THILAKARATNE

Vs.

ASSISTANT COMMISSIONER OF LABOUR, GAMPAHA

COURT OF APPEAL
GOONERATNE, J.
DR. FERNANDO, J.
CA/CPA/39/2019
HC GAMPAHA REV 11/2016
MC ATTANAGALLA 90008/LB
JULY 8, 2020

Revision-Employees' Provident Fund Act, No. 15 of 1958, as amended, sections 17, 38(2), 38(3), 47-Scope of proceedings under section 38(2)-Tests to determine employer-employee relationship-Violation of rules of natural justice

Further to a certificate filed by the respondent in the Magistrate's Court of Attanagalla, the Magistrate, after inquiry, made order directing the recovery of the sum of money stated in the certificate as Employees' Provident Fund (EPF) dues from the petitioner, under section 38(2) of the Employees' Provident Fund Act, No. 15 of 1958, as amended, in respect of several workers. The revision application filed against this order in the High Court was dismissed on failure to establish exceptional circumstances. The petitioner filed a revision application before the Court of Appeal against the judgment of the High Court claiming that he cannot be regarded as the employer of the workmen since they had worked on an estate owned by Kandy Plantations Limited and he only supplied labour services thereto and hence was not liable to pay the EPF dues.

Held:

1. The permissible defences available to a respondent in recovery proceedings under section 38(2) of the EPF Act are: (a) the respondent has paid the amount due, (b) the respondent is not the defaulter, (c) the certificate has been filed in a court that has no jurisdiction to entertain recovery proceedings, (d) the certificate does not contain proper particulars of the sum due in the manner and to the extent required by section 38(2).

2. There has to be an employer-employee relationship (contract of service) between the petitioner and the employees named in the schedule to the certificate to make the petitioner liable under section 38(2).

3. The absence of express terms in the contract does not preclude the Magistrate from inquiring into the true nature of the contract and the relationship between the workers and the petitioner.

4. The standpoint of the petitioner that he acted as a passive service provider for the supply of labour to Kandy Plantations Limited and that his involvement ended upon collecting payment from Kandy Plantations Limited to be transmitted to the workers cannot be accepted.

5. The employer-employee relationship between the petitioner and the workers has been clearly established by the application of the control test and also the integration test.

6. If the Commissioner of Labour is alleged to have exercised his discretion wrongfully in violation of the rules of natural justice, that has to be challenged by way of a writ application where the principles of administrative law are applicable. It is not a matter that can be raised in proceedings instituted before a Magistrate under section 38(2) of the EPF Act.

7. The petitioner has failed to establish exceptional circumstances amounting to a positive miscarriage of justice for intervention by way of revision under Article 138 of the Constitution.

Cases referred to:

1. Ceylon Mercantile Union v. Ceylon Fertilizer Corporation [1985] 1 Sri LR 401

2. Attorney General v. City Carriers Ltd [1991] 1 Sri LR 227
3. City Carriers Ltd v. The Attorney General [1992] 2 Sri LR 257
4. Mohamed Ameer and another v. Assistant Commissioner of Labour [1998] 1 Sri LR 156
5. Short v. J & W Henderson Ltd (1946) 62 TLR 427 at 429
6. Yewews v. Noakes (1880) 6 QBD 530 at 532
7. Stevenson Jordan & Harrison v. Macdonald & Evans (1952) 1 TLR 101
8. United States v. Silk (1946) 331 U.S. 704
9. Perera v. Marikar Bawa Ltd [1989) 1 Sri LR 347
10. Sri Lanka Insurance Corporation Limited v. Commissioner of Labour and others (SC/APPEAL/27A/2009, SC Minutes of 14.12.2016)
11. Ceylon Printers Ltd and another v. Weerakoon, Commissioner of Labour and