Ceylon Cement Corporation v. Fernando (Wijetunga, J.)
v.THE SRI LANKA STATE TRADING CORPORATION(TEXTILES) SALU SALA
COURT OF APPEAL.
A. DE Z. GUNAWARDENA, J.
C.A. 816/82 – L.T.A. ADDU 3320/80 NARAHENPITA.
JANUARY 23 AND FEBRUARY 6, 1990.
Industrial Dispute – Can a Labour Tribunal justify the termination of employment of anemployee on a ground not pleaded or supported by evidence by an employer ? – Evidenceof loss of confidence must originate from the employer.
Sri Lanka Law Reports
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The appellant in this case was employed as an Assistant Security Officer of the respondentCorporation and was dismissed after a domestic inquiry, where the charges were :
that he raided 3 shops without authority from head office, and
that he has thereby abused his powers.
After inquiry, the Labour Tribunal held that the said raids have been conducted withauthority from head office, but went on to justify the dismissal on the ground of loss olconfidence as the said employee had failed to act with responsibility in not sending a reportto the head office, in regard to said raids.
That the Labour Tribunal was in error when it justified the dismissal ot the employee ona ground that was not supported by evidence and not pleaded by the employer;
that in a case where the employer justifies the termination on the basis of loss ofconfidence the mere assertion by the employer is not sufficient. When such an assertionis made, it is incumbent on the Labour Tribunal to consider whether the employer'sapprehension is well founded. In such a situation, the evidence of loss of confidence mustoriginate from the employer.
Case referred to :
The Management of Panitole Tea Estates v. The Workman 1971 (1) LLJ 223, 240.APPEAL from judgment of the Labour Tribunal of Narahenpita.
N.R.M. DaluwatteP.C. with P. Keerthisinghe and T. Keenawinne for applicant-Appellant.Nihal K.M. Perera with L. Abeysekera and A. Weerasinghe for employer – Respondent.
March 9. 1990.
A. DE Z. GUNAWARDANA, J.
The appellant in this case was employed as an assistant security ollicerby the respondent corporation, the Sri Lanka State Trading Corporation(Textiles), Salu Sala and was stationed at Hatton. After a domestic inquirythe appellant's services were terminated by the respondent corporation.Thereafter the appellant made an application to the Labour Tribunalalleging that the said termination was illegal an unjustified and soughtreinstatement with compensation and gratuity. After inquiry, the LabourTribunal held by its order dated 09.11.82, that the termination wasjustified on the ground of loss of confidence in an officer holding a positionof confidence. The Labour Tribunal having considered the service of 11years of the appellant to the respondent corporation, awarded a sum ofRs. 2,750/- as relief consequent to the termination of his services. Thepresent appeal is from the said order of the learned President of theLabour Tribunal.
CA Tunis v. The Sri Lanka Stale Trading Corporation (Textiles) Saiu Sala371
The respondent corporation took up the position in the LabourTribunalinquiry that the appellant's services were terminated on 27.10.1980, ashe was found guilty at a domestic inquiry at which the charges were thatthe appellant had without authority raided the shops of 3 Salu Saladealers in Gampola on 25.06.78 and had taken charge of the identitycards of 2 of the said dealers without authority from the head office. It wasalso alleged that the appellant had given instructions, without the sanctionof the head office, to the Salu Sala stores at Kandy, not to issue textilesto two of the said dealers. Thus he is said to have abused his powers andhad acted without responsibility.
In the answer filed by the respondent corporation before the LabourTribunal it was pleaded that in view of the fact that the appellant had beenfound guilty of the said charges it was not conducive to have him in theservices of the corporation. It is important to note that there was noaverment in the answer, to the effect that the respondent corporation haslost confidence in the appellant.
At the inquiry before the Labour Tribunal witness Nazeer who is theProprietor of Cheap Side Stores, Gampola, gave evidence for therespondent corporation and stated that he was a registered dealer of theSalu Sala. That on 25th June, 1978 the appellant came to his shop andinquired about the prices of poplin material issued by the Salu Sala. Theappellant had pointed out that the price he quoted was above the pricefixed by the Salu Sala, for such material. Thereafter, he had asked for theidentity card and taken charge of it. The appellant had issued a receipt forthe same. The appellant had not recorded a statement from him about theincident. After the identity card was taken over by the appellant thewitness could not obtain his quota of textiles from Salu Sala. He had beenasked to come to Hatton the following day. Accordingly he had gone toHatton on the following day but was not able to get back his identity card.He later learnt that Salu Sala stores at Kandy had been instructed not toissue textiles to him. Thereafter he had made representations to the headOffice. The Head Office had issued a letter marked R3 to the Salu SalaStores at Kandy to issue textiles to him.
A. Nadasapullai the owner of the shop named Nadarajah & Sons ofGampola also gave evidence on behalf of the respondent corporation.This is the other shop that was raided by the appellant on the same day.According to Nadasapullai he was in India at that time. When he came
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back he had learnt that some Salu Sala official had come to his shop andmade inquiries about the prices of Salu Sala textiles and thereafter haddisclosed his identity and asked for the identity card from an employeewho was there at that time. Although the employee had protested that hecannot give the identity card as the owner was not there, the appellanthad asked for the identity card and taken it away. Nadasapullai had goneto Hatton and met the appellant, but he was not able to get back hisidentity card. He had reported this matter to the Head Office. Thereafterthe Head Office had issued a letter to Salu Sala Stores at Kandyauthorising the issue of textiles to Nadasapullai's shop. This letter wasproduced marked R7.
One Balasuriya Sumanasena who is the Asst. Manager(Administration), Salu Sala, has given evidence and stated that once araid is conducted a report should be sent to the Head Office. This was inanswer to a leading question asked by the Counsel for the respondentcorporation. However in cross – examination, at page 28 of the brief, hehas stated that he does not know whether there is any circular governingsuch raids and that the person who would know, is the Manager, securitydivision. In regard to the question whether an entry had to be made in thelog book when a report is submitted to the Head Office, he had stated thatit is necessary to enter in the log book when such a report is sent. He hadadmitted that although the summons required him to produce the log bookof the Hatton Office, he had failed to produce the said log book on that day.When asked whether Hatton Office should have maintained a log bookhe had stated that they ought to have maintained a log book. He hadfurther stated that he did not make an effort to get the log book of theHatton office, because he thought that it was not necessary.
The other witness called by the respondent corporation was W.S.Weeraratne, Deputy Manager (Security). He has set out the procedurethat should be followed in the case of a raid. His position was, that ifnecessary, the identity card would be taken charge of. Thereafter a reportwould be forwarded to the manager (Security). He is a person who hasworked in the Head Office and was not familiar with the procedure thatwould be followed by a Security Officer in a Regional Office. When askedby the Tribunal whether there is any circular setting out the procedure tobe followed in raids, this witness’s answer was that as far as he is aware,there is no circular. He went on to state that to his knowledge, there areno written instructions either. The register where letters received by Salu
CATunis v. The S.LS. Trading Corporation (Textiles) Salu Sala373
Sala, Head Office for the years 77/78 were entered, was produced,marked R9 by this witness. According to the said register there is no noteto indicate that report had been received by the Manager (Security) fromthe Gampola Office.
The appellant gave evidence on his own behalf. According to him, heconducted 3 raids at Gampola on 25.06.78, which was a Sunday. He didso on instructions received from Mr. Gamunu Wijeratne, the Manager(Security) Salu Sala. The three shops he went to on that day are, Cheapside, Nadarajah’s and Varieties. He had gone to Cheap Sidefirst becausehe had heard that Cheap Side was selling a yard of poplin at Rs. 12/50when the controlled price was Rs. 7/50. He had taken labourerChandradasa also along with him in this raid. He had made an entry in thelog book that he was taking Chandradasa along with him. He had sentChandradasa to the shop and when Chandradasa was about to pay forthe material, he had walked up to the shop owner and asked him as to whyhe was selling poplin material at a higher price when the controlled priceis Rs. 7/50. The owner had explained that this was not Salu Sala material.Thereafter he had asked for his identity card. The identity card was givento him by the owner. He gave a receipt for the same. Similarly he went toNadarajah's and Varieties. At Nadarajah’s he was able to obtain theidentity card but Varieties did not give him the identity card. When askedas to why he did not record statements from the owners, he had statedthat, at that stage he was afraid to record statements. Therefore he hadasked the owners to come to the Hatton Office. On the following Mondaymorning he had informed the Head Off ice that he had obtained the identitycards and samples of material from the two shops. When he rang up thehead office the duty officer at thattimewas security officer Mr. Karunapala.He was instructed by the Manager (Security) to send only the two casesin which the charges could be proved. Security Officer Mr. Karunapalahad also instructed him to inform the Salu Sala Stores at Kandy tosuspend the quotas of the two shops against which there is evidence. Heaccordingly informed Salu Sala Stores at Kandy to stop the quotas ofCheap Side and Nadarajah’s against whom there was sufficient evidence.As he could not get the identity card and obtain sufficient evidence againstthe shop named Varieties, he did not proceed against that shop. Allthese details were recorded in the log book maintained at Hatton Office.At the domestic inquiry, the appellant had insisted that the said securityofficerMr. Karunapala and the Manager (Security), Mr. Gamunu Wijeratne,who gave him instructions should be called. However the respondent
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corporation failed to do so. In his evidence the appellant has specificallystated that he sent the report in respect of the said raid under registeredcover, having noted the details in the log book. In cross examination hewas confronted with the position that he had taken up in his statement tothe investigating officer Salu Sala, on 22.02.79 wherein he had stated thathe is not quite sure whether he sent the report by post or handed it overpersonally to Mr. Wijeratne, the Manager (Security). His explanation wasthat he cannot remember what he stated in that statement but in hisevidence he was sure that the report was sent by post. He also stated thathe noted the registered article number in the said log book. However therespondent corporation has failed to produce the said log book inspite ofhis specific request.
The learned President of the Labour Tribunal having considered theevidence led in the case has held that-he accepts the position taken upby the appellant that, when he conducted the raids in Gampola, he did soon the verbal instructions of the Manager (Security) Mr. Wijeratne. WhileI agree with the said finding of the learned President, it has to be pointedout that the respondent corporation has also failed to seriously challengethis position. In fact, the respondent corporation did not call the Manager(Security), Mr. Wijeratne, to give evidence at the domestic inquiry or in theLabour Tribunal.
The learned President of the Labour Tribunal thereafter goes on tostate as follows
" However it is to be noted that there is one important aspect inthe applicant’s conduct where he has failed to satisfy the Tribunal thathe had acted in a responsible manner. This is in regard to the followup action subsequent to the raids. In particular, his failure to submitreports leaves him open to suspicion that he had acted with theintention of obtaining some personal gain”.
It is of interest to note here what the learned President of the LabourTribunal had to say about the allegation of "obtaining some persona! gain"earlier on in the same order.
“C. It was suggested that the applicant’s action had been directedto the purpose of obtaining some personal gain although no evidencewas led before the Tribunal in this regard”.
CATunis v. The S.L.S. Trading Corporation (Textiles) Salu Sala375
Thus it is clear that on the said observation of the learned President thatthere is no evidence led in the case to substantiate the position that theappellant had acted with the intention of obtaining some personal gain.Furthermore it must be noted, that the two owners of the shops raided, intheir evidence before the Labour Tribunal did not at any stage take up theposition or even suggest that the appellant demanded any money or anyfavour. If in fact, such a request was made by the appellant, it is veryunlikely that they would not have brought that to the notice of the LabourTribunal because, they had suffered by the action taken by the appellant.Therefore the opinion the learned President of the Labour Tribunal hadformed, in casting a suspicion, that the appellant acted with the view ofobtaining some personal gain, in my view, is not supported by evidence(as seen by his own observation) and is an unreasonable inference.
In regard to the question whether the appellant submitted a report inrespect of the said raid, the learned President of the Labour Tribunal haspointed out that the appellant in his statement to the Salu Sala InvestigatingOfficer had stated that he cannot remember whether he posted orpersonally handed over the said report to the Manager (Security).However before the Tribunal he was quite categorical that he reportedunder registered cover and made entries to that effect in the log book. Thissituation has prompted the learned President to hold that the appellantfailed to submit a report. When one considers carefully the position takenup by the appellant in the said statement to the Salu Sala InvestigatingOfficer and the position taken up by the appellant in the evidence at theLabour Tribunal, it cannot be said that one position contradicts the other,except that he has taken a specific stand in his evidence before theTribunal. In any event his evidence could have been contradicted by therespondent corporation if it took the trouble to produce the log bookmaintained at the Hatton Regional Office, because the appellant waspositive that he made an entry in the log book, not only as to the sendingof the report, but also as to the number of the registered article receipt.In fact, as referred to earlier, witness Sumanasena admits havingreceived summons to produce the said log book. As I have alreadypointed out according to the said witness if a report was sent regardingthe said raid the procedure was to have made an entry in the log bookabout the sending of the report. Another way the respondent corporationcould have contradicted the appellant was to have called the formerManager (Security), Mr. Wijeratne. Both or either of these methods couldhave been easily followed by the respondent corporation to disprove the
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appellant’s contention that he sent the report. However the procedureadopted to show that a report was not received at the Head Office was byproducing the register where, ordinarily, the letters received at the HeadOffice, were noted. There is however no evidence that all the letters thatcame by post to Head Office had to be noted in the said register. Thus themere production of such a register when other cogent evidence wasavailable, in my view would not suffice to prove a fact upon which so muchdepends in this case. Furthermore the appellant has asserted on oaththat he sent the report concerned.
It must also be pointed out that the failure to send the report per secannot be held to be irresponsible conduct in itself. Since such raidswereconducted on the specific instructions of a superior officer it would be asmuch his duty to call for a report, if a report was not forthcoming from thejunior off icer. There is however, no evidence in this case that a report wascalled for by the superior officer. In addition according to the evidence ofboth witnesses, who were officials of the Salu Sala, there is no circular orany written instructions requiring the submission of a report. This may beinterpreted to mean that there was no imperative requirement to submita report after a raid was conducted. However the learned President hasconsidered the non-submission of the report as an act which amountedto irresponsible conduct, although in this case there was no cogentevidence in regard to the requirement of the submission of a report orwhether in fact in this instance a report was submitted by the appellantor not.
It is important to note that the learned President had justified thedismissal on the ground of loss of conf idence by the respondent Corporationin an officer who held a position of confidence. It would be appropriate torecall that the position taken up by the respondent corporation in itsanswer before the Labour Tribunal was that the appellant was dismissedfrom service after a.domestic inquiry on 2 charges. The charges were :
that the appellant had raided the shops of dealers of the respondentcorporation and taken charge of identity cards and stopped theirsupply of quotas without authority from the head office ;
that by engaging in such acts the appellant has abused his powerand acted without responsibility.
CATunis v. The S.LS. Trading Corporation (Textiles) Saki Sala377
It must be pointed out that there is no mention at all of any loss ofconfidence in the said charges. However upon a consideration of theevidence the learned President of the Labour Tribunal has held that heaccepts the position of the appellant that he conducted the said raids onthe instructions of the Manager (Security). Therefore according to thesaid finding both charges upon which the respondent corporation soughtto justify the dismissal of the appellant, fails. In spite of that, the learnedPresident of the Labour Tribunal has brought in the principle of loss ofconfidence to justify the dismissal although such a contention is notsupported by the evidence in the case. It is appropriate in this context topoint out that the two officers of the Corporation who gave evidence at theLabour Tribunal have not stated in their evidence that the acts of theappellant resulted in loss of confidence. This aspect is important becauseif in fact the respondent has lost confidence, the first person who mustassert that fact must be the employer corporation itself. In this case thereis no such evidence. In the case of The Management of Panitole TeaEstatesv. TheWorkmen asreportedinLawofDismissalbyS-R.deSilvaat page 45,
“ Which ever way one views the concept, loss of confidence in the
integrity of an employee must be supported by cogent evidence."
Furthermore, the question of loss of confidence is a matter speciallywithin the knowledge of the employer. Therefore the evidence of that factmust be adduced by the employer before the Tribunal. That has not beendone in this case. Thus it is seen that, although the learned Counsel forthe respondent corporation earnestly urged that the dismissal wasjustified as the employer had lost confidence in the employee, such anassertion is not borne out by the evidence available in the case.
It must be pointed out that the mere assertion by the employer is notsufficient to justify the termination of a workman on the ground of loss ofconfidence. When such an assertion is made it is incumbent on theLabour Tribunal to consider whether the employer’s apprehension is wellfounded. In such a situation, in my view, the evidence of loss ofconfidence must originate from the employer and such evidence islacking in this case.
For the above reasons, I am of the view that the termination of theemployment of the appellant by the respondent Corporation is not
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justified in law. In the circumstances, the appeal is allowed and the saidorder of the learned President ot the Labour Tribunal dated 09.11.82, ishereby set aside. It is hereby ordered that the appellant be reinstated withimmediate effect and that he be paid all arrears of salary and otherbenefits due to him under the law as from February 1979, as if he was inservice, continuously. It is also ordered that the respondent corporationpay the appellant a sum of Rs. 525/- as costs.