052-NLR-NLR-V-73-THE-CEYLON-ESTATES-STAFFS’-UNION-Appellantand-THE-SUPERINTENDENT-MEDDECOMBR.pdf
278
Ceylon Estates Staffs' Union t>. Superintendent, Mcddccombra
Estate, Watagcda
1970Present: Weeramantry, J.THE CEYLON ESTATES STAFFS’ UNION, Appellant, and THESUPERINTENDENT, MEDDECOMBRA ESTATE,WATAGODA, and another, RespondentsS. G. 184/68—Labour Tribunal, No. 9/1297
Industrial dispute—Employer's right to transfer his staff—Employee's disobedience totransfer order—Termination of employee's services—Validity.
An employee, 'who was employed as senior factory officor and acting as headfactory officer of the northern division of a tea estato, received a letter from hisemployers informing him that he was transferred to tho southern division ofthe estate as the senior assistant factory officer with immediate effect'. Hewas assured specifically that his salary and the terms and conditions of hisappointment would ho the same as those attached to his post at the northerndivision and that his transfer was not a demotion. The employee refused to
accept the transfer on the ground that he was “ forced to believe " that it was a
demotion. It was admittedly a condition in the contract Of service that theemployee “ shall not be reduced in grade
WEERAMANTRY, J.—Ceylon Estates Staffs’ Union v. Superintendent, 279
Mtddtcombra Estate, Watagoda
Held, that, inasmuch as (1) tha management made it perfectly plain that theemployee’s position remained unaffected by the transfer, and (3) the'transferdid not come within any of the limitations of the employer's right to transfer,the employee was not entitled to refuse to act on it. ( There was, moreover,no evidence that tho employee was down-graded. In the circumstances theemployers wore justified in terminating tho services of the employee fornon-compliance with the transfer order.
A-PPEAL from an order of a Labour Tribunal.
Walter 'Jayawardena, Q.C., with P. SomatilUkam, for the applicant-appellant. –
Lahshman Kadirgamar, for the employers-respondents.
Cur. adv. wilt.
Juno 8, 1970. Weeramantrv, J.—
Mcddecombra estate consists of two divisions—a northern division of1,148 acres and a southern division of S31 acres. Each division has itsown factory.
The factory of the southern division is smaller and of considerably lesscapacity than tho factory on the northern division, for even apart fromthe fact that it serves a smaller division, it does not handle thatdivision’s entire production of leaf.
The employee in this case was at tho relevant date the senior factoryofficer of the northern division and was acting as tho head factory officer.Ho had earlier served as the senior factory officer of another estate ownedby the 2nd respondent company, known as the Vclli Oya estate whichwas 1,350 acres in extent and thus served a larger area than oven thonorthern division. He had boon transferred to Mcddecombra north in1903 and served there till this dispute arose in September 19G7.
On 9th September 1907 the group Manager of the appellant Companyscut tho letter R1 to the employco informing him that he was transferredto tho south division as the senior assistant factory officer with immediateeffect, but the same letter specifically informed him that tho terms andconditions of this appointment would be the same as thoso attached tohis present post at north division.
Tho employee replied by R2 of loth September 19G7 refusing to acceptthe transfer to tho south factory. He stated that he had acted for thehead factor}- officer of the north factory which was a much bigger factorythan the south and that in all fairness he should be promoted instead ofbeing demoted. On this basis he requested a reconsideration of thoManagement’s decision and promotion to the existing vacancy of headfactory officer.
"2S0 WEER-VMAXTKY, J.—Ceylon Estates Sta ffs' Union v. Superintendent,
Middccombra Estate, U’atagodci
There hncl thereafter been discussions between the employcoTmd themanagement of the respondent company and by letter It3 the latterconfirmed the transfer and reiterated that it was on the same terms andconditions as tho post held by the employee in the north division. Tothis the employee replied by R4 refusing to accept the transfer. Thoemployee repeated his position in RG stating that he was unable toaccept the demotion and by R7 tho Company replied to him that hisposting to tho south factory ns senior assistant factory officer was not ademotion, repeating onco moro that lie would enjoy the same terms andconditions as in his present appointment-. This letter also informed himthat the decision could not bo revoked and that unless be complied withtho transfer order tho Company would bo compelled to take disciplinaryaction which may even amount to a termination of his services. Theemployee was given ten days’ time for compliance with the. transferorder. On 15th October 1067 tho employee replied stating once morohis unwillingness to accept tho post in the south factory “ sinco I amforced to believe that this is a demotion.” He stated reasons for thisbelief and pointed out the difference in acreage covered by tho factoriesand complained again that at this juncture when ho could be'made ahead factory officer since ho had successfully acted in that capacity intho other factory, he could not bo asked to go on transfer to a place lowerin every respect than tho one ho then held. He repeated his request fora promotion to tho vacant post of head factory officer and expressed hiswillingness, if this was not possible, to go on transfer or promotion.toanother ostato of tho Company.:
Thereafter tho employee took up the matter with his Union .who on16th October 1067 addressed to. the management letter R9 stating thattho employee was entitled to be considered for promotion to the vacantpost of head factory officer and that a transfer at that stage appearedcalculated to deny or damage his prospects of promotion. The Uniontook up tho position that such an action was contrary to clause 6 of theCollective Agreement relating to terms and conditions of employment oftho technical staff of Tea and Rubber Estates, entered into between theCeylon Estates Employers’ Federation and the Ceylon Estates Staffs’Union..
The management replied stating that it had no intention of withdrawingits docision to transfer, and on 15th October 1967 by its letter R12terminated tho employee's services with immediate effect on. tho groundthat he had failed, in spite of repeated instructions in writing, to fake up"duties in the south factory as senior assistant factory officer.
Tho Collective Agreement referred to has been marked RI2 and.is oneentered into on 23rd April 1965. This agreement provides by clause 4that the assignment of staff into grades is to bo in accordance with agrading table set out in Schedule A. It goes on to provide that those in
TVEERAMAXTRY, J.—Ceylon Estates Staffs' Union v. Superintendent, 2SI
Meddecombra Estate, Watagoda
service prior to the date of the agreement “ shall not bo reduced in grade.*'The grading table shows that the technical staff are classified into gradesranging from special A to grade 12. It contains a salary scale set outagainst each grade and also relates tho grades to tho acrcago of the estate.A toa cstato with an acreage between 1,126 and 1,200 corresponds ingrading to grado 5 while an estate botween 826 and 900 acres wouldcorrespond to grado 9.
The contention of tho appellant, based on this grading table, is thathaving regard to the difference in acreage of the area covered by'thenorth and tho south factories respectively, tho employee's transfer wouldhave meant his reduction in grado from 5 to 9. This, it was submitted,would affect his prospects of promotion and was a reduction in rank whichho described as a demotion. It was also submitted that tho commissionsto which he was entitled would bo diminished in consoquence of thetransfer.
On tho other hand the respondent company has submitted that thiswas neither a demotion nor an adverse factor in regard to futurepromotion, in view of its repeated assurances to tho employee that hissalary as well as tho terms and conditions of his appointment would bethe same as those in his previous post.
It was further submitted on behalf of the employee that tho employerwas in any event not justified in terminating the cmploj’ee’s servicesfor non-compliancc with the transfer order.
This appeal thus involves a consideration of two matters, namelywhether the transfer was so prejudicial to the employee ns to make thotransfer wrongful and secondly the propriety and legality of tho orderof termination of services made for defying a transfer order.
The employers right to transfer his staff within his service is too wellestablished to need elaboration here. Both in English Common Law1and more specifically in relation to industrial disputes in India2 andCeylon 3 that right has received firm recognition.
As this Court observed in Manager, K akiadJcniya Group v. The LankaEstate Workers' Union,4 “to grant the demand that the managementof tho estate cannot transfer a Kongany from his division in suchcircumstances is to interfere with the discretion of the managementos to where in the interest of tho estate—and it may be of the manhimself—the workman should be best employed. Such intcrferonco1 Sec Bouzourou v. Ottoman Bank, (1930) A. C. 2T1.
Bareilly Electricity Supply Co. Ltd. v. Sirojjuddin tfc Others (1900) 1 L. L. J. 55C.
Manager, Xakiadcniya Croup t Lanka Stale Workers' Union (1909) 77 C. L. W.
62.
«(1^09) 77 C. L. V. 52.
282WEERAMAXTRY, j.-—Ceylon Estate* Staffs’ Union v. Superintendent,
Meddtcombra Estate, Watagoda
in the management of estates is not in the best interests of their product-ivity and therefore not in.tho interest of the country. In the makingof a just and equitable order one must consider not only the interest ofthe employees but also the interest of the employers and the wider,interest of the country, for' tho object of social legislation is to have notonly contented employees but also contented employers.”
The Supreme Court of India has been careful to stress that an■ order by which an employee was transferred from one department of acompany to another is a matter of internal arrangement and thatIndustrial Tribunals should be very careful beforo they interfere withsuch orders made in the discharge of the management’s , functionshLiability to be transferred from one establishment to another at a differentplace by the employer or at his instance is a normal incident of service,that is to say, it is an implied condition of service 2.
So also the Labour Appellate Tribunal of India has observed that anumber of decisions of that Tribunal had laid down that it was anundoubted right of the management to transfer an employee for thepurpose of business, a proposition which it treated as established law 3.It has been held further by the Tribunal that unless the terms of theemployment provide otherwise the Company has the right to transferand it is for the employee to show that there has been a contractingout of this position4. Again, a bench of four judges of the SupremeCourt of India, while observing that Industrial Tribunals should interfereif a transfer order is made mala fide or for the ulterior purpose ofpunishing an employee for his trade union activities, has stressed that afinding of mala tides should be reached by Industrial Tribunals only ifthere is sufficient and proper evidence in support of the finding s.
Since then the legal position is clear that the employer is ordinarilyentitled to the right to transfer, wo must see whether the specialcircumstances of this case bring it within any of the acknowledgedlimitations of that principle. Limitations having a bearing on the presentcase are the limitations that the employee cannot be made to sufferfinancially, that the transfer should bo bona fide and in the interests ofthe business, and that it should involve no reduction in rank.
Mala fides has not been proved in this case and it would suffice toexamine whether the facts bring, this case within either of the otherlimitations referred to.
■»_ Bareilly Electricity Supply Co. Ltd. v. Sirajjuddin and others (I960) 1 L. I/. J. 656.i Workmen of Philips (India) Ltd. v. Philips (India) Ltd. (I960) 2 L. L. J. 125.
British India Corporalion Ltd. (1956) 1 L- L. J. 591.
4 Ibid.Syndicate Bank Ltd. v. Its Workmen (1966) 1 L. L. J 440.
WEERAMAXTRY, J.—Ceylon Estates Staffs' Union v. Superintendent,
Meddecombra Estate, Watayoda
283
It has been urged on behalf of the appellant that the transfer to thesmaller factory would entail a reduction in commissions. It wouldappear however that there has been a total failure on the part of theemployee to placo beforo the Tribunal any material on which it can beconcluded that commissions would decline if the transfer was accepted.The only evidence placed before the Tribunal has been that thecommissions in the north factory would be Rs. 240, and it has notoven been stated whether this sum of Rs. 240 is a monthly, quarterlyor an annual sum. Further, no evidence has been placed beforo theTribunal indicating in what manner or to what extent this commissionwould bo reduced in the event of a transfer to the south factory. Jlr.Burton, tho Manager of the Company, has in cross-examination admittedthat the commissions would bo reduced. I am unable to say that sucha reduction Is anything more than nominal. In the absence of morespecific evidence of the extent of the reduction, the burden of furnishingproof, oven of approximate figures, lay upon the applicant. The onlyfigures we have are that 30,000 lbs. of leaf from the south division arehandled by the north division factory and that the south division factoryhandled 88,000 lbs, but these figures by themselves, though they mayindicate a greater capacity of production in the north factory, affordus no basis for calculation of the reduced commission in the south factory.There has been no evidence placed before tho Tribunal in rogard to themannor in which commission is related to the quantity of leaf handled,nor Is any figure by way of percentage or otherwise indicated which mayserve as a basis for calculation. It is significant also that the employeewas cross-oxamined on the basis that in any event he would bo entitledonly to a limited amount of commission. After he answered this questionin tho affirmative, it was put to him that on this basis, by his going toMeddecombra South his commission would not have declined at all,but to that question ho has given no answer.
In tho result thero is no material placed boforo tho Tribunal by theapplicant to support his submission that his emoluments would boaffected to an extent rendering justifiable his refusal to accept atransfer.
It is urged, again, that in any event his position would be adverselyaffected by this transfer in so far as it concorns his prospects for promotion,as tho fact of his “down-grading” from grado 5 to grade 9 would bo afactor operating against him. As against such an adverse comment,it may well bo urged on tho other hand, in tho particular circumstancosof this case, that tho management had gone out of its way to stressrepeatedly that tho salary and othor advantages of his earlier appointmentwere being expressly preserved.
It was mentioned at tho argument of this appoal as being a factor towhich attention should be paid, that Clause C of tho Collective Agreementmakes oxpress provision regarding promotions. Clause 6 provides that
2S4 WEERAMAIfTRY, J.—Ceylon Estates Staffs' Union v. Superintendent.
.Mcdilccombra Estate, Vulagoda
wherever possible and subject, in all cases, to tho suitability of theomployeo, vacancies in higher grades shall bo filled by promotion fromthe lower grades.
I am of the view that Clause G has no bearing on the issues to bo decided,as we are not hero threatened with any violation of the principle of pro-motion from lower grades to higher grades. The onJy question is whethersince the applicant has been transferred to what is described as a lowergrade, his prospects of promotion to tho higher grade will bo adverselyafFected, but as I have already said the management made it perfectlyplain that the cmjdoyeo’s position remains unaffected by the transfer.
Tho submission of tho appellant that there has been a “ down-grading ”,being based upon the grading table in schedule A of the CollectiveAgreement, calls for a close examination of the implications of this schemeof grading.
The President of tho Tribunal has talc on the view that this gradingtable only specified the minimum salary that is to bo paid to a person inestates of tho respective acreages therein specified, and that there isnothing to prevent a person working on any one of those estates fromreceiving a higher salary scale than would appear in tho grading table.In other words the mere fact that a person is attached to an estate of aparticular acreage does not necessarily mean that he falls into the salaryscale shown against the acreage or into the corresponding grade. Conse-quently a person may, while upon an estate of lower acreage, draw asalary appropriate to an estato of higher acreage, and in such a case hissalary scale would bo the salary scale corresponding to the larger estateand he would bo graded accordingly. It follows from this view that if aperson is transferred to a smaller estato but his salary and other termsand conditions are expressly stated to be the same as those lie enjoyedon tho larger estate, then the grading he now enjoys would remainunaffected.
In this view of the matter, and upon a consideration of thecircumstances of the particular case before him, tho President hasconcluded that the transfer in question did not adversely affect theposition of the applicant.
This view of the nature of the grading table would appear to bo morepractical and more consonant with realities than the view contendedfor by the appellant that reduction in grado automatically results whena person moves to an estate of smaller acreage, even though his salaryand other terms and conditions of service are left unaffected. Such aview would mean that an employer would not even for special reasons boable to transfer an experienced officer from a larger estate to a somewhatsmaller estate while preserving his emoluments unaffected. One can
WEERAMAXTRY. J.—Ceylon Estates Staffs' Union v. Superintendent, 2S5
Meddecombra Estate, II'atagoda
well visualise a number of situations in which such a course is renderednecessary. For examplo a factory of a smaller estate may have on itelaborate machinery or convorsoly machinery in a greater state of dis-repair than tho machinery on a factory sorving a larger acreage. Itmay well be that in view of tho special condition of the machinery onthe smaller estate the management of a group of estates may desire topost to that smaller factory its most experienced technical officer. Theremay again be particular conditions on a smaller cstato that necessitatevery special skill in the manufacture of tea. I do not think that anemployer in such special circumstances would be precluded from shiftingto such a factory tho best skill available to him, even though it sohappens that his most experienced officer happons to bo already in afactory serving a larger area.
Again, the management of a group of estates may, having regard to thenecessity for deployment of available personnel to the best advantageof tho concorn, need to move an employee from one estate to another.It would not always be possiblo in the event of transfers—and indeedsuch a possibility is most unlikely—to find estates of such similar acreagesthat tho emploj'ces transferred fit in at the same point in the gradingtable. Suppose, for example, the management has three estates rangingfrom 700 to 1,000 acres. The grades involved would range from 4 to 2.It may bo inevitable in such a case that some of tho transfers shouldoperato in such a manner as to cause persons from larger estates to moveto smaller estates and vice versa. When an employee is transferred tosuch smaller estate, so long as his emoluments, salary and other condi-tions of service aro expressly loft unaffected, it can scarcely be saidthat a violation of the grading table inevitably results. To tako such aview would be toronder unworkable tho proper management of companiesowning or managing moro than ono estate, for, considering tho improba-bility of all its estates being of tho samo grading, it would then bo wellnigh impossible to effect any transfers at all. I
I would however at the same time wish to stress that the mere fact ofsuch an assurance by the management docs not of itself suffice to regu-larise all transfers to estates of lower acreage, for much would dependon the circumstances of each particular case. One important factorwould be whether the difference in area between the estates in questionis so great as to render the difference in grading too pronounced to benegatived by any assurance of the management that the employee’sposition uas left unaffected. Each case would be one for decision by theTribunal concerned in the light of its own particular circumstances andin the exercise of the Tribunal’s discretion ; and no general rule can beformulated.
2SC WJEERAM.-YXTJRY, J.—-Ceylon Estates Slajfs’ Union i>. Superintendent,
Mcdilceombra Estate, U'atagoda
Having regard to the fact that the Tribunal, being possessed of allthe particular circumstances peculiar to this case, has not seen thetransfer as producing any adverse effect on the cmploj’ee, I see nosufficiently compelling reason to interfere with that view.
I now pass on to another argument urged in appeal, based on Clause16 of the Collective Agreement. This clause provides that in any casein which an employee to whom the Collective Agreement applies is notsatisfied with the application to him by his employer of the conditionsof service contained in the Collective Agreement, if such case is notsettled in 6 weeks by negotiation between the parties concerned, it maybe taken up by the Union with the Commissioner of Labour for settle-ment under the provisions of the Industrial Disputes Act.
It is submitted on behalf of the appellant that the employer could nottake unilateral action by terminating the services of the employee beforethe period of negotiation therein contemplated had elapsed. It issubmitted further that there was a genuine and real dispute as to whetherthere was or was not a demotion and that even if the transfer was rightlegally and fairly, the order of dismissal was unfair and uncalled forhaving regard to Clause 16.
I must observe however that no mention of this matter appears inthe application to the Tribunal, and no argument was addressed to theTribunal based on Clause 16. No correspondence has been markedindicating any reference to Clause 16 or any position arising from it,nor was a single question put to Mr. Burton upon this matter althoughhe was subjected to a lengthy cross-examination. Had it been put toMr. Burton in cross-examination that the management was guilty of aviolation of Clause 16, there may well have emerged some additionalmaterial Indicative of the management’s position on this matter.Moreover this is not a point that has even been taken in the petition ofappeal; and in the light of all these circumstances I do not think anargument based on Clause 16 is available to the applicant at the stage ofargument in appeal. I
I would wish however to observe that over and over again in thiscase the employer has asked the employee to take up his position asfactory officer on the same terms and conditions, as before, and has beenmet over and over again by a categorical refusal to obey these orders.
By R4 of 2nd October the employee states that he had already informedthe management in writing of his refusal to accept the transfer..: By R5of 5th October the employer wanted to know whether or not the employeewas taking up the position as instructed.. By R6 the employee againrepeated that he was unable to accept the transfer. The management 'reassured him by R7 that the transfer was not a demotion. By R8 theemployee, repeating that it was a demotion, refused to accept the transfer.After the correspondence addressed to the management by the Union
WEERAJLAXTRY, J.—Ceylon Estates Staffs' Union v. Superintendent. 2S7
Meddecombra Estate, Watagoda
and the Management’s reply thereto, the emploj-ee again requested themanagement by Rll to reconsider the matter stating once more that hewas unable to accept the transfer, and it was in those circumstancesthat the management by R12 informed him on 15th November that inview of his failure in spite of repeated instructions in writing to take upduties as instructed, his services were terminated.
No doubt the employee was entitled to contest the right of themanagement to make this transfer and the employee was entitled totake the necessary steps towards bringing this dispute to adjudicationin the manner provided by law. The employee was not entitled howeverto set the employer at defiance by flatly refusing to carry out orders.
There is of course no general principle that an employee is in all casesbound to accept such a transfer order under protest, for there may becases where the mala tides prompting such an order is so self-evident orthe circumstances of the transfer so humiliating that the emploj ee maywell refuse to act upon it even under protest. In the present case howeverI do not think the orders wrere of such a nature that it can fairly be saidthat the employee was entitled flatly to refuse to obey them even underprotest. If his grievances were heard before the proper Tribunal andhe succeeded eventually, he would have had his position restored togetherwith all benefits that he might have lost in the interim. This is a case,moreover, where the right to transfer has been conceded as a right inherentin the employer, for the submissions of the employee before thePresident quite frankly admit that “ the management no doubt has thelegal right to transfer its employees from post to post or from estate toestate within the same management. ” The only grounds on whichthe transfer in this case has been resisted namely that the exercise of thepower was not bona fide and that it should not in any event harmthe employee, have not, as already observed, been proved. Ono canwell visualise the enormous practical difficulties and the indisciplinethat would result from the view that pending any dispute as to transferthe employee can refuse to act in the position to which he has beentransferred. I
I have not been referred to any dicta or judgments of this Courtrelating to the result of the disobedience to a transfer order. Therewould appear however to be Indian authority to the effect that disobe-dience to a transfer order can amount to misconduct justifying termi-nation. In Workmen of Phillips (India) Ltd. v. Phillips (India) Limited1where a workman refused to accept a transfer order it was held by theLabour court of Madras that it could not be contended that the order oftermination for disobeying the order of transfer was bad and inoperativeon the ground that it was passed without holding any domestic inquiryafter the receipt of the explanation from the employee concerned. Incases where it is not the employee’s position that there was no suchrefusal on his part, but he only challenges the legality of the order of* ( JOCO) 2 Labour Law Journal, pp. J35-0.
2SS WEERAMANTRY, J.—Ceylon Estates Staffs' Union v. Superintendent.
-1leddteombra Estate, M'utayodn
transfer which he has admittedly disobeyed, it was held to be unnecessaryto hold a further inquiry on this matter. By way of analogy with thepublic service, reference may also be made to Gulam Haqquani Khanv. Stale of Uttar Pradesh1 where it was held,2 regarding a public officer,that " even assuming that the transfer was invalid the petitioner wasbound to have obe3*cd it. He could have filed an appeal or representa-tion but he could not have refused to carry it out. ”
I have already observed however that this is a matter which thiscourt docs not in the present case have to examine in detail. Moreoverthe Tribunal in this case has taken the view that the transfer was lawfuland bona fide and that the applicant has categorically refused to acceptthe transfer having said so in no uncertain terms in the several lettersthat he has written to the management. In this view of the matter thePresident has held that the termination was for just, cause. There ishere a finding of fact with which this court will not interfere except inthe most special circumstances and an appreciation of the legal positionregarding the right to transfer which cannot be said to involve anincorrect appreciation of the relevant rules of law.
In these circumstances I am not inclined to uphold the submission■that the Tribunal has in any way erred in arriving at its finding that thetermination was lawfully made and for just cause.
For the reasons I have set out I consider that no sufficient groundhas been made out for any interference with the order of the President,and I dismiss this appeal with costs.
Appeal dismissed.
1 [JOSS] 2 Labour Law Journal, p. 073.s ibid. At p. 076.