Sri Lanka Law Reports(1978-79) 2 S. L. R.
Navaratne and two others
COURT OP APPEAL
RATWATTE, J. AND ATUKORALE. J.
C.A. 811/78FEBRUARY 12, 1979
Industrial Disputes Act, sections 4 (1), 31 B (2) (b)—Reference to arbi-tration by Minister—Proceedings alredy pending in Labour Tribunal—Whether such reference valid—Whether interference with judicial pro-ceedings then pending—Powers of Minister under section 4 (1).
The question that arose for consideration in this case was whether theMinister of Labour has the power to refer an industrial dispute for arbi-tration under section 4(1) of the Industrial Disputes Act when therewas at the time an inquiry pending in the Labour Tribunal regardingthe same dispute. By virtue of the operation of section 31 (B) (2) (b)a proceeding pending before the Labour Tribunal would have to bedismissed once reference to arbitration is made. It was contended onbehalf of the petitioner in this case that a pending dispute could notbe i eferred in this way to arbitration and that the Executive could notbe permitted to interfere in a pending proceeding of a judicial nature.
Tht Minister had the power to refer a dispute for settlement by arbi-tration under section 4(1) of the Industrial Disputes Act, even thoughan inquiry was pending in the Labour Tribunal regarding the samedispute. The reference to arbitration is a lawful exercise of the powersvested in the Minister by statute and does not amount to an inteferencewith the pending proceedings of a judicial nature.
Cases referred to
Nadaraja Ltd. v. N. Krishnadasan, (1975) 78 N.L.R 255.
S.C. 291/63—S.C- Minutes of 23.7.1964.
S.C. 460/75—S.C. Minutes of 7.7.1976.
S.C. 122/68, L.T. 2/19537—S.C. Minutes of 13.11.1972.
Estates and Agency Co. Ltd., v. Perera. < 1.975) 78 N.L.R. 289.
APPLICATION- for a Writ of Prohibition.
H. L. de Silva, with M. Y. M. Faiz lor the petitioner.
C. Ranganathan, Q.C., with R. L. Jayasuriya and Iftikcr Hussain, forthe 2nd respondent.
Cur. adv. vult.
Wimalasena v. Navarafne [Rafwatte, J.)
February 12, 1979.
The question that arises for consideration on this applicationis whether the Minister has the power to refer an industrialdispute for arbitration under section 4 (1) of the IndustrialDisputes Act, when there was an inquiry pending in the LabourTribunal regarding the same dispute.
The petitioner had on 16.06.1971 been appointed by the 2ndrespondent as an Extension Officer in the Co-operative Whole-sale Establishment, by the letter of appointment which has beenproduced marked A. At about the same time 166 others hadbeen appointed as Extension Officers in the C.W.E. Thepetitioner functioned as an Extension Officer for nearly 7 yearswhen by letter B dated 16.01.1978 the petitioner’s services wereterminated with immediate effect. On the same day the servicesof 156 other Extension Officers were also terminated. Thereason given for the termination in the letter B is that the 2ndrespondent had decided to close down the Extension Service.The petitioner was informed that in lieu of notice he would bepaid a month’s salary and a half month’s salary for every yearof service as compensation. On 02.03.1978 the petitioner made anApplication under section 31 (B) (1) of the Industrial DisputesAct to the Labour Tribunal against the 2nd respondent, statingthat the termination of his services by the 2nd respondent wasunjustified and seeking relief by way of re-instatement andback wages. The application has been marked as C. The 2ndrespondent on 31.05.1978 filed his answer, which has beenSnarked D. Applications to the Labour Tribunal for similarrelief against the 2nd respondent have been made by 152 otherpersons whose services as Extension Officers had beenterminated. The application of the petitioner and that of 10other applicants were taken up for inquiry on 25.08.1978 andwith the consent of all parties the eleven applications wereconsolidated and the matter proceeded to inquiry on the samedate. Senior State Counsel who appeared for the 2nd respondentled the evidence of D. P. R. Colonne, the Additional GeneralManager of the C.W.E. The representative of the petitioner andof the 10 other Applicants, Mr. Panditha commenced the cross-examination of Colonne and further inquiry was postponed for
The above facts are not in dispute.
On 04.10-1978 the inquiry was resumed and the witnessColonne was further cross-examined and according to thepetitioner, during the cross-examination Senior State Counselintimated to the President of the Labour Tribunal that aconference would be held in the chambers of the Solicitor-General between all parties in order to settle the matter.
Sri Lanka Law Reporis
(1978-79) 2 S. L. R.
According to the 2nd respondent on 04.10.1978, it wasMr. Panditba who asked for a postponement of the inquiry toascertain whether a settlement was possible or not and thatthereupon Senior State Counsel stated that a discussion could beheld in the Chambers of the Solicitor-General. There is a disputeas to who made the first suggestion, but there is no dispute thatthe inquiry was postponed in order to ascertain whether asettlement was possible. But this dispute as to who made thefirst suggestion is immaterial in deciding the question thatarises in this case. The 11 applications were to be called on
in order to determine whether a settlement had beenarrived at. A copy of the proceedings of 04.10.1978 has beenannexed marked E. The petitioner states that between 04.10.1978and 24.10.1978 he received no intimation of any conferencepertaining to this matter. The 3rd respondent, the Minister ofLabour on 20.10-1978 made Order under section 4(1) of theAct which was published in the Government Gazeite of
which has been produced marked F, appointing the1st respondent as Arbitrator and referrring for arbitration bythe 1st respondent, the industrial dispute in respect of thematter specified in the statement of the Commissioner of Labour,which accompanied the Order. The dispute that was referredwas whether the termination of the services of the members ofthe two Unions referred to in Schedules A and B in the GazetteF. respectively and the 129 workmen referred to in Schedule C,by the Board of the C.W.E. is justified and to what relief eachof them is entitled. The petitioner pleads that the said Ordermade by the 3rd respondent is ultra vires the powers conferredon him by the Act and has not been made bona fide but forextraneous reasons. The petitioner further states that the 1strespondent purporting to act on the Order made by the 3rdrespondent has taken certain steps and that the petitionerbelieves that 1st respondent w'ould proceed to adjudicate uponthe matter referred to him. The petitioner contends that the 1strespondent has no jurisdiction to adjudicate upon the disputereferred to him and therefore asks for a Writ of Prohibitionrestraining the 1st respondent from adjudicating upon thequestion as to whether the termination of the services of thepetitioner by the 2nd respondent is justified or not.
Learned Counsel for the petitioner submitted that the matterthat was before the Labour Tribunal was included in the disputethat was referred to Arbitration. When a matter is referredfor settlement by arbitration, an important consequence followsin that, in terms of section 31B(2) (b) in such a situationany application that is filed before a Labour Tribunal in respectof the same dispute has to be dismissed. Mr. H. L. de Silva for
Wimalasena v. Navaratne (Ratwatte, J.)
the petitioner submitted that section 3 IB (2) (b) will not applywhere there is a subsequent reference to arbitration. Hecontended that the process cannot be reversed. He thereforeargued that two separate proceedings will be pending in regardto the same matter. He further submitted that the primaryquestion is how may the powers under section 4 of the Act beexercised by the Minister. He contended that the Minister’spowers under this section are limited. For instance where theMinister has made a reference under section 4(1) of' the Actreferring an industrial dispute for settlement by arbitration,he has no power to revoke the said Order of reference. Herelied on the judgment of Supreme Court in Nadar aja Ltd. v.
N.Krishnadasan (1). He also cited two unreported judgments inS.C. 291/63. S.C. Minutes of 23.07.1964 (2) and S.C. 460/75—S.C.Minutes of 07.07.1976 (3). Relying on these authorities he arguedthat one cannot refer to arbitration a pending dispute on theprinciple that the Executive cannot be permitted to interfere ina pending proceeding of a judicial nature. Another importantconsideration Mr. de Silva submitted is that an award made byan arbitrator can be repudiated in terms of section 20 of theAct and therefore that an Arbitration Award from the point ofview of an employee is fraught with many risks at the hand ofan unscrupulous employer. He contended that the act of the 3rdrespondent was a mala -fide exercise of the power given to'him.He argued that the termination of the services of the petitionerand the others was in January 1978, but no action was: takenfor 10 months and that the Minister found it expedient to referthe matter for arbitration only when the 2nd respondent founda settlement inexpedient and impracticable. He furthercontended that the Legislature never intended that section 4 ofthe Act could be used arbitrarily and capriciously. Mr. de Silvafurther submitted that whatever doubts there may have beenbefore about the nature of the functions of Labour TribunalPresidents, today there is no doubt. He contended that in terms ofArticle 170 of the Constitution there is no question that LabourTribunal Presidents are Judicial Officers. He also referred toSection 116 of the Constitution and submitted that the 3rdrespondent’s Order referring this matter for arbitrationamounted to an interference in a Judicial proceeding;
The 3rd respondent in his affidavit has stated that in referringthe dispute relating to this Application for arbitration undersection 4(1) of the Act, he acted bona fide. The 2nd respondentexplained the circumstances under which the services of thepetitioner and the other Extension Officers were terminated. TheAnswer D filed by the 2nd respondent in the Labour Tribunalsets out the reasons. The 2nd respondent further states that after
Sri Lanka Law Reports
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the postponement of the Labour Tribunal Inquiry on 04.10.1978the Board considered the question of a settlement and took theview that as altogether 153 persons had gone before the LabourTribunal and as there were Trade Unions that were involved, itwould be inexpedient and impracticable to settle the dispute ir:the 11 cases that came up for trial before the Labour Tribunal. Inthe circumstances the 2nd respondent took steps to have thematter referred to arbitration. Mr. Ranganathan, learned counselfor the 2nd respondent contended that it was in these circums-tances that the 3rd respondent came to make the Order undersection 4(1). He argued that there was nothing wrong in theMinister doing so. The Minister becomes aware of a dispute onlywhen one of the parties brings the matter to the notice of theMinister through the Commissioner of Labour and moves that hemakes an Order under section 4(1). When that is done theMinister considers the matter and makes an Order under section4(1), if he so decides in the interest of bringing about industrialpeace. Mr. Ranganathan further submitted that the predominantpurpose of the Act is as set out in the preamble to the Act. Hetherefore submitted that the Minister’s powers under section4(1) of the Act to refer an industrial dispute for settlement bycompulsory arbitration, are very wide. Section 31(2) (b) c1 earlyindicates that the Minister’s rights prevail over individual work-men’s rights to go before a Labour Tribunal. The question thenarises, is the power of the Minister superseded by an applicationmade by an individual workman or to put it in another way, canan individual workman oust the power of a Minister by rushingto the Labour Tribunal ? The intention of the Legislature is madeclear by section 31 B (2) (b) and Mr. Ranganathan submitted thatthe section has no limitation to a case where there has been aprior reference to arbitration. He contended that the Ministercan make a reference under section 4(1) at any time before aLabour Tribunal makes its Order.
Mr. Ranganathan submitted that the judgment in the case ofNadaraja Ltd. v. N. Krishnadasan (supra) and the two unre-ported cases cited by Mr. H. L. de Silva have no bearing to thequestion at issue in the instant case. I am in agreement with thissubmission of Mr. Ranganathan. Those decisions were on theprinciple that on the same set of facts once the Minister exercisedhis power he cannot therafter exercise the same power on thesame matter, because once he has exercised his power he becomesfunctus. Mr. Ranganathan cited ■ an unreported judgment inS.C. 122/68 L.T. 2/19537—S.C. Minutes of 13.11.1972 (4). That is ajudgment of G. P. A. Silva, S. P. J. (as he then was). The factsin that case are similar to the facts in the instant case. There toothe Minister referred the dispute for arbitration under section 4
Wimalasena v. Navarafne (RarwaWe, J.)
whilst a L. T. Case was pending. The President refused tosuspend the proceedings. He went on to hear the case and dis-missed the application on the ground that it was out of time-Silva, S. P. J. held that the proceedings were irregular andwithout jurisdiction in view of the imperative provisions ofsection 31(2) (b) and he further held that the President shouldhave dismissed the application in view of the section. As Mr. H.
de Silva submitted, it is true that the employer-respondentwas not represented in that appeal and that the question as towhether the Minister had the power to make an Order undersection 4(1) does not appear to have been argued, but the caseis almost exactly in point and the judgment is a decision on thepoint, and I am of the view that the judgment is of some weight.Mr. Ranganathan cited the case of the Estates and Agency Co.Ltd. v- Perera (5) in which a somewhat similar question arose.The facts of that case are set out in paragraph 1 of the headnote.After the 2nd application to the Lobour Tribunal was dismissedon the ground that the principle of res judicata applied, theMinister referred the dispute for arbitration. A preliminaryobjection was taken to the arbitration proceedings on the groundthat the reference was bad in Law inasmuch that there was noindustrial dispute in existence at the time of the reference. Itwas held by the Supreme Court, inter alia, that if the Minister issatisfied of the existence of an industrial dispute, no doctrine ofestoppel by res judicata between the parties can prevent theperformance by the Minister of his statutory duty. Mr. Ranga-hathan referred to certain passages in the judgment of Sharva-nanda, J. which indicates that the Minister’s power undersection 4(1) are very wide. For all these reasons I am of theview that the Minister had the power to refer the dispute in theinstant case for settlement by arbitration under section 4(1) ofthe Act in spite of the fact that there was an inquiry pending inthe Labour Tribunal regarding the same dispute.
As regards Mr. H. L. de Silva’s submission that the Minister’sact amounted to interference in a pending proceeding of ajudicial nature, Mr. Ranganathan submitted that the Ministerwas exercising powers given to him by the Act. The referenceto arbitration is a lawful exercise of the power given to the
16Sri Lanka Law Reports(1978-79) 2 S. L. R.
Minister and by operation of Law certain consequences flow, i e.,in terms of section 31 B (2) (b) a proceeding pending before aLabour Tribunal has to be dismissed. The judgment in the Estatesand Agency Co. Ltd. v■ Perera (supra) is also an authority forthe proposition that the Minister’s reference of a dispute toarbitration whilst a Labour Tribunal Inquiry was pending is notinterference with the judicial process. I am in agreement withthe submissions of Mr. Ranganathan and I am of opinion thatwhen the Minister referred the present dispute to arbitration itdid not amount to an interference with a judicial proceeding.
For the above reasons I am of the view that the Order madeby the 3rd respondent is not ultra vires the powers conferred onhim and that it has been made bona fide. I would accordinglydismiss the application. There will be no order for costs.
ATUKORALE, J.—I agree.';• :.: t -;