MALINI DE SILVA

Vs.

SIVASAMY

SUPREME COURT
JAYAWARDENA, J.
DEHlDENIYA, J.
FERNANDO, J.
SC/APPEAL/25/2017
SC/HCCA/LA/27/2015
HC/ALT/23/2014
LT 36/2394/2012
OCTOBER 25, 2018

Industrial Disputes Act, sections 318(3)(b), 31C(1), 33(1)(d), 33(6)-Unlawful termination of employment-Calculation of compensation

The workman was a Kankani in an estate. His employment was terminated on the basis that he had set fire to a storeroom and committed theft. He filed an application in the Labour Tribunal seeking relief for unlawful termination of services. On the application of the employer, the inquiry before the Labour Tribunal was suspended under section 31 B(3)(b) of the Industrial Disputes Act until the conclusion of the Magistrate's Court proceedings initiated against the workman. After trial, he was acquitted by the Magistrate's Court nearly seven years after the termination of services. The inquiry before the Labour Tribunal resumed and, nine years after the termination of services, the Labour Tribunal found the termination to be unlawful and awarded the workman a sum of Rs. 390,000 as compensation in lieu of reinstatement, being five years' salary computed on the basis of an average daily wage of Rs. 250. On appeal, the High Court affirmed the order of the Labour Tribunal. The employer appealed to the Supreme Court complaining that the compensation awarded is excessive.

Held:

1. Although section 33(1)(d) of the Industrial Disputes Act stipulates the awarding of compensation in lieu of reinstatement, it does not stipulate the manner in which the quantum of compensation should be computed.

2. The Labour Tribunal is required to make a "just and equitable" order in terms of section 31 C(1) in determining the quantum of compensation; "just and equitable" b0th towards the workman as well as the employer.

3. The determination of compensation should be based on the facts and circumstances of each case without being restricted to a specific number of years as a ceiling in computing compensation.

4. A workman whose services were terminated is under a duty to mitigate his losses by finding alternative employment. However, the adverse implications of pending criminal proceedings before the Magistrate's Court on allegations of theft made it difficult for the workman to secure alternative employment.

5. The workman was 45 years old at the time of termination and 54 years old at the time the order of the Labour Tribunal was delivered. Hence, obtaining employment similar to the status of a Kankani, which is heavily dependent on physical strength, would be difficult as the workman was nearing the age of retirement.

6. Considering the implications of the pending criminal proceedings before the Magistrate's Court and the age of the workman at the time of termination in securing alternative employment, the type of employment the workman engaged in, the number of years of service provided to the employer, and the age of the workman at the conclusion of the inquiry before the Labour Tribunal, the award of five years' salary as compensation in lieu of reinstatement at an average daily wage of Rs. 250 is not excessive.

Cases referred to:

1. Ceylon Transport Board v. Wijeratne (1975) 77 NLR 481
2. Merril J. Fernando & Co v. Deiman Singha [1988] 2 Sri LR 242
3. Ceylon University Clerical and Technical Association v. University of Ceylon (1968) 72 NLR 84 at 90
4. Manager, Nakiadeniya Group v. Lanka Estate Workers' Union (1969) 77 CLW 52 at 54
5. Ceylon Tea Plantations Co Ltd v. Ceylon Estates Staffs' Union (SC 211/72, SC Minutes of 15.5.1974)
6. Hatton National Bank v. Perera [1996] 2 Sri LR 231 at 237
7. Shri Chatrapati Shivaji Sahakari Ltd v. Bhokare [1966) ICR 86
8. Silva v. Kuruppu (SC/182/69, SC Minutes of 14.10.1971)

APPEAL from the Judgment of the High Court of Badulla.

Ranga Dayananda for the Respondent-Appellant-Appellant.

Kamal Suneth Perera for the Applicant-Respondent-Respondent.

cur. adv. vul