The entitlement to gratuity for an employee terminated due to alleged fraud must be assessed by the Labour Tribunal, not merely by the Labour Commissioner, underscoring the necessity of due process in claims of misconduct.

JUDGMENT

B. Sasi Mahendran, J.

The Petitioner instituted this application by petition dated 08.06.2023 seeking inter alia a Writ of Certiorari quashing the decision contained in the Documents marked as P2 and P16 (d) and prohibiting Respondents from taking further steps in relation to gratuity.

The facts of this case are briefly as follows:

The Petitioner, Lanka Milk Foods (CWE) Ltd is a company engaged in the production and distribution of dairy products which is duly incorporated under the Companies Act No. 7 of 2007. The Petitioner states that the 5th Respondent joined the Petitioner Company on 1st June 2005 as a Sales Representative and worked in the same position until his termination on 28.01.2019.

The Petitioner states that, between September 2018 and January 2019, the Petitioner received various complaints about the misappropriation of Company money and/or goods and fraudulent practices engaged by the Area Sales Managers, Distribution Agents and Sales Representatives. Upon inquiries, it was revealed that the 5^th Respondent also had aided and abetted such fraudulent activities.

The Petitioner further states that while the investigations were ongoing, the 5th Respondent submitted a letter on 31.12.2018 marked P8 to the Director Operations of the Company stating that K.A.P.K. Kularathne, the Acting Field Sales Manager also the Area Sales Manager of the Company committed the fraudulent acts and/or the misappropriations over a period of time and sought that the officers who have been involved in such fraudulent activities be punished.

The Petitioner avers that thereafter, investigations were initiated which revealed that the 5th Respondent has aided and abetted the fraudulent activities during the time period he was working under the said Area Manager. On these grounds, the Petitioner terminated the service of the 5th Respondent by letter dated 28.01.2019 marked as P3.

The Petitioner avers that subsequent to the investigations, it was revealed that the value of total loss incurred to the Petitioner due to the fraudulent activities of the said group of employees including the 5th Respondent amounts to Rs. 20,102,187.03.

The Petitioner further states that the value of such misappropriation as stated in the said letter marked P8 was corroborated by the letter marked P7 sent by the Owner of ‘Sanduni Distributors’.

The Petitioner has lodged complaints in the Criminal Investigation Department and the Crimes Division of the Mahabage Police Station against the said group of employees including the 5th Respondent for criminal breach of trust, criminal misappropriation, fraud, and undue enrichment on 16.08.2019.

The 5th Respondent has made an application to the Labour Commissioner in terms of the Payment of Gratuity Act No. 12 of 1983 as amended (hereinafter referred to as the Gratuity Act) to determine the quantum of gratuity payable by the Petitioner. On 17.09.2019, the Petitioner received a Notice signed by the 4th Respondent requesting the Petitioner to participate in an inquiry on 02.10.2019 based on the allegation of non-payment of gratuity to which a representative of the Petitioner company participated and submitted the requested documents.

By letter dated 14.10.2019, the Petitioner informed the 1st to 4th Respondents that all the necessary documents have been tendered to them on their request, and according to the law, the issue on forfeiture should be canvassed in the Labour Tribunal therefore, requested the Respondents to direct the 5th Respondent to file an application in the Labour Tribunal.

The Petitioner states that several correspondences were exchanged between the Petitioner and the Respondents among which the letter dated 04.03.2020 marked P16(d) sent by the 4th Respondent notified the Petitioner to deposit an amount of Rs. 281,385/- as gratuity payable to the 5th Respondent. Further, to the utter dismay of the Petitioner, by letter dated 10.11.2022 marked as P2, the 2nd Respondent conveyed its decision that the 1st to 4th Res