050-SLLR-SLLR-1996-V-2-UP-COUNTRY-DISTRIBUTORS-PVT-LTD-.-V.-SUBASINGHE.pdf
UP COUNTRY DISTRIBUTORS (PVT) LTD.,V.
SUBASINGHE
SUPREME COURT.
P.S.DE SILVA, C.J.,
RAMANATHAN, J. ANDWIJETUNGA.J.
S.C.APPEAL NO. 111/95.
S.C. APPEAL L.A. NO.296/95.
C. LT APPEAL KANDY NO. 75/94.
T. NO. 10/246/91.
20TH AUGUST, 1996.
Termination of services of Workman-Compensation in lieu of reinstatement-industrial Disputes Act-Section 33(5) of the Act-Assessment of Compensation-Discretion of the Labour Tribunal.
The Respondent workman applied to the Labour Tribunal for relief in respect ofthe termination of his services by the Appellant company and prayed forreinstatement with back wages or compensation in lieu of reinstatement. Theworkman was 42 years of age and was in receipt of benefits amounting toRs.5,000/-, at the time of termination. He had 15 years of service. The Tribunaldecided that the termination was unjust and awarded Rs.300,000/- being 5 years'wages, as compensation having regard, in particular to the workman's period ofunemployment, his age at termination and the period of his service.
Held:
The award made by the tribunal is just and equitable. The tribunal fias a discretionin determining the quantum of compensation, on the basis of the facts andcircumstances of each case. That discretion should not be unduly fettered.
PerWijetunga, J.
* The legislature has in its wisdom left the matter in the hands of the tribunal,presumably with the confidence that the discretion would be duly exer-cised. To my mind some degree of flexibility in that regard is both desirableand necessary if a tribunal is to make a just and equitable order".
Cases referred to:
Silva v. Kuruppu S.C. 182/69 S.C. Minutes 14th October 1971.
The Ceylon Transport Board v. Wijeratne (1975) 77 NLR 481, 496.
Nanayakkara v. Hettiarachchi, (1971) 74 NLR 185.
The Caledonian (Ceylon) Tea & Rubber Ltd., v. Hillman, (1977) 79(1) NLR421.
The Associated Newspapers of Ceylon Ltd., v. Jayasinghe (1982) 2 Sri
R. 595.
Jayasuriya v. Sri Lanka State Plantations Corporation, (1995) 2 SLR 379
APPEAL from the judgment of the High Court.
R.K.S. Sureschandra for AppellantNimal Malalasekara for Respondent.
Cur.adv.vult.
30th September, 1996.
WIJETUNGA, J.
This is an appeal from the judgment of the Provincial High Court ofKandy dismissing the appeal of the Respondent-Appellant-Appellant('Appellant').
The Applicant-Respondent-Respondent ('Respondent') made anapplication to the Labour Tribunal, Hatton alleging that his serviceshad been wrongfully terminated by the Appellant Company and prayedthat he be reinstated with back wages or be paid a sum of Rs.500.000/-as compensation in lieu of reinstatement.
The Appellant filed answer stating that the Respondent wasdismissed on disciplinary grounds after due inquiry, as he had beenfound guilty of the acts of misconduct alleged against him, which causedthe Appellant to lose confidence in him. It was averred that thetermination was bona fide and for good and valid reasons, and wasjustified. The Respondent filed a replication denying the position takenup by the Appellant in the answer.
The learned President of the LabourTribunal held that the terminationwas unjust and awarded the workman compensation in a sum ofRs.300,000/-.
The Company appealed against the said order to the ProvincialHigh Court of Kandy. That Court, by its judgment dated 22.8.95,dismissed the appeal, feeing aggrieved by the said judgment of theHigh Court, the Appellant made an application to this Court for specialleave to appeal. Special leave was granted only in respect of the matterset out in paragraph 9(f) of the petition which reads as follows:-
"The learned High Court Judge failed to consider the fact that thelearned President of the Labour Tribunal had failed to give the basis ofthe award of compensation in favour of the Respondent".
It is relevant to state that the learned President in his order didtake into account the period of unemployment of the Respondentresulting from the termination aforesaid and computed the compensationon the basis that the Respondent's monthly salary was Rs.5,000/- andgranted him five years' salary as compensation.
The High Court subjected the basis of the learned President'scomputation of compensation to careful scrutiny. It made pointedreference to the delay of about 21 months between the conclusion ofthe hearing and the delivery of the order (which the learned Presidenthimself had mentioned regretfully in his order as being due to his ill-health) and observed that the order does not indicate whether thePresident teok into account only the period of about one year betweenthe commencement of proceedings and the conclusion of evidence, forthe purpose of such computation, or whether the 21 months that hadelapsed before the order was delivered was also takeg into account.The High Court said that it had no doubt that the learned President hadgiven due consideration to the authorities cited by counsel. It furtheradverted to the relevance, in considering the question of quantum ofcompenstion, of.the fact that the Respondent was only 42 years of ageand that he had admittedly served the Appellant Company from 1975for a period of about 15 years at the stage of termination. These werethe factors that led the High Court to the view that the award ofRs.300,000/- was just and equitable and not excessive, in thecircumstances.
In Silva y. Kuruppi/" Samarawickrema, J. observed that the"assessment of compensation is eminently a matter within the provinceof the President of the Labour Tribunal."
As Vythialingam, J. stated in The Ceylon Transport Board v.Wijeratnef2) “although our Industrial Disputes Act provides for thepayment of compensation in lieu of reinstatement, it does not lay downthe basis on which it is to be computed. In this connection it is importantto remember that where this is so much a matter for the exercise ofthe Tribunal's discretion and depends on the peculiar facts andcircumstances of each individual case, it is undesirable to confine thatdiscretion within too narrow and rigid limits."
However, a number of decisions of the Supreme Court have laiddown what should be taken into consideration in determining thequantum of compensation payable under section 33(5) of the IndustrialDisputes Act.
In Nanayakkara v. Hettiarachchi{3) Wijayatilake, J. considered theworkman's age, the number of years of service, the benefits receivedfrom the employer and the capital of the business in determining thequantum of compensation.
I n Wijeratne's case (supra) where the learned tribunal had awardedthe workman the full salary for the balance workspan till he reachedthe age of superannuation as compensation, Vythialingam, J. havingmade a comprehensive analysis of the case law relevant to thisquestion, disagreed with that mode of computation and staled at page498 that ‘account should be taken of such circumstances as the natureof the employer's business and his capacity to pay, the employee'sage, the nature of his employment, length of service, seniority, presentsalary, future prospects, opportunities for obtaining similar alternativeemployment, his past conduct, the circumstances and the manner ofthe dismissal including the nature of the charge levelled against theworkman, the extent to which the employee's actions were blameworthyand the effect of the dismissal on future pension rights and any otherrelevant considerations. Account should also be taken of any sumspaid or actually earned or which should also have been earned sincethe dismissal took place."
•
In Caledonian (Ceylon) Tea & Rubber Estates Ltd. v. Hillmari^Sharvananda, J. (as he then was) agreed with Vythialingam, J. that"the amount however should not mechanically be calculated on thebasis of the salary he would have earned till he reached the age ofsuperannuation."
In The Associated Newspapers of Ceylon Ltd. v. Jayasinghd5) Soza,
observed at page 600 that "the object of the exercise should be toascertain as far as possible the money equivalent of the loss ofemployment from the date of unjust dismissal. The calculation must•depend on the particular circumstances of each case. Wages canprovide a useful unit for the calculation but it Is neither possible nordesirable to lay down a formula for application in all cases."
More recently, in Jayasuriya v. Sri Lanka State PlantationsCorporation this Court dealt exhaustively with the matters relevant tothe determination of the quantum of compensation.
Amerasinghe, J. stated that "there ought to be at least anapproximate computation of immediate loss, i.e. loss of wages andbenefits from the date of dismissal upto the date of the final Order orJudgment, and another with regard to prospective, future loss, and athird with regard to the loss of retirement benefits, based as far aspossible on a foundation of solid facts given to the Tribunal by theparties.
While it is not possible to enumerate all the circumstances thatmay be relevant in every case, it may be stated that the essentialquestion, in the determination of compensation for unfair dismissal isthis: What is the actual financial loss caused by the unfair dismissal?
. With regard to financial loss, there is, first, the loss of earningsfrom the date of dismissal to the determination of the matter before theCourt, that is, the date of the Order of the Tribunal, or if there is anappeal, to the date of the final determination of the appellate court.The phrase 'loss of earnings' for this purpose would be the dismissedemployee's pay (net of tax), allowances, bonuses, the value of the useof a car for private purposes, the value of a residence and domesticservants and all other perquisites and benefits having a monetary valueto which he was entitled."
It is thus evident that the appellate courts have, over the years,laid down guidelines in regard to assessment of compensation. Yet, inmy view, the tribunal's discretion should not be unduly fettered in thatprocess. The particular facts and circumstances of each case havean immeasurable bearing on the question of quantum of compensationpayable. The legislature in its wisdom has left that matter in the handsof the tribunal, presumably with the confidence that the discretion wouldbe duly exercised. To my mind, some degree of flexibility in that regardis both desirable and necessary if a tribunal is to make a just andequitable order.
In the instant case, the learned President has specifically referredto the Respondent's period of unemployment, the salary drawn by himat the stage of termination and awarded him five years salary by wayof compensation. The proceedings had before the tribunal did focusattention on the fact that the Respondent had admittedly been in servicefor about 15 years. Witness Kandiah, the Executive Director of theAppellant Company has admitted in evidence that the total benefitsthat the Respondent received for a month were about Rs.5,000/-. Theattention of the tribunal had also been drawn to the fact that theRespondent was 42 years of age at the time of termination. The relevantcase law on the question of computation of compensation too hadbeen placed before the tribunal.
Although the learned President has not itemized each and everyone of these matters in his order, the High Court observes that it hasno doubt that the President had given due consideration to theauthorities cited, in arriving at his decision as regards the quantum ofcompensation.
It would, therefore, be idle to contend that the tribunal had failed togive the basis of the award of compensation; however, it must beemphasized that the tribunal should have dealt with the criteria relevantto the computation of compensation in more explicit terms, thus "takingthe award beyond the realm of mere assurance of fairness"-perAmerasinghe, J. in Jayasuriya'scase (supra).
The learned High Court Judge has carefully considered the questionof quantum of compensation in the light of the relevantauthorities andhas rightly come to the conclusion that the award was a just and equitableone.
In these circumstances, I see no reason to interfere with the order.The appeal is accordingly dismissed with costs.
G.P.S. DE SILVA, C.J. -1 agree.
RAMANATHAN, J. -1 agree.
Appeal dismissed.