BANK OF CEYLON
G.P.S. DE SILVA, C.J.,
KULATUNGA, J. ANDRAMANATHAN, J.
S.C. APPEAL NO. 90/94C.A. NO. 180/87L.T. NO. 4/4/M/5256
NOVEMBER 03 AND DECEMBER 15.1994.
Industrial Dispute – Termination of services during probation – Compensation.
The appellant was appointed as the sub-manager of the Bapk of Ceylon AgrarianService Centre Branch, Hakmana on 3 years probation extendable to 4 years andconfirmation was to be –
if his work was satisfactory
if he passed the proficiency examination in language and
if he passed the prescribed Bankers’ examination.
There were inquiries into alleged irregularities and his services were terminated.Held:
The justification for not reinstating the appellant was the fact that even after theexpiry of 4 years, he remained a probationer. He has not passed the requisiteBankers' Examination. He had subjected himself to a medical examination asrequired by his letter of appointment. He had been warned more than once. Hisreplies were brusque, if not rude. His letters were unhappily worded. There wasno justification to confirm him. Compensation could be awarded.
APPEAL from the judgment of the Court of Appeal.
Faisz Musthapha, P.C. with S. Jayawardena for petitioner on 3.11.94 andpetitioner in person on 15.12.94.
N. S. A. Gunatiiake with M. £ Wickramasinghe for respondent.
Cur. adv. vult.
The appellant was the Sub-Manager of the Bank of Ceylon,Agrarian Service Centre Branch, Hakmana. He was interdicted on
26.11.79 on half pay. On 04.06.80 a charge sheet was served on himalleging certain lapses by him in the discharge of his functions asSub-Manager. Subsequently a domestic inquiry was held and hisservices were terminated, by a letter dated 06.06.81.
Although the appellant’s services were so terminated on the basisof specific charges, the respondent (The Bank of Ceylon) in itsanswer as well as during the inquiry before the Labour Tribunal,stated its defence in more general terms namely, that the appellant’sservices were terminated while he was still under probation; that suchtermination was in the interest of the respondent and justified; andthat the appellant had a poor record of service.
The Labour Tribunal by its order dated 13.03.87 decided that interminating the appellant’s services, the management had not actedin good faith in that such termination was probably motivated byextraneous reasons; that the evidence did not reveal anymisappropriation or any dishonesty on the part of the appellant; thatthe appellant who had completed 4 years of service on 23.04.79should have been confirmed; and that the impugned termination wasunjustified, even if the appellant was a probationer. Accordingly, thetribunal ordered that the appellant be reinstated in employment witheffect from 15.04.87, with 2 1/2 years back wages or in the alternativethe appellant be paid compensation in a sum of Rs. 32,580/- being 3years salary computed on the basis of the last salary received by himviz., Rs. 905/-. The appellant, not being satisfied with the quantum ofcompensation, appealed to the Court of Appeal.
The Court of Appeal held that as the appellant was holding aposition of trust and confidence, reinstatement is not in the publicinterest or in the interest of the respondent, which handles publicfunds. However, the Court enhanced the compensation awarded bythe Labour Tribunal. The Court directed that the appellant be paid asum of Rs. 76,020/- being 7 years salary. The appellant appealed tothis Court. He was granted special leave to appeal only on thequestion of quantum of compensation, as an alternative toreinstatement. Special leave to appeal was refused on the question ofreinstatement.
On the second day of the hearing before this Court, the appellantappeared in person having revoked the proxy granted to his registeredAttorney. In the circumstances, learned President’s Counsel whorepresented the appellant on the firet day excused himself from furtherappearance. From the submissions made by the appellant, it appearedthat he was particularly aggrieved by the observation made by theCourt of Appeal that in view of the fact that the appellant held aposition of trust and confidence reinstatement was not in the interest ofthe respondent, which handled public funds. Presumably in view of thisgrievance, the appellant requested that he be permitted to makesubmissions including the question of reinstatement. The Courtpermitted him to make submissions on that matter. The Court alsoheard learned Counsel for the respondent in reply.
The Court was of the view that whilst the appellant’s grievancemerits consideration in deciding this appeal, it was not fair to callupon the respondent at that stage, to reply on the question ofreinstatement. Accordingly, the Court heard Counsel for therespondent only on the quantum of compensation. I shall now set outthe relevant facts.
The appellant commenced employment under the respondent on19.04.75 as a Staff Assistant Grade I, subject to a period of 3 yearsprobation which was liable to extension up to 4 years. The letter ofappointment P1 provided that he would be confirmed in service atthe end of such probation –
if his work is satisfactory;
if he has passed the proficiency examination in language;and
if he has passed the prescribed Bankers’ Examination.
If the appellant failed to so qualify for confirmation, he became liableto have his services terminated; alternatively his probationary periodwas deemed to have been automatically extended. P1 also requiredhim to submit himself forthwith to a medical examination by a medicalofficer nominated by the respondent. If at such examination, he wasfound unfit for service in the Bank, then also he became liable tohave his services terminated immediately.
By circular No. 74/77 (R27) the requirement of passing theBankers’ Examination for confirmation was relaxed to the extent that itprovided that after 4 years service, the bank may considerconfirmation of an officer who holds the position of Sub-Manager onthe basis of his service record, notwithstanding the failure to passsuch examination. If a Sub-Manager is so confirmed, his promotion tothe next higher grade will be dependent on his passing suchexamination.
As at the date of his interdiction on 26.11.79, the appellant had notbeen confirmed in his post and he was a probationer. He had notpassed the requisite Bankers’ Examination. On 18.10.77 the RegionalManager, Sabaragamuwa Region had warned him regarding thereturn of a postdated cheque (R33). On 30.01.79 the same RegionalManager, acting on the decision of a disciplinary committee, severelywarned the appellant for closing the Hakmana Branch at 11.30 a.m.on 23.02.78 (R31). The appellant replied on 06.02.79 stating that hewas not prepared to accept the warning. He said that he had to closethe bank on that day as he had to attend his brother’s wedding forwhich purpose he had not been granted leave, even though hisapplication for leave had been submitted a month before. Hethreatened to resign from his post and to make representations to theChairman. (R32).
On 22.02.79, the Regional Manager, Southern Region severelywarned the appellant for delaying to submit certain documents andfurther warned that disciplinary action may have to be taken in theevent of a recurrence of such neglect. (R35).
It would appear, that notwithstanding the above short-comings, themanagement had been considering the appellant's confirmation.According to the Regional Manager’s letter dated 08.05.79addressed to the appellant (the 3rd reminder on the subject) theappellant’s confirmation was held up as he had failed to forward themedical report required by the letter of appointment (R28). On19.06.79, the District Manager sent a 4th reminder to the appellant onthat subject (R30). The appellant replied by his undated letter (R9)that due to pressure of work, he had not been able to obtain amedical report. He added that he was working with a view to
improving his branch. If he could thereby increase its profits, hewould not mind the delay in his confirmation. He however, promised' to attend to the matter as soon as possible.
We next have a letter dated 06.06.79 by which the RegionalDirector, Galle, acting on the recommendation of the Deputy GeneralManager, Administration, severely reprimanded the appellant forengaging in lengthy correspondence with the Manager, MataraBranch, using discourteous language (R34).
It would appear that by November 1979 an investigation hadcommenced into alleged irregularities in the Hakmana Branch. Thisinvestigation was conducted by Ramachandra, Asst. Manager Bankof Ceylon, attached to the Inspection Department, pursuant to amemo dated 07.11.79 addressed by the Deputy General Manager,Finance to the Chief Inspector of Branches. In the course of thisinvestigation, the appellant made a statement to the District Manager,Matara on 14.11.79 wherein he admitted that he had delayedcollecting some cheques for one or two days. He explained that thiswas done to help good customers. He added that he had therebycontravened circulars. This he explained was done in the interest ofthe Hakmana Branch, which was a new bank and that he did notobtain any benefit from the said customers (R37).
On 13.11.79 the appellant addressed a letter to the ChiefInspector of Branches accepting responsibility for the conduct ofaffairs at the Hakmana Branch during the relevant period. Herequested the Chief Inspector to relieve his staff from blame in thatregard and to call for his explanation. (R38). Thereafter by letterdated 26.11.79 the appellant was interdicted, on the direction of theGeneral Manager (A7).
A7 states that the decision to interdict the appellant had beentaken after considering the report of investigations into allegedirregularities at the Hakmana Branch and that he was beinginterdicted, pending the framing of charges. There is no evidence asto what that report was. The only report produced in this case is thereport of Ramachandra, the inquiring officer, dated 21.01.80 (R1).Ramachandra, under cross-examination, was unable to say on what
material the bank interdicted the appellant. He, however, said that hehad completed the inquiry by the end of November although hisreport could have been delayed. The learned President of the LabourTribunal was of the opinion that, in the circumstances, there wouldhave been other factors for the appellant’s interdiction which have notbeen placed before the tribunal. Hence, the tribunal was inclined tothink that the respondent had acted unreasonably. The tribunal wasgreatly influenced by this opinion in deciding that the dismissalof the appellant was completely unjustified and in ordering hisreinstatement.
In forming the opinion that there was something sinister in theappellant’s interdiction, the tribunal probably failed to consider therelevance of documents R37 and R38, which constitute evidence of theback ground to the appellant’s interdiction. Even if there was no writtenreport of the investigations, an inquiry into alleged irregularities hadcommenced on or about 07.11.79 and the appellant had beenquestioned in that regard", pending finalisation of such inquiry and priorto his interdiction. As such, there is no justification for the very strongopinion which the tribunal formed namely, that the appellant’sinterdiction was motivated by extraneous considerations. This opinion,in turn, contributed to the findings of the tribunal that the bank had notacted in good faith in terminating the appellant’s services.
I agree that in the absence of other considerations such asprobation and past conduct, the derelictions committed by theappellant did not per se warrant the termination of his services. Hehad withheld cheques on a few occasions until the customer hadprovided sufficient funds to satisfy such cheques. He had alsoaccepted deposits after closing hours. The appellant explained thatthis was done to help rural customers and in appropriate situations.He thought that in a growing bank, there has to be some relaxation ofthe rules. It was also alleged that there were irregular alterations inthe books of accounts. However, as observed by the tribunal therewas no misappropriation of funds or any dishonesty on the part of theappellant.
The evidence shows that notwithstanding his lack of experience,the appellant was a hard working man. But he was sensitive. He alsohad problems with Raj, the Manager of the Matara Branch whoappears to have been over strict. The appellant complained withsome justification that Raj was particularly strict and did not grant himleave, even in situations where leave was clearly justified.
In the light of the available evidence, there is no justification for theobservation of the Court of Appeal that the appellant could not bereinstated in view of the fact that he held a position of trust andconfidence involving the handling of public funds. This statementcarries the implication that the appellant was guilty of conductinvolving moral turpitude. But the evidence does not warrant thatview.
The justification for not reinstating the appellant is the fact thateven after the expiry of 4 years, he remained a probationer. He hadnot passed the requisite Bankers’ Examination. He had not subjectedhimself to a medical examination as required by his letter ofappointment. He had been warned more than once. His replies werebrusque, if not rude. His letters were unhappily worded. I do notmean to say that he has an evil mind. In fact, when he argued hiscase on the 2nd day of hearing, I had the impression that he is anintelligent man possessed of sincerity. He would probably do well inany vocation which suits his genius.
The above statement would suffice to relieve any grievance theappellant may have arising out of the observations made by theCourt of Appeal. The only question left now is the adequacy ofcompensation ordered by the Court of Appeal. On this question, therelevant facts are that the appellant had only 4 years probationaryservice, at the time he was dismissed. On the available evidencethere was no certainty of confirmation. There is no justification for theopinion of the Labour Tribunal that appellant should have beenconfirmed. Yet, the Court of Appeal has awarded him seven yearssalary as compensation amounting to Rs. 76,020/- together withcosts in a sum of Rs. 3,000/-. This is an award of compensation whichis normally made in favour of a permanent employee. I am, therefore,unable to increase the sum awarded by the Court of Appeal. Therespondent has not challenged the amount so awarded. I direct therespondent to deposit the said sum of Rs. 76,020/- with the Asst.
Commissioner of Labour, Galle on or before 31.03.95. Subject to thisdirection, the appeal is dismissed, but without costs.
G. P. S. DE SILVA, C.J. -1 agree.
RAMANATHAN, J. -1 agree.