MINISTER OF LABOUR AND OTHERS
COURT OF APPEAL.
DE SILVA. J.
ARBITRATION A 2636.
4th OCTOBER, 1999.
3rd NOVEMBER, 1999.
Writ of Certiorari ■ Arbitration Award – Industrial Disputes Act, Ss.4( I), 16,17. 18. 19, 20, 36(5) – Reference of dispute to compulsory arbitration -Collective Agreement in force – Is the reference lawful?
The Petitioner has entered into successive Collective Agreements with CC I Workers Union from time to time and the Collective Agreementremained in force.
The 4U’ Respondent Union moved for a revision of the CollectiveAgreement and demanded a 50% wage increase. As this was not met theMembers of the Union began picketing first, and thereafter struck work.When the strike was prolonging the Minister of Labour referred thedispute to compulsory arbitration.
It was contended that (1) the reference is bad in law as there was norepudiation of the Collective Agreement by either party (2) that theArbitrator should have called upon the Petitioner to produce evidence inrespect of its capacity to pay the demanded increase (3) that thestatement of the matter in dispute referred amounted to a decision by 1stand 2nd Respondents (Commissioner of Labour) that some increaseshould be granted, and the function of the Arbitrator (3rd Respondent)was purely to determine the quantum of such increase.
Although in the Statement of Objections the 4lh Respondent Unionhad taken up the position that, the collective agreement expired in March1995, evidence showed that it is still in force.
S.4 of the Industrial Disputes Act confers power on the Minister torefer by an order in writing an industrial dispute if he is of the opinion
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that the Industrial dispute is a minor dispute for settlement byarbitration.
The order of reference is an administrative act of the Minister who hasto form an opinion as to the factual existence or apprehension of anindustrial dispute.
The power of the Minister to refer an industrial dispute to arbitrationis limited only when it is pending before a judicial forum (LabourTribunal).
S. 17 of the Industrial Disputes Act states that the “Arbitrator shallmake all such inquiries . . . However, it is observed that the Petitionerknew the demand of the Respondent Union – 50% salary increase – inthese circumstances it was the duty of the Petitioner to assist thearbitrator by placing relevant evidence to solve the dispute."
Per de Silva J..
“Since the arbitrator is empowered under S.36(l) to require anyperson to furnish particulars, produce documents and give evidence,it would have been a very desirable thing to call the Petitioner to giveevidence …"
Under S. 16 of the Industrial Disputes Act an order referring a disputefor settlement by arbitration shall be accompanied by a statementprepared by the Commissioner setting out each of the matters which tohis knowledge is in dispute between the parties.
From the documents annexed to the Commissioners objections, it isclear that discussions before the Commissioner too proceeded on thebasis that some increase in wages could be given to the workers subjectto certain conditions. Therefore the question in dispute as formulated isin order.
APPLICATION for a Writ of Certiorari to quash the award and thereference to arbitration.
Cases referred to :
Aislaby Estate Ltd., us Weerasekera 71 NLR 241
Wimalasena vs Navaratne [1978-79] 2 Sri.L.R. 10
Nadarajah vs Krishnadasa 78 NLR 25
Upali Newspapers Ltd., vs Eksath Kamkaru Samilhiua [ 199913 Sri.L.R. 205
Walker Sons & Co. Ltd., vs F.C.W. Fry 68 NLR 73
Volanka Ltd. u. Seneviratne Minister of Labour and Others
(De Silva, J.)
Liyanage vs Queen 68 NLR 265
Brown & Co. Ltd., vs Ratnayake – Arbitrator and 3 others (1986) BALJVol. I Part vi – 229
Piyadasa vs Bata Shoe Company  1 Sri.L.R. 91
Frewin & Company Ltd. vs Dr. Ranjit Atapattu & others  2Sri.L.R. 53
S.L. Gunasekera with Indra Laduwahetty for the Petitioner.
Adrian Perera S.S.C. for 1st Respondent.
Ms Chammantha Unamboowe for 4th Respondent Union.
Cur. adv. uult:
January 28, 2000.
DE SILVA, J.
Tliis is an application for a grant and issue of a mandatein the nature of a writ of certiorari to quash the award of thearbitrator (3rd Respondent) dated 1 5lh September 1998 andalso to quash the reference of the purported dispute by theMinister of Labour (1st Respondent) to arbitration.
Before 1 deal with the submissions of counsel regardingthe points raised at the hearing, it will be useful to briefly recitethe facts leading to the order of the Minister the 181 respondent,the legality of which has been challenged in these proceedings.
The petitioner has entered into successive collectiveagreements with Ceylon Commercial and Industrial WorkersUnion from time to time and the last agreement came intoeffect on 1st July 1992. This collective agreement provided thatit shall remain in force unless determined by either partygiving six months notice, subject to the provision that neitherparty could give notice of determination before 1st July 1995and that such notice should not expire before 30"’ June 1995.It is observed that such notice has not been given by eitherparty and the collective agreement remained in force.
The collective agreement of 1992 sets out scales of wagesand provided for the payment of a non recurring cost of living
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gratuity computed on the basis of the Colombo ConsumersPrice Index. There was also provision for the cost of livingcomponent to be consolidated into the salary annually inDecember.
By letter dated 1 lUl July 1995 the 4lh respondent Unionmoved for a revision of the collective agreement and demandeda 50% increase in the wages. The petitioner’s position was thatthe demand of the Union for a wage increase is unreasonableand without any justification as the salaries and terms andconditions of Volanka Limited employees were higher Lhanthose employees in comparable employment.
About the end of March 1997 members of the Unionbegan a "picketing" campaign between 1 1.30 and 12.00 nooneveiyday and there was general unrest during this period atthe work place.
Negotiations on the question of increase in the wagescontinued for nearly two years and from the end of July 1997to the beginning of October 1997 the members of the Unionstruck work.
The Union complained to her Excellency the President. Asa result the Commissioner of Labour intervened but could notbring about a settlement. When the strike was prolonging, theMinister of Labour (lsl Respondent) referred the dispute tocompulsory arbitration.
Counsel for the petitioner urged three grounds in supportof this application. Firstly that the reference to arbitration bythe Minister was bad in law as there was no repudiation of theagreement by either party. Secondly that the arbitrator shouldhave called upon the petitioner to produce evidence in respectof its capacity to pay the demanded increase in wages.Thirdly that the staterrient of the matter in dispute referredto arbitration amounted to a decision by the lsl and 2'1'1respondents that some increase in the wages should be
Volanka Ud. u. Seneviratne Minister of Ijzbour and Others
(De Silva. J.)
granted to the members of the 4lh respondent Union and thatthe function of the arbitrator, namely the 3rd respondent waspurely to determine the quantum of such wage increase.
On the first question counsel for the petitioner submittedthat in the statement dated 11th November 1997 filed by the 4threspondent he has taken up the position that the collectiveagreement entered into between the parties in 1992 expired inMarch 1995. However the witness called by the 4"‘ respondentviz. W.D.J. Anthony gave evidence to the contrary andadmitted that the said collective agreement was still in force.
It was his submission that the Minister has nojurisdictionto refer expressly for determination by an arbitrator, a disputewith regard to the terms of a live’ collective agreement as thecollective agreement which was in force would be binding onthe parties. He further stated that the reference by theMinister to arbitration of a dispute as to whether the wagesprescribed by a 'live’ collective agreement should be increasedis in fact an indirect reference of a dispute whether a ‘live’collective agreement should be amended, altered and/orrevised.
Counsel for the 4"' respondent submitted that noagreement between the employee and employer could takeaway from the Minister the powers vested in him by section4(1) of the Industrial Disputes Act.
Section 4 of the Act confers powers on the Minister to referby an order in writing an industrial dispute if he is of theopinion that the industrial dispute is a minor dispute forsettlement by an arbitrator appointed by him. The order ofreference is an administrative act of the Minister who has toform an opinion as to the factual existence or apprehension ofan industrial dispute (Aislaby Eslate Ltd. Vs. Weerasekara"1).Justice Pathirana in the same case at page 253 stated that "Igo still further and take the view that section 4(1) of the Actvests the Minister with an amplitude of power (subject only to
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the fetter that he is referring an industrial dispute within themeaning of the Act) to order in writing once he is of tine opinionthat the industrial dispute is a minor dispute for settlement byarbitration to the Labour Tribunal… as the Minister is actingsolely in an administrators capacity and not judicially orquasi-judicially. The concluding words in section 4(1) :"notwithstanding that the parties to such dispute or theirrepresentatives do not consent to such a reference", in facthighlight the amplitude of power vested by section 4 in theMinister”.
The same question was again considered by the SupremeCourt in Wimalasena Vs. Navaratne and two others12) and itwas held that the Minister had the power to refer a dispute forsettlement by arbitration under section 4(1) of the IndustrialDispute Act even though an inquiry was pending in the labourtribunal regarding the same dispute. It was also held thatthe reference to arbitration is a lawful exercise of the powersvested in the Minister by statute and does not amount to aninterference with the pending proceeding of a judicial nature.Justice Sharvananda as he was then too considered thisquestion in Nadaraj ah Vs. Krishnadasa!31.
However in a case decided on the 3rd of March 1999 (UpaliNewspapers Ltd. Vs.EksathKamkaruSammuthiya141) the Courtof Appeal considered the same question in the light of thedecision given in Walker Sons & Company Ltd. Vs. F. C. W. Fryl5)where Chief Justice Sansoni, H.N.G. Fernando, S.P.J. andT.S.Fernando, J. (Thambiah, J. and Sri Skandarajah, J. dissent-ing) held that a labour tribunal exercises judicial powers.
The Court of Appeal also considered the decision in thecase Liyanage Vs. Queen101, Article 1 16 and Article 1 70 of thepresent Constitution where the term “Judicial Officer" isinterpreted and came to the conclusion that the Minister hasno power to refer a matter pending before a labour tribunal forarbitration as it would amount to interference with thepending proceedings of a judicial nature.
Volanka Ltd. v. Seneviratne Minister of Labour and Others
(De Silva. J.)
From the above it is clear that the power of the Minister torefer an industrial dispute to arbitration is limited only whenit is pending before a judicial forum viz. labour tribunal.
According to the facts of the instant case there was adispute which could not be resolved by the parties nor throughconciliation with the intervention of the Commissioner ofLabour. The Minister thereafter exercised-his discretion interms of section 4( 1) and referred the dispute for settlement byarbitration. Therefore I hold that in the circumstances of thiscase the terms of the collective agreement which operated asimplied terms of the contract of employment did not affect theMinister's power under section 4(1).
The second ground raised by the petitioner was that inview of section 17 of the Industrial Disputes Act which imposesa duty on the arbitrator to make all such inquiries into thedispute as he may consider necessary he should have calledupon the petitioner to produce evidence in respect of hiscapacity to pay the demanded increased wages.
It is to be noted that once the Minister has made the orderof reference in terms of section 4( 1) the arbitrator appointed byhim becomes seized of the dispute and is charged by section17 “to make all such inquiries into the dispute as he mayconsider necessary, hear such evidence as may be tendered bythe parties to the dispute and thereafter make such award asmay appear to him just and equitable". Section 16 authorizeshim to admit, consider and decide any other matter which isshown to his satisfaction to have been a matter in disputebetween the parties to the date of the order of reference,provided that such matter arises out of or is connected with thestatement prepared by the Commissioner. Section 36(5) of theAct supplements this power. Sections 18, 19 and 20 deal withthe award of the arbitrator and speak of incidents, attributesand tenure of the award made by the arbitrator.
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Section 17(1) of the Industrial Disputes Act wasinterpreted in Brown & Company Ltd. Vs. Ratnayake Arbitratorand Three Othersm by Rodrigo, J. as follows:
"It is important to note that the section enacts thatarbitrator shall make all such inquiries. This section does notsay that the arbitrator shall not hold an inquiry. In my viewthe word ‘make' is a pointer to how the inquiry commences. . . the arbitrator can start the ball by calling upon any partyin the first instance to place his case before him and thereafterheai- the other party, if affected by the case placed before thearbitrator by the party who begins to give him an opportunityto place his case in answer.”
It was the contention of the petitioner that the arbitratordid not call upon the petitioner to lead evidence on any specificmatter as contemplated by section 17(1) read with section36( 1) of the Industrial Disputes Act. In the instant case therewas a dispute as to who should begin the case. After hearingthe submissions the arbitrator made order calling upon thepetitioner to commence leading evidence. However at thatstage the petitioner's position was that "there was no case tomeet” but ready and willing to produce any document orevidence which the learned arbitrator calls upon the petitionerto produce. In these circumstances respondent union wascalled upon to lead evidence with regard to the dispute referredto arbitration. The union led the evidence of one Anthony whoadmitted the existence of the collective agreement and alsotold the arbitrator that the petitioner is in a financial positionto meet the demand of the union.
Counsel for the 4th respondent submitted that arbitratoris not bound to call for evidence and cited the decision inPiyadasa Vs. Bata Shoe Companywhere the Court of Appealhad stated that an arbitrator in a reference is only required tohear such evidence as may be tendered by the parties to thedispute (section 17) unlike the Industrial Court which has tohear such evidence as it may consider necessaiy (section 24).
Volanka UcL v. Seneviratne Minister of Labour and Others
(De Silva. J.)
It is observed that the petitioner knew the demand of therespondent union viz. 50% salary increase. His position wasthat they pay the highest wages in the coir industry but wasprepared to consider a salary increase if linked to an increasein productivity either on the basis of higher production orlower manning levels in the factory. In these circumstances itwas the duty of the petitioner to assist the arbitrator by placingrelevant evidence to solve the “dispute".
The petitioner marked several documents in crossexamination of the witness of the 4Ul respondent union.Having done that the petitioner now cannot complain that thearbitrator should have asked it to produce particular items ofevidence.
However it seems to me that since the arbitrator isempowered by section 36( 1) of the Act to requ ire any person tofurnish particulars, produce documents and give evidence itwould have been a very desirable thing to call the petitioner togive evidence at the conclusion of the respondents evidenceeven though he declined to do so at the commencement on thebasis that ‘there was no case to meet’.
The third point raised by the petitioner was that thestatement of the matter in dispute was bad in that it amountedto a decision by the lsl and 2ml respondents that some increasein wages must be given to the employees of the petitioner anda direction that the question for determination by the 3nlrespondent was only what the quantum of such increaseshould be.
The statement of the matter in dispute referred toarbitration set out in P( 1)(b) reads as follows “Whether thedemand of the All Ceylon Commercial and Industrial WorkersUnion for ail increase of 50% of Wages to its members,employed at M/S Volanka Limited is justified. If not so whatrelief could be granted to them".
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It was contended that the order of the Minister making areference to arbitration in terms of section 4( 1) of the IndustrialDisputes Act is inseparable from the statement of the matterin dispute referred to arbitration by such order formulated bythe Commissioner of Labour under section 16 of the said Actand that such references are liable to be quashed by unit ofcertiorari where the circumstances merit issue of such writ. Insupport of this contention the petitioners relied on the decisionof Frewin&Company Ltd. Vs. Dr. Rcmjilh Attapall.it & Others191.
It is observed that section 16 of the Industrial Dispute Actprovides that an order referring a dispute for settlement byarbitration shall be accompanied by a statement prepared bythe Commissioner setting out each of the matters which to hisknowledge is in dispute between the parties.
It must be noted that the petitioner and the 4th respondentunion held discussion on the question of increase in the wagesfor over two years commencing from the letter written by the4Lh respondent union dated 1 1"' July 1995 where the unionmoved for a revision of the collective agreement and demandeda 50% increase in the wages. The petitioner's position was thatthe demand of the union was unreasonable as salaries of itsemployees were higher than those employed in comparableemployment. The same arguments were put forward beforethe Commissioner of Labour when he intervened.
From document 2R4 annexed to the Commissioner'sobjections it is clear that discussion before the Commissionertoo proceeded on the basis that some increase in wages couldbe given to the workers subject to certain conditions.
Therefore I hold that in the circumstance of this case thequestion in dispute as formulated by the Commissioner isquite in order. I dismiss this application with costs.
VOLANKA LTD v. SNEVIRATNE MINISTER OF LABOUR AND OTHERS