CONSOLIDATED MARINE ENGINEERS LTD

CONSOLIDATED MARINE ENGINEERS LTD

Vs.

ASSISTANT COMMISSIONER OF LABOUR (COLOMBO SOUTH) AND OTHERS

COURT OF APPEAL
J. DE SILVA, J.
FERNANDO, J.
CA/WRIT/28/2012
MARCH 18, 2019

Writs of certiorari and prohibition-Liability to pay Employees' Provident Fund dues-Employee or independent contractor-Applicable tests-Inquiry by Commissioner of Labour-Procedural fairness-Grounds on which court will review errors of fact

The petitioner had obtained the services of a security company and the 4th to 6th respondents were working as security guards in the petitioner's premises under that security company. Later the 4th to 6th respondents resigned from the security company and formed a group of their own under the 4th respondent, who offered to provide the petitioner security services on a contract basis. The petitioner accepted the offer and agreed to pay a fixed monthly amount to the 4th respondent for the services provided, as in the case of the contract for security services with the earlier company. This arrangement continued for seven years. The 4th to 6th respondents complained to the Commissioner of Labour that the petitioner had not paid their Employees' Provident Fund (EPF) dues. At the inquiry conducted by the 1st to 3rd respondents, the petitioner raised a preliminary objection that the 4th to 5th respondents were not "employees" within the meaning of the Employees Provident Fund Act (EPF Act). The objection was overruled. The inquiry continued with the recording of

evidence of the 4th to 6th respondents. After the conclusion of the inquiry, the petitioner received a letter/certificate directing it to pay a sum of Rs. 717,522.48 as EPF dues. The petitioner sought to challenge this decision in the Court of Appeal on the basis that the 1st to 3rd respondents were wrong to have overruled its preliminary objection and on the ground that the petitioner had not been afforded a fair hearing inter alia by not being allowed to cross-examine the witnesses.

Held:

1. The characterisation by the parties of the nature of the contract between them is not determinative. The courts have adopted different tests such as the control test, integration test and economic reality test to ascertain the true nature of the relationship between the parties. Applying each of these tests leads to the conclusion that the 4th to 6th respondents failed to prove that they were employees of the petitioner.

2. Generally, courts exercising judicial review do not review errors of fact made by administrative bodies/officials, unless those errors of fact are linked to the assumption of the administrative body's jurisdiction i.e. jurisdictional errors of facts. One exception to this general principle is the 'no evidence rule'. In effect, the no evidence rule has opened up a very narrow path for courts to review non-jurisdictional errors of fact.

3. The conclusion of the 1st to 3rd respondents that there is a contract of service between the petitioner and the 4th to 6th respondents is not supported by the evidence led at the inquiry. Accordingly, the determination made by the 1st to 3rd respondents is liable to be quashed on the basis of the no evidence rule.

4. The record shows that the evidence of the 4th to 6th respondents was taken in the absence of the petitioner. Where evidence is taken without the knowledge of a party and without giving that party an opportunity of responding, there is no fair hearing.

5. It is not imperative to provide for cross-examination in all instances for there to be a fair hearing. Whether cross-examination must be allowed depends on the circumstances of each case. In an inquiry such as this, the Commissioner General of Labour is not exercising judicial power in a strict sense. Even though at the conclusion of the inquiry the Commissioner General can make an application

to the Magistrate's Court in terms of section 3

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