Trustees of the Ceylon School for the Deaf and Blind vs. Commissioner
CAof Labour and others95
TRUSTEES OF THE CEYLON SCHOOL FOR THE DEAF ANDBLIND VS. COMMISSIONER OF LABOUR AND OTHERSCOURT OF APPEALSRISKANDARAJAH, J.
CA 971/2007FEBRUARY 18, 2009MARCH 20, 2009APRIL 29, 2009MAY 15, 2009
Writ of Certiorari – Payment of Gratuity Act 12 of1983 ■ Section6 (2), Section 7 – Retirement • Pensionable service? Entitlement togratuity payments – salary paid by State • Changes made to thesalary after service period of employee – liability to pay arrears?Trust Ordinance – Section 114.
The petitioner an approved charity employed the 4th respondent – agovernment teacher in January 1969 as a teacher – after 33 yearsthe 4th respondent retired in April 2002. The respondent received apension from the State. The respondent was promoted in April 1997 andhis salary revised with arrears to be paid with effect from September1999. This was communicated in December 2005. The Commissionerof Labour informed the petitioner to pay gratuity and the arrears of thesalary. The petitioner contended that, they are not entitled in law tomake any payment for gratuity to a teacher whose salary was paid bythe State, and that, they are not responsible for changes made to theemployees position/salary after the service period of the employee hadended.
Held
In view of Section 7 as the 4th respondent was in the contributingpension scheme, he is not exempted by Section 7 of the GratuityAct,
Even though the notification to pay the enhanced salary wasin 2005 – three years after retirement, the 4th respondent waspromoted with effect from April 1997 – and the notification to pay
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the arrears from September 1999 is in order. Even though thenotification came after retirement the 4th respondent’s monthlysalary was revised and his salary was deemed to have been in effectfrom September 1999. The last salary has to be considered on thebasis of the revised salary.
APPLICATION for a Writ of Certiorari.
Case referred to:-
Hindu Women’s Society Ltd and others vs. Commissioner General ofLabour and others – SC 188/2007 – SCM 1.10.2007
M. A. Sumanthiran with Buddhinee Herathfor petitioner
Yuresha de Silva SC for 1-3 respondents
Hemantha Situge with M. K. P. Chandralal for 4th respondent.
September 03 2009
SRISKANDARAJAH, J.
The Petitioner is an approved charity incorporatedunder Section 114 of the Trust Ordinance with the aim ofproviding both academic and vocational education for deafand blind children. The 4th Respondent a government teacherwas recruited on the 15th of January 1969 to the Petitioner’sSchool. He worked in the capacity of a teacher for 33 yearswith the Petitioner and retired from service on the 21st of April2002. It is admitted by all parties to this application that the4th Respondent’s salary was paid by the government and he isreceiving a pension from the government. The Position of thePetitioner is that as the 4th Respondent was in a pensionableservice and after retirement he is receiving a pension, he isnot entitled to any gratuity payments as per the paymentof Gratuity Act No. 12 of 1983 but the gratuity paymentmade by the Petitioner to the 4th Respondent is a voluntarypayment. The Learned State Counsel who appeared for
Trustees of the Ceylon School for the Deaf and Blind vs. Commissioner
CAof Labour and others (Sriskandarajah, J.)
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the 1st and 2nd Respondents (the Commissioner and theAssistant Commissioner of Labour) brought to the notice ofthis court the Supreme Court case; The Hindu Women’s So-ciety Limited and Another v. The Commissioner General of La-bour and Nine others In this case the Commissioner Generalof Labour has given an undertaking that as the respondentis drawing a pension from the Government on the basis of anaward made by the Director of Pension he would withdrawthe notification marked P30, which is a notice issued underthe Gratuity Act.
The Petitioner submitted that without prejudice to theabove submissions the Petitioner made a payment of gratuityto the 4th Respondent amounting to Rs. 174,689.50 on
on the basis of his last drawn salary Rs.l 1,077/-.The Ministry of Human Resources Development, Educationand Cultural Affairs notified the Petitioner that the 4thRespondent had been promoted to Grade 1 in the teacherservice with effect from 21st April 1997 and that his salarywas revised accordingly and that the arrears were to be paidwith effect from 1st September 1999. Accordingly the 4thRespondent’s monthly salary was revised to Rs. 15,204/- andhe is entitled to this salary from 1st September 1999. The4th Respondent claimed that the gratuity payment to be madeon the revised salary that he was entitled to at the time ofretirement. As the Petitioner has not acceded to the requestthe 4th Respondent made a complaint to the Commissioner ofLabour and the Commissioner of Labour after an inquiry byhis letter dated 17th August 2007 informed the Petitioner thatthe Petitioner was unable to establish the fact that it dulypaid the Gratuity payment payable to the 4th Respondent asper the Payment of Gratuity Act and requested the Petitionerto pay a sum of Rs. 134,216.78 as remaining amount payableto the 4th Respondent and surcharges.
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The Petitioner’s challenge to the aforesaid order in thisapplication is two fold. One is on the basis that the Petition-er is not obliged in law to make any payments for gratuityto any teacher whose salary is paid by the Department ofEducation. The second is that the said order of the 1st and2nd Respondents is vitiated by error of law on the face of therecord in that the Petitioner cannot be lawfully held respon-sible for changes made to the employee’s position and salaiysifter the service period of the employee had ended since thePetitioner’s responsibility towards the employee ends withthe retirement of the employee.
The settlement arrived in the Supreme Court case referredto above; TheHindu Women's Society Limited andAnother v. TheCommissioner General of Labour and Nine others (supra) doesnot indicate whether the employee under consideration wasunder a contributory pension scheme or a non contributorypension scheme. In the present case the 4th Respondent wasin the contributory pension scheme and it is evident by thesalary particulars of the 4th Respondent. Section 7 of theGratuity Act provides:
The provisions of section 5 shall not apply to or in
relation to a workman –
employed as a domestic servant or as a domesticservant or as a personal chauffeur in a privatehousehold; or
entitled to a pension under any non-contributorypension scheme.
In view of the above provisions the 4th Respondent is notexempted by section 7 of the Gratuity Act. The Petitioner inhis counter affidavit admitted that according to Payment ofGratuity Act No 12 of 1983 as amended, an employee who had
Trustees of the Ceylon School for the Deaf and Blind vs. Commissioner
CAof Labour and others (S. Sriskandarajah, J.)99
been contributing to a pension scheme is entitled to gratuityand it was on that basis of this statutory obligation the 4thRespondent was paid his gratuity at the time of his retire-ment. But the Petitioner’s position was when the 4th Respon-dent’s salary anomaly was corrected and he was put on thecorrect salary scale by the Ministry of Education, the Petitionercannot be held responsible to award him enhanced gratu-ity on the basis of increased salary. The rate of payment ofgratuity is provided is Section 6. Section 6(2) provides:
A workmen referred to in subsection (1) of section 5 shall
be entitled to receive as gratuity, a sum equivalent to –
Half a month’s, wage or salary for each year ofcompleted service computed at the rate of wage orsalary last drawn by the workman, in the case of amonthly rated workman, and
In the case of any other workman, fourteen days’wageor salary for, each year of completed service computedat the rate of wage or salary last drawn by that work-man:
The question that has to be determined is the last drawnsalary in relation to the 4th Respondent. The 4th Respondent’ssalary at the time of retirement was paid without consideringhis promotion for Grade 1 for which he was entitled to from 21stApril 1997. The Ministry of Human Resources Development,Education and Cultural Affairs notified the Petitioner by itsletter dated 13th December 2005, three years after retire-ment of the 4th Respondent that the 4th Respondent had beenpromoted to Grade 1 in the teacher service with effect from21st April 1997 and that his salary was revised accordinglyand that the arrears were to be paid with effect from 1stSeptember 1999. Even though this notification came after his
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retirement the 4th Respondent’s monthly salary was revisedto Rs. 15,204/- and this salary was deemed to have been ineffect from 1st September 1999. Therefore the 4th Respondentis entitled to this salary at the time of retirement. In fact thearrears of salary to the 4th Respondent were to be paid witheffect from 1st September 1999. This fact indicates that he isnot only entitled to Rs. 15,204/- as his last salary at the timeof retirement but in fact his salary was rectified and paid.Therefore the Commissioner is not in error in coming to theconclusion that the last drawn salary has to be considered onthe basis of the revised salary.
In view of the above the Petitioner has not establishedany ground to issue a writ of certiorari to quash the decisioncontained in document dated 17th August 2007 marked 17.The application of the Petitioner is dismissed without costs.
application dismissed.
