021-SLLR-SLLR-2007-V-2-NATIONAL-INSURANCE-CORPERATION-v.-WIJESINGHE.pdf
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National Insurance Corporation v
Wijesinghe
263
NATIONAL INSURANCE CORPORATIONv
WIJESINGHESUPREME COURT
DR. SHIRANI BANDARANAYAKE, J.
AMARATUNGA, J.
SOMAWANSA.J.
SC 97/2006SC Spl LA 93/06HCALT 936/2005LT/1/Add – 116/2002JUNE 5, 2007
Industrial Disputes Act – Section 31 B (1), Section 31 B (1) (a) – Grantingof extensions upto 60 years – Employee retires – Jurisdiction of the LabourTribunal – Retirement and termination by employer?
The applicant-respondent alleged that the appellant employer hadconstructively terminated his service by not granting further extensions ofservice upto 60 years. The position of the appellant-employer was that therespondent retired from the service upon the expiration of his extension ofthe services for one year and that the services were not terminated, but thatthe employee had retired, therefore the Labour Tribunal did not havejurisdiction to entertain the application. The Labour Tribunal held that theservices were terminated unfairly and awarded him compensation, the HighCourt upheld the order of the Labour Tribunal. On appeal, to the SupremeCourt,
Held:
The application related to an alleged constructive termination ol therespondent's services – Section 31B (1) (a) of the Industrial Disputes Actand in terms of the provisions of the said Act the Labour Tribunal has nojurisdiction to entertain an application unless there has been a terminationof services of the workman by the employer.
The respondent's own conduct further establishes that he accepted thedecision of the employer to retire him by not granting any furtherextensions, for which the respondent was informed in writing that he
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would not be granted the second extension, the respondent neitherappealed nor protested to the employer-appellant that he had a rightto work until he reached 60 and to re-consider its decision.
Held further:
The respondent workman had no legal right to invoke the jurisdiction ofthe Labour Tribunal and in terms of the Section 3l6(1)a – the LabourTribunal had no jurisdiction to entertain the respondent's application.
APPEAL from the judgment of the High Court of Colombo.
Case referred to:
(1) Gunaratne v De Zylva SC 463/87 SCM 17.9.68
Gomin Dayaslri with Chanaka de Silva and Ms. Manoli Jlnadasa for
appellant.
P.L.S. Bandara with Iranga Siriwardane for respondent.
Cur.adv.vutt.
September 07, 2007
ANDREW SOMAWANSA, J.The applicant-respondent-respondent (hereinafter referred toas the respondent) filed an application in the Labour Tribunal ofColombo alleging interafia that the respondent-petitioner-petitioner (hereinafter referred to as the petitioner) hadconstructively terminated his services by not granting him furtherextensions of service up to the age of 60 years and prayed forarrears of salary related to the period he claimed he would havebeen able to continue in employment and compensation forwrongful termination.
The position of the petitioner was that the respondent retiredfrom the service of the petitioner on 13.12.2001 upon theexpiration of his extension of service for one year and that theservice of the respondent was not terminated but that he retired.Thus the respondent was not entitled to have and maintain thisinstant application before the Labour Tribunal and moved for adismissal of the same.
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National insurance Corporation v
Wiieslnahe tAndrew Somawansa. J.J
265
After an inquiry the learned President of the Labour Tribunalof Colombo delivered his order on 25.01.2005 holding that theservices of the respondent was unfairly and unjustly terminatedand awarded him compensation of 12 months salary amountingto a sum of Rs. 227,052/-
The petitioner lodged an appeal from the aforesaid order tothe High Court of the Western Province holden in Colombo andthe High Court Judge of the Western Province by his judgmentdated 03.03.2006 affirmed the order of the learned President ofthe Labour Tribunal.
The petitioner thereafter sought leave to appeal from theaforesaid judgment of the High Court Judge of the WesternProvince and this Court has granted special leave to appeal fromthe said judgment on the questions of law as set out inparagraphs ‘o' and 'p' of paragraphs 8 of the petition of thepetitioner dated 10.04.2006 which reads as follows:
(o)Did the learned High Court Judge fail to appreciate thatthe Labour Tribunal had no jurisdiction to entertain theapplicant's application?
(p)Did the learned High Court Judge, having made a findingthat it was the petitioner's discretion to refuse extendingthe services of the applicant by one year, err in law andmisdirect himself in concluding that the retirement of theapplicant consequent to non-extension of employmentamounted to a termination by the petitioner of theapplicant's services?
It is to be seen that the jurisdiction of the Labour Tribunal isconferred by Section 31 B(1) of the Industrial Disputes act whichstates as follows:
31 B(1) UA workman ora trade union on behalf of a workmanwho is a member of that union, may make an application inwriting to a Labour Tribunal for relief or redress in respectof any of the following matters:
the termination of his services by his employer.
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the question whether any gratuity or other benefits aredue to him from his employer on termination of hisservices and the amount of such gratuity and the natureand extent of any such benefits:
such other matters relating to the terms of employment,or the conditions of labour, of a workman as may beprescribed. “
As the instant application related to alleged constructivetermination of the respondent's services the applicable sectionwould be Section 31 B(1) (a) of the Industrial Disputes Act and interms of the said section the Labour Tribunal has no jurisdictionto entertain an application unless there has been a termination ofservices of the workman by the employer. In the case ofGunaratne v De ZylvaW this Court held that in order to make anapplication under Section 31 B(1)(a) there must be a terminationin law.
It is to be seen that the respondent's own testimony before theLabour Tribunal clearly demonstrates that the retiring age ofemployees of the petitioner company is 55 years and if anyemployees desired to continued in service after reaching the ageof 55, such an employee had to make an application to thepetitioner requesting an extension of service for a period of oneyear at a time. However it is apparent that extensions of servicewere not given automatically but must be applied for and eventhen such an application can be made only for a period of oneyear and the approval of the extension of service is at thediscretion of the petitioner's management. In the circumstances,there was no automatic right to serve in the petitioner's companyup to 60 years. In the instant case the respondent in his evidenceadmits that prior to reaching the age of 55 years he applied foran extension of his services for one year and the petitioner'smanagement approved the same. However when the respondentmade a further application for his second extension prior to theexpiry of his first extension of service the respondent wasinformed by the petitioner that a further extension of servicewould not be granted.
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National insurance Corporab'on v
Wiiesinahe (Andrew Somawansa. J.)
267
In fact, the respondent's own conduct further establishes thathe accepted the decision of the petitioner to retire him by notgranting any further extensions. For when the respondent wasinformed in writing that he would not be granted the secondextension of service the respondent neither appealed norprotested to the petitioner that he had a right to work until hereached the age of 60 years and to re-consider its decision. Infact his subsequent conduct clearly establishes that not only didthe respondent accept the decision of the petitioner to retire himat the expiry of the first extension of service but that he actedupon it by writing several letters to the petitioner companymanifesting his intention to retire. By letter dated 12.11.2001marked R1 the respondent requested the petitioner to furnishhim with his balance leave entitlements and also inquired as towhether any payment would be made in lieu of his unutilisedannual leave. He further requested the petitioner to take chargeof all documents in his custody as he intend taking leave beforeretiring. By his letter dated 29.11.2001 marked R2 addressed tothe petitioner the respondent states that as he is due to retirefrom service of the corporation with effect from 13.12.2001 hewould consent to the deduction of the balance sums of moneydue from him on all loans taken by him from the petitioner fromhis gratuity dues. Thus it could be seen that documents R1 andR2 clearly establish that the respondent had every intention toretire and had accepted the petitioner's decision not to extend hisservices by another year beyond his retiring age.
Counsel for the respondent contended that the learnedPresident of the Labour Tribunal as well as the learned HighCourt Judge have correctly come to the conclusion that someothers worked until the age of 60 years and the application of therespondent for a further extension of service for one year shouldhave been considered properly, duly and fairly. I am unable toagree with the aforesaid conclusion for the reason that therespondent has failed to produce any evidence whatsoevereither documentary or oral to establish his assertion that theretiring age for employees of the petitioner was 60 years and not55 years. In fact the petitioner in his evidence admits that if hedid not submit the application for extension he would have retiredfrom service upon reaching the age of 55 years. The contention
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that others worked until the age of 60 years is also not supportedby any evidence either oral or documentary. Though therespondent alleged that other employees had worked until 60years surprisingly he failed to give any particulars as to whothese other workers were in his examination-in-chief. Insteadunder cross-examination he conceded that several employeeswho worked with him were not granted extension of service untilthe age of 60. Strangely however in re-examination therespondent mentioned for the very first time that there wereabout 5 employees who had been granted extensions but wasable to give the name of only one such employee whose serviceshe claimed had purportedly been extended until the age of 60.This item of evidence introduced at the time of re-examinationand without being tested for its veracity under Cross-examinationcannot be relied upon to come to the conclusion that othersworked until 60. Unfortunately, the learned President of theLabour Tribunal as well as the High Court Judge has erroneouslyrelied very heavily upon this very item of un-corroboratedstatement of fact in arriving at the conclusion that others haveworked until 60.
It was also contended by counsel for the respondent that therespondent was granted a distress loan by the petitioner whichwas to be re-paid on 72 installments ending in 2005. However itis to be seen that the respondent himself has admitted in hisevidence that this loan was subject to the specific condition thatthe balance due on the loan had to be re-paid upon retirement ortermination of service. It is to be noted that by document R2 therespondent had requested the petitioner to deduct the balancesums of money due on all loans taken by him from hisgratuity.
It was the respondent's burden to establish that the retiringage was 60 years which the respondent has failed to discharge.In the circumstances, there was no evidence of legitimateexpectation for him to work until 60 years of age.
Evidence led at the inquiry as well as the subsequent conductof the respondent clearly demonstrates that the respondent wasretired from his services. Thus he ceased to be an employee olthe petitioner by virtue of his retirement and not because of
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National Insurance Corporation v
Wijesinghe (Andrew Somawansa, J.)
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termination of service by his employer the petitioner.
In the circumstances, the respondent had no legal right toinvoke the jurisdiction of the labour Tribunal as he had failed tosatisfy the requirements as set out in Section 31 (B(1)(a) of theIndustrial Disputes Act and also in terms of the said Section theLabour tribunal had no jurisdiction to entertain the respondent'sapplication. Thus it appears that the learned President of theLabour Tribunal had erred in coming to a conclusion that therewas termination when in fact the evidence conclusively showsthat it was retirement and not termination. The learned HighCourt Judge had also affirmed the order of the Labour Tribunalwithout considering this aspect of the matter. As such the orderof the learned President of the Labour Tribunal as well as thejudgment of the learned High Court Judge are perverse andcannot be permitted to stand.
For the aforesaid reasons I would answer the aforesaid twoquestions of law in the affirmative. In the circumstances I allowthe appeal and set aside the judgment of the learned High CourtJudge dated 03.03.2006 and also the order of the LabourTribunal dated 25.01.2005. I also dismiss the application of therespondent tendered to the Labour Tribunal. In all thecircumstances, I make no order as to costs.
DR. SHIRANI BANDARANAYAKE, J. – I agree.AMARATUNGA, J.- I agree.
Appeal allowed.
Order of the Labour Tribunal and the judgment of the High Courtset aside.