Executive cadre strikes back

An elite group — at least compared to the rest of the workforce — of Company executives, came to Court seeking the quashing by way of writ of certiorari of a decision made by the Commissioner of Labour. The application made in the Court of Appeal (Pure Beverages Company Executive Officers’ Association v. Commissioner of Labour - SLR - 258, Vol 2 of 2001 [2000] LKCA 46; (2001) 2 Sri LR 258 (August 28, 2000)) by the Petitioner Association, as it was referred to in the judgement, made the case that the Commissioner of Labour had made an order stating that the termination of at least five Executives working for Pure Beverages Co. Ltd., was unlawful i.e: ultra vires.

The Commissioner of Labour had earlier made it as if to say he would listen to the recommendation of the Deputy Commissioner, who had asked that the officers concerned not be terminated. However, despite the fact that the executives and their Association was pleading that they could not be present at the Inquiry at the Labour Department as they needed to obtain legal advice on how they should proceed, the Commissioner made an order that the five employees be terminated. The Company duly obliged.

The case judgement notes the circumstances of the writ application in the following manner:

“The Pure Beverages Company sought to terminate its employees attached to the Kaduwela Factory. The Petitioner had come to know that, a Deputy Commissioner of Labour, was inquiring into this matter and, as some members of the Petitioner’s Association were named as persons whose employment was to be terminated, the Deputy Commissioner had intimated to the Members of the Petitioner’s Association requesting them to participate, if so desired. The Petitioner informed the Deputy Commissioner that its members cannot participate without obtaining legal opinion. However, the Commissioner of Labour had approved the termination of all persons including the members of the Petitioners Association, although the Deputy Commissioner did not recommend the termination of the members of the Petitioner Association.”

The application was for a writ of certiorari against the decision of the Commissioner of Labour regarding the five executive grade officers of Pure Beverages. They had been terminated and the Executive Officers Association was also applying for a writ of mandamus to compel the Commissioner “to take necessary action to ensure that the five persons are not terminated.” Note that it’s the Labour Department that had erred, despite the fact that it was Pure Beverages that had given the marching orders.

Pure Beverages announced in 1996 that the Company’s Kaduwela factory was to be closed down, necessitating the need to terminate employment of several hundreds of employees. The Respondent Company, the franchised manufacturers of Coca-Cola, Fanta etc. cited loss of revenue and had indicated that the closure of the Kaduwela factory was imperative.

Though the Petitioner Association made representations to the Minister of Labour and had requested the Minister to intervene for arbitration proceedings to be commenced in the matter of their retrenchment, there was no response either from the Minister or from the Company Management. However, through the other Unions they learnt that their fates were already decided, along with other employees in the non-executive grades at the Labour Department inquiry.

The Petitioner Association therefore requested the intervention of the Minister of Labour to affect a settlement.

Despite the fact that the Petitioner Association also wrote to the Commissioner of Labour claiming they couldn't participate in the Inquiry, it appears that the Labour authorities went ahead with the Inquiry. It has been decided to terminate the employment of some 350 persons in the Company workforce.

The Appeal Court judgement states:

“The Petitioner Association sent the letter dated 30.09.1997 to the Commissioner and this letter has been marked P 11. The said letter among other things stated as follows. “We are shocked to learn that you have decided to approve the termination of employment of our members too. We find that the names of five of our members are included in your decision. They are P. Gangodage, B.K.S.L.W Gunewardena, K. Gunasekera, M.S. Sunil and Mrs. S.R.S.W Mahanamahewa. We have not received a copy of your decision. Please let us have a copy of the decision.”

The respondent Company was indifferent to all this and proceeded with the termination of employment of the five executive officers of their Company, Pure Beverages Ltd.

The Termination of Employment of Workmen Act states

“The proceedings at any inquiry held by the Commissioner for the purposes of this act may be conducted by the Commissioner in any manner, not inconsistent with the principles of natural justice, which to the Commissioner may seem best adapted to elicit proof or information concerning matters that arise at such inquiry.”

The Court of Appeal was emphatic that this Section 17 mandate for the principles of natural justice, which is expected to be adhered to, had been breached grievously with the Labour Commissioner not giving sufficient notice to the Petitioner Association of their Inquiry.

Court observed quite ruefully that the “inquiry had already taken place” when the Petitioner Association was finally informed by Pure Beverages that they could participate in the Inquiry process if they so desired.

This indicated that the respondent Company had attempted to keep the Petitioner out of the inquiry process, most likely due to the fact that the Petitioner Association’s membership allegedly knew ‘the inside story’ about why the Kaduwela factory was being closed. At least that’s how the Petitioner Company made submissions, making it clear that they had been kept out of the inquiry due to ulterior motives.

The Court record states:

“It was on 07.01.1997 that the affected members were officially informed by the Respondent Company requesting them to participate on 08.01.1997 if they so desired (vide PB). Therefore it would appear that the Respondent Company had attempted to keep the Petitioner Association and the affected members out of the said inquiry, perhaps for reasons best known to the Respondent Company. However, the Petitioner Association and the affected members complained that they were kept out since they were more knowledgeable than the employees of the other two Unions on the question of justification or otherwise of the closure of the Kaduwela factory.”

The Appeal Court judgement states that the Deputy Commissioner of Labour had not taken the inquiry lightly — and that was imperative as the ‘bread and butter of employees was at issue.’ However, though the Commissioner had required that the Petitioner Association be intimated about the inquiry well in time, this was not done by the Respondent Company Pure Beverages.

It was also submitted by the learned Counsel for the Petitioner that there was a serious contradiction between the recommendations of the Deputy Commissioner and the decision of the Commissioner dated 24.09.1997.

“Having regard to the aforesaid reasoning and the closure of the Kaduwela Bottling plant, I approve the recommendations made by the Deputy Commissioner of Labour (Industrial Relations). The parties be informed accordingly,” the Appeal Court judgement held.

Earlier, during submissions to Court Counsel for the respondents submitted that there was an ouster Clause in the legislation (Section 2(2) (f) of the Termination of Employment of Workmen Act) that indicated that the decision of the Commissioner was final and that it was not subject to Writs, but the Court of Appeal cited decided cases indicating that if the decision itself was a nullity because the process through which it was arrived at was flawed, it made the ouster clause so-called, inapplicable.

The Court of Appeal judgement states:

“In the case of Anisminic Ltd. Vs. Foreign Compensation Commission (1969 2C 147) majority of judges held that the wrong decision of the commission on what they regarded as a “jurisdictional fact” vitiated the decision since the tribunal had exceeded its jurisdiction by this wrong decision. The ouster clause, therefore, was not applicable as there was no true determination by the tribunal as required by the statute.”

The applications for writs of certiorari and mandamus were allowed.