WANASUNDERA, J.—Jayawardena vs. Urban Council, Ja-Ela
1976Present: Sirimane, J. and Colin-Thome, J.
THE CEYLON BANK EMPLOYEES’ UNION, Applicant-
THE BANK OF CEYLON, Employer-RespondentS.C. 135/75—LT 1/32621
Labour Tribunal—Application by union in respect of terminationof services of workman—Finding that workman concerned engagedin running another business while employed under respondent—Whether breach of such workman’s contract of service—Findingsby Labour Tribunal against workman on a matter not part of thecharge sheet served on him—Sufficient evidence on this pointbefore the Tribunal—Findings against workman on this point alsoupheld.
The appellant union made an application to the Labour Tribunalin respect of the termination of the services of one N. Devarajah, oneof its members. The respondent Bank had terminated the saidworkman’s services as from 14th June, 1967, after holding a domesticinquiry. It was held by the Labour Tribunal after a lengthy inquirythat the* respondent Bank was justified in terminating the servicesof the said workman.
The President of the Labour Tribunal took the view that on theevidence before him the workman had actively participated in abusiness called “ Om Parasakthi Exchange ”. Further that in doing sohe had not only abused his position by using confidential informationbefore the cashing of cheques but had also employed himself in someother occupation while in the employment of the responcTent-Bankwhich had also resulted in his violating the secrecy concerningcustomers’ accounts. It was submitted on behalf of the applicant-appellant union that the said business was not that of the said
134S HUMANE, J.—Ceylon Bank Employees' Union vs. Bank of Ceylon
workman but of his wife and that he was her Attorney, that evenif it was his own business, it was not a money lending business andif so, there was no breach of the terms of his employment.
One of the clauses of the service agreement entered into by thesaid workman read as follows : —
“ I will give my whole time and attention to the discharge of myduties and will observe the rules and regulations from timeto time made by the Bank for the guidance of itsemployees. ”
Held.— (1) That as far the running of the business of “OmParasakthi Exchange ” was concerned, there was overwhelming,evidence that the said business was in fact that of the workman con-cerned and that he actively ran the same though it was registered inthe name Of his wife.
That it is an implicit condition of any ordinary contract ofservice that a workman must devote the whole of his normal officehours to his work but that the clause from the service agreementreferred to above went far beyond such a condition and laid downthat the workman could not engage himself in any other gainfulemployment. He therefore could not engage himself in some parallelbusiness, profession or other employment as had happened in thiscase. Further, in the present case the respondent Bank had madethe conditions of this clause quite clear when in a circular sentout to all its employees it prohibited any gainful employment exceptwith the sanction of the Board of Directors.
That, although the complaint had been made on behalf ofthe appellant that the question of breach of secrecy by thesaid workman, which also entailed instant dismissal, was not acharge against him at the domestic inquiry, this however, not onlyarose as being incidental to the nature of the business carried onby this workman, but there was evidence placed before thePresident of the Labour Tribunal on which he could have come tothe findings that he did. A perusal of the proceedings before theTribunal showed that there was no prejudice caused to the workmanon this ground.
Case referred to :
Wessex Dairy Ltd. vs. Smith, (1935) 3 K.B. 80.
Appeal from an order of a Labour Tribunal.
C. Ranganathan, Q.C., with K. Kanag-Iswaran, S. Mahenthirartand G. Kumaralingam, for the applicant-appellant.
S. J. Kadirgamar. Q.C.. with E. B. Vannithamby, for therespondent.
Cur. adv. vult.
June 24, 1976. Siremane, J.
This is an appeal by the applicant-appellant union on behalfof N. Devarajah from an order of the Labour Tribunal dismissingits application. The facts briefly stated are that N. Devarajah(hereinafter referred to as the appellant) was employed in theBank of Ceylon. He was interdicted on 13.2.66 and after a domestic
SIMMANE, J.—Ceylon Bank Employees' Union vs. Bank of Ceylon 135
inquiry his services were terminated as from 14.6.67. The applica-tion made to the Tribunal on his behalf stated that no properinquiry had been held and that no charge was proved against theappellant. The respondent Bank took up the position that reasonswere given for the interdiction and thereafter a charge sheet wasserved on the appellant. After the appellant’s explanation wasreceived an inquiry was duly held and the appellant affordedevery opportunity of defending himself. It was after the reporton that inquiry that the Board of Directors decided to terminatethe services of the appellant and that the respondent Bank wastherefore justified in doing so. The President of Labour Tribunalafter a fairly lengthy inquiry held that the respondent Bank wasjustified in terminating the services of the appellant as therewas overwhelming evidence which proved that the workmanhad committed acts of serious misconduct by violating the termsand conditions of his contract of services. In coming to thisconclusion the President observed that—
“The totality of the evidence suggests that the workmanactively participated in the business of the Om ParasakthiExchange. Alabdeen, Thambirajah and the workman’s wifewere all figureheads. The workman had abused his positionby using confidential information before cashing of cheques.The workman had also employed himself in some otheroccupation while in the services of the bank, what is more, inan occupation which has violated the secrecy concerningcustomer’s accounts. ”
The main ground for termination of the appellant’s serviceswas no doubt the fact that he ran the business called “ OmParasakthi Exchange ” though the appellant denied this and triesto make out that it was the separate business of his wife. Theevidence discloses that even his interdiction was on this groundas the Manager of the Bank had questioned him on this matter atthat time. On this aspect of the case learned counsel for theappellant urged —
that the business of Om Parasakthi Exchange was notthat of the appellant but of his wife and he was onlyher Attorney ;
even if it was the business of the appellant it was not amoney lending business;
SIRIMANE, J.—Ceylon Bank Employees' Union vs. Batik of Ceylon
if it A^as not a money lending business there was nobreach of the terms of his employment.
As regards (i) above there was overwhelming evidence (whichI need not repeat here) that the business Om Parasakthi Exchangethough registered in the name of the appellant’s wife was reallyhis business and that it was he who actively ran the said business,his wife having nothing whatever to do with it and being merelyhis nominee. The appellant had even admitted in a Magistrate’sCourt case that it was his business registered in the name of hiswife. On the evidence led the finding that the business “ OmParasakthi Exchange ” was that of the appellant and rim by himwas irresistible and the President could have come to no otherconclusion.
As regards (ii) the submissions were based on the fact thatthe charge sheets served on the appellant for the domestic inquirydescribed the business as a “ money lending business ’ and thatone of the terms of his employment (R2) was that membersof the staff must not engage in money lending and if they dothey would be liable to instant dismissal. At the inquiry beforethe President though no doubt submissions were made that itwas not a money lending business the main issue appears to havebeen as to whether the business of Om Parasakthi Exchange wasthat of the appellant or of his wife. The President did not cometo a finding that the business was a “ money lending ” businessbut only that the business of Om Parasakthi Exchange was thebusiness of, and run by, the appellant and not his wife. The busi-ness has been described as that of encashing Government,Corporation and post dated cheques. The President was of theview that the running of the business of “ Om ParasakthiExchange ” (quite apart from money lending) was one (if notthe main) act of misconduct which violated the terms and condi-tions of the appellant’s contract of service which justified hisdismissal. This brings us to submission (iii) mentioned above.
As regards submission (iii) the question arises as to whetherthe running of the business of Om Parasakthi Exchange (not re-garding it as a money lending business) was a contravention bfthe terms of the appellant’s employment. In this connection therespondent Bank produced marked R1 the service agreemententered into by the appellant and referred clause (3) thereofwhich reads,
“ I will give my whole time and attention to the dischargeof my duties and will observe the rules and regulations fromtime to time made by the Bank for the guidance of itsemployees ”.
SIRLMANB, J.—Ceylon Bank Employees' Union vs. Bank of Ceylon 137
There can be no doubt that the words “ My whole time andattention ” must be read subject to an implied limitation, but Iam unable to agree with learned counsel for the appellant whenhe submits that this clause does not prevent the appellant fromcarrying on another occupation outside normal office hours, i.e.the whole time required for bank work (like overtime, etc.). Ifthis contention is correct it means that “ My whole time andattention ” in the above clause must be read “ My whole timeand attention during normal office hours ” the whole of the timerequired for bank work as stated above. It is an implicit conditionof service in any contract that the workman must devote thewhole of the normal office hours to his work. I think clause (3)referred to above goes far beyond that and it seems to me thatit lays down that the workman will not engage himself in anyother gainful employment. In any ordinary contract of service(without a condition like clause 3) the workman must devotethe whole time for which he is paid (that is his normal workinghours) in furtherance of his master’s interest and not his own.This was indeed what was held in the case of Wessex DairyLimited us Smith, (1953) 3 K.B. 80, cited by learned counsel forthe appellant. This case does not help in the decision of the instantcase as the condition imposed by clause 3 goes beyond thenormal contract of service and stipulates something more. Inmy view a reasonable construction of the words in this clausewould mean that the workman must not devote any part of histime to any other gainful employment. This does not mean thatthe workman, for instance, cannot have a poultry run at his homeand sell some eggs or grows flowers for sale as a hobby duringhis spare time, but it certainly prevents him from engaging him-self in some parallel business profession or other employment.The question whether any such engagement falls into the formeror latter category is one of fact and must depend on the circums-tances on each particular case. This type of stipulation is notuncommon as the same type of condition applies even to publicservants who are prohibited from engaging in any other businesswithout permission. The respondent Bank has made the condi-tions of this clause quite clear when it sent out a circular (R3) in1952 to be brought to the notice of all its employees. This circularrecited clause 3 and prohibits any gainful employment exceptwith the sanction of the Board of Directors. The circular alsoreqiured every employee to make a declaration that they werenot so gainfully employed or if they were how long it wouldtake to discontinue such employment. It was submitted for theappellant that there was no evidence that such declarations werein fact obtained or that the contents of this circular were broughtto the notice of every employee in view of the evidence ofDonald Perera that he does not remember this circular. The
SIRIMANE, J.—Ceylon Bank Employees' Union vs. Bank of Ceylon
evidence however discloses that this circular was sent out in theordinary course of business and it can be presumed that inaccordance with the normal practice of the bank every employeewas made aware of this circular. The best evidence that this wasso came from the appellant himself as seen in these passages incross-examination : —
“ Q. I am suggesting to you that it was always your intentionto run this business although it stands registered inin your wife’s name ?
A. I do not agree with that.
Q.Why could you not have had Alabdeen transfer thebusiness in your name ? Was there anything preventingyou from doing so ?
A. Becuse the bank’s regulations do not permit a memberof the staff to run a business. It permits the wives ofemployees to run a business.
Q.You know very well that if Alabdeen’s business wastransferred into your name and if you were personallyrunning it you would be contravening the Bank’sregulations ?
Q. That was quite clear in your mind ?
Q. You also know that if Alabdeen’s encashment of chequebusiness was transferred into your name and youran it you would be liable to dismissal from the Bank’sservice for contravening the regulations ? ”
“ Q. I suggest to you that your wife was just a figureheadput forward by you for this business ?
A. It is not so.
Q. I suggest to you that you put forward your wife as afigure-head because the bank’s regulations prohibitedyou from running this business of encashment ofcheques ?
A. That is not correct.
Q. You admit that if you did run this business in yourname and if you were detected you would bedismissed ?
SIKIHANE, J.—Ceylon Bank Emyloyees’ Union vs. Bank oj Ceylon 139
Q. And, you knew, that if you ran the business yourselfand if you were caught and dismissed, that was adismissal that you could not complain against ?
A. Yes. ”
So that it is abundantly clear that the appellant was well awareof the contents of, the circular and also knew that in running thetype of business he did he was contravening the terms andregulations of his employment. The Om Parasakthi Exchangewhich the appellant ran did business which ran into thousandsand thousands of rupees each month and the evidence accepted bythe President showed that the appellant had given instructionsthat before cheques of rupees five hundred and over were cashedhe had to be consulted. This necessitated the witness Alaudeencontacting the appellant frequently during office hours and theappellant checking on customers’ accounts sometimes beforegiving his approval. In view of these matters the conclusion ofthe President that the appellant was engaged in running thebusiness of Om Parasakthi Exchange in contravention of theterms of his employment alone is sufficient to justify thetermination of his services.
Learned counsel for the apellant also complains that thequestion of breach of secrecy which also entails instant dismissalwas not a charge made against the appellant on the charge sheetserved on him for the domestic inquiry. This matter howeverarose as being incidental to the nature of the business carried onby the appellant and the instructions given by him to Alaudeen.The appellant denied the allegation of Alaudeen that the latterhad to consult the appellant before cashing cheques for Rs. 500and over and that the appellant would go inside the bank andthen come and tell Alaudeen whether to cash the cheques or not.It was open to the President on the evidence placed before himto draw the inference that the appellant used his position in theBank to check on customers’ accounts and instructions and wecannot say that he was wrong in drawing that inference. Thecomplaint of learned counsel for the appellant that the appellantwas taken by surprise on the question of breach of secrecy is notsupported by the proceedings at the inquiry before the Tribunal.Ho such complaint was made before the Tribunal nor was anyapplication made for time to meet this allegation. On the contrarythe appellant denied this allegation in his evidence but the Presi-dent found against him. The inquiry before the Tribunal lasted anumber,of days and there could not have been any question ofsurprise. We do not see that any prejudice was caused to theappellant on this ground.
SIRIM.ANE, J—Ceylon Bank Employees' Union va. Bank of Ceylon
The last matter on which the President found against theappellant was’that he had issued two cheques without sufficientfunds to meet them. It would appear that the appellant had twobank accounts No. 1 and No. 2. Account No. 1 was solely for thepurpose of meeting his standing order to the bank to pay theinsurance premium on his insurance policy which he had keptas security with the bank for an overdraft obtained by him. Thepremium had to be paid once in six months and the bank had aninterest in keeping this policy alive as they held it as securityfor the overdraft. It was found that funds in No. 1 account wereinsufficient to meet the premium and the bank had thereforetransferred the money from the appellant’s No. 2 account to theNo. 1 account to meet the said premium. The bank did not informthe appellant of this transfer. It was in these circumstance thatthe two cheques issued by the appellant on his No. 2account were dishonoured. The mandate signed by theappellant when he opened the accounts with the bankgives the bank the necessary authority to transfer fundsfrom one account to another without prior notice to the appellant.So that on a strict construction of the terms and conditions onwhich these accounts were opened the bank was justified in thetransfer it made without informing the appellant. In thesecircumstances the appellant should have known that funds wouldhave been transferred from his account No. 2 to account No. 1 tomeet the premium on the insurance policy and thereforerefrained from issuing any cheques without checking the balanceto his credit in account No. 2. It can therefore be said (thoughsomewhat technically) that the appellant had issued chequeswithout funds and the finding of the President on this accountcannot be said to be wrong. The circumstances show however thatthese two cheques were not dishonestly issued without funds butissued bona fide in the belief that the funds in his No. 2 accountwould meet them. This ground alone would certainly not be asufficient justification for the termination of the appellant’sservice but as stated earlier the main ground (which was a verysubstantial ground) was that he ran the business of OmParasakthi Exchange and thereby contravened the terms of hisemployment.
On a consideration of the totality of the evidence placed beforethe President we are unable to say that he has in any way mis-directed himself or come to a wrong conclusion. The appeal isdismissed with costs fixed at Rs. 157.50.
Colin Thome, J.—I agree.
THE CEYLON BANK EMPLOYEES’ UNION, Appicant-Appellant and THE BANK OF CEYLON, E