NORATEL INTERNATIONAL (PVT) LTD

NORATEL INTERNATIONAL (PVT) LTD

Vs.

PRASANNA PEIRIS

SUPREME COURT
ALUWIHARE, J.
DEHIDENIYA, J.
THURAIRAJA, J.
SC/APPEAL/138/2017
HC/ALT/373/2013
LT/21/2570/2009
JANUARY 14, 2020

Industrial Disputes Act, No. 43 of 1950, sections 31(c)(1), 33(1) (d), 33(5), 33(6)-Unlawful termination of employment-Payment of compensation-Calculation of compensation

The services of the employee were terminated on an allegation of theft of the employer's property. Upon an application filed by the employee against the termination, the Labour Tribunal found the termination to be unjustifiable and awarded compensation as an alternative to reinstatement to the tune of Rs.732,424/- calculated from the date of termination up to the date of the order. On appeal the High Court affirmed the order. The employer appealed to the Supreme Court.

Held:

1. Although the termination of services was unreasonable, the award of compensation calculated from the date of termination up to the date of the order of the Labour Tribunal is excessive.

2. The awarding of compensation is governed by section 33 of the Industrial Disputes Act. However none of the provisions define the manner in which the quantum of compensation should be determined. Section 31 C(1) allows the Labour Tribunal to make just and equitable orders. A just and equitable order shall not depend on the urgings of a kind heart but shall only be made within the framework of the law.

3. The quantum of compensation is generally within the discretion of the court and no definite rules can be laid down with regard to the assessment of compensation. The reason for the termination, the nature of the workman's employment, his length of service

and the employer's capacity to pay would all be relevant factors in computing the quantum of compensation.

4. The essential consideration in calculating compensation is actual financial loss and not sentimental harm caused by the unfair dismissal, because compensation is an indemnity for the loss. The burden is on the employee to adduce sufficient evidence for the Labour Tribunal to decide the loss.

5. In this case the employee admittedly found new employment after the dismissal from service. Hence he is not entitled to compensation for the entire period. Compensation equivalent to ten months' salary is adequate in this case.

Cases referred to:

1. Associated Battery Manufacturers (Ceylon) Ltd v. United Engineering Workers Union 77 NLR 541
2. Richard Peiris and Co Ltd v. D.J. Wijesiriwardena 62 NLR 233
3. Saleem v. Hatton National Bank [1994] 2 Sri LR 379
4. The Caledonian (Ceylon) Tea and Rubber Estates Ltd v. J.S. Hillman 79 (1) NLR 421
5. Bank of America v. Abeygunasekara [1991] 1 Sri LR 317
6. Jayasuriya v. Sri Lanka State Plantation Corporation (1995] 2 Sri LR379
7. Fentiman v. Fluid Engineering Products Ltd 1991 IRLR 150

APPEAL from the Judgment of the High Court.

Minoli Jinadasa with Shehara Karunatne for the Respondent-Appellant-Appellant.

Applicant-Respondent-Respondent absent and unrepresented.

cur. adv. vult.

February 13, 2020

THURAIRAJA, J.

The Employer, Noratel International (Pvt.) Ltd. formerly known as Toroid International (Pvt.) Ltd. is the Employer-Respondent-Appellant-Appellant (hereinafter sometimes referred to as the Employer-Appellant). The Employee, Mr. Prasanna Peiris is the Employee-Applicant-Respondent-Respondent (hereinafter sometimes referred to as the Employee-Respondent).

It was revealed at the Labour Tribunal that the Employee-Respondent was a technical supervisor in the production maintenance division of the said Company. He was seen on the 15/01/2001 at 0610 hrs, pouring petrol from a white can into his motorcycle. A security officer Chrishantha Nallapperuma, on seeing the incident, questioned and confronted the Employee-Respondent. Being dissatisfied with the answers he received, he produced the Employee-Respondent to t

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