there in fact been a- termination therewould have been rights which the respondent- could have directly assertedin terms of A3.
It has been urged again that where there is a partnership and thereis a change in the composition of the partnership by the introductionof a new member, the old partnership comes to an end and a. newpartnership arises in law. It has been submitted on behalf of theappellant- that this new partnership would not be responsible for t-Jieliabilities of the old partnership unless such liabilities have been takenover. Sucli taking over of liabilities may however be express or impliedand (he circumstances of the present case, having regard to thecontinuance of the services of the respondent without termination ofhis services under the old partnership and without payment of anyretirement benefits at such time, would appear to be suggestive of animplied assumption by the new partnership of the liability of the oldpartnership towards the respondent in regard to his earlier period ofservice1. Moreover the appellant’s letter A1 wherein he undertakesresponsibility for conserving the respondent’s rights would appear to bean express assumption of liability in respect of obligations already.incurred towards the respondent.
1 IAndlty, 12th cd. p. 323.
168
WEERAMAXTR Y, J.—GaJJoor v. De Almeida
If in fact the business were not a partnership business but was aeo-ownership in regard to the estate, then by one person becoming aco-owner lie does not take over the liability of the former owners inregard to the entire property. However, having regard to the documentsto which I have already referred wherein the basis on which the respondentwas employed was that he was serving a partnership and having regard tothe fact that at the time the appellant acquired an interest in this estateno contrary intimation was given to the respondent, I think it would be areasonable inference that it was as an employee of a partnership that theappellant continued his services after the appellant acquired his interestsin the business. The decision whether the business in question is carriedon in partnership or co-ownership is a mixed question of fact and law.In so far ns questions of fact are concerned the President's findings havebeen readied after very careful consideration and even if such questionsivcre appealable, I would see no reason to interfere with them, and in so faras questions of law are involved the President inis guided himself bycorrect legal principles regarding the differences between co-ownershipand partnership. I do not consider therefore that any sufficientreason lias been made out to justify this court in departing from thePresident’s findings.
It has been urged on behalf of the respondent that there is on the partof partners a joint liability and therefore that in the ease of partnershipit would be permissible for an employee having claims against all thepartners to choose anyone of them against whom to enforce his claim.In support of this contention Jie has cited Charlesworth on MercantileLaw1. On an application of this principle in any event if the respondenthad a claim against all the partners, he could decide to make that claimagainst the appellant alone as one of them. This is in consequence ofthe notion of joint liability in English law by which each of the personsjointly liable is liable to the entire extent of the claim.
– Had the relationship between the owners been one of co-ownership,there may have been substance in the submission of learned counsel forthe appellant that the claim would be exigible against one co-owneronly pro rain and that one co-owner could not be sued in regard to theentirely, in consequence of the difference between the Roman-Dutchconcept of joint liability and the English concept. However, it is notnecessary to go into this matter further in view of the finding of thePresident, which I accept, that the relationship here was one of partner-ship rather than co-ownership.
;• For these reasons 1 consider that no ground has been made outfor an}-interference with the order of the President, and T dismiss this appealwith costs.
Appeal dismissed.
1 9th td. p. 249.