A CRITICAL
EVALUATION OF THE TERMINATION OF EMPLOYMENT OF WORKMEN (SPECIAL PROVISIONS) ACT
IN LIGHT OF BALANCING THE INTERESTS OF EMPLOYERS, WORKMEN AND THE STATE
Copy Right : A. SARVESWARAN (DEPARTMENT OF
PRIVATE AND COMPARATIVE LAW)
Extended
Abstract
Background
Social security and social justice
in relation to labour relations require payment of severance compensation when
employments are terminated for non-disciplinary reasons such as retrenchment
and closure. The Industrial Disputes Act15 has provisions relating to
retrenchment,16 and termination of services.17 However, as the provisions in
the Industrial Disputes Act were inadequate to protect the interests of the
workmen from the wave of retrenchment in 1971, the government made an emergency
regulation under the Public Security Ordinance in May 197118 as a temporary
measure to control retrenchment. It has been followed by the enactment of the
Termination of Employment of Workmen (Special Provisions) Act in 1971.
Methodology
For the
purpose of this paper, salient provisions of the Termination of Employment of
Workmen (Special Provisions) Act20 and the principles emerged from relevant
cases have been evaluated to discuss to what extent the provisions of the
Termination Act and the
15 No. 43 of 1950 (as amended).
16
Sections 31E-H.
17
Section 31B(1)(a).
18
Gazette No. 14,965/12 of 06-07-1971.
19
Termination of Employment of Workmen (Special
Provisions) Act, No. 45 of 1971. Termination of Employment of Workmen (Special
Provisions) (Amendment) Law, No. 4 of 1976. Termination of Employment of
Workmen (Special Provisions) (Amendment) Act, No. 51 of 1988. Termination of
Employment of Workmen (Special Provisions) (Amendment) Act, No. 12 of 2003.
Termination of Employment of Workmen (Special Provisions) (Amendment) Act, No.
20 of 2008.
20
Hereafter it is stated as Termination Act.
principles emerged from the cases balance the
interests of employers, workmen and the State.
Salient
results and recommendations
The
Termination Act requires employers to obtain written consent of the workman21
or written approval of the Commissioner22 before termination of employment for
non-disciplinary reasons.23 The Act further provides that the Commissioner may
in his absolute discretion decide to grant or refuse approval for termination
of employment.24 If an employer is of the view that the workmen are redundant
at his workplace and it is necessary to terminate their employment in the
interests of his business, the employer should have the freedom to terminate
their employment subject to payment of compensation. Hence, it is suggested to
amend the Act to grant discretion to the employers to
terminate
employment of redundant workmen subject to payment of compensation. Termination
of services of a workman for inefficiency or incompetency is not a disciplinary
termination.25 Hence, the employers have to follow the stringent provisions to
terminate employment for inefficiency or incompetency as well. It is against
the interests of employers and the objective of the Act. Therefore, it is
suggested that the Act should be amended to cover the situations which strictly
come under lay-off, retrenchment and closure of industry.
The Act
provides that the Commissioner may order to continue to employ the workman with
back wages and other benefits for illegal termination.26 In some cases, the
Appellate Courts were of the view that the provision does not permit the
Commissioner to grant wages and benefits without making an order to continue to
employ the workman.27 It has the effect that the Commissioner cannot make an
order for payment of compensation in lieu of reinstatement for illegal
termination. If the Commissioner does not have discretion to grant compensation
in lieu of reinstatement considering the circumstances such as strained
relationship between the parties, conduct of the employee after termination,
changes in the business environment and delay in making decision, it would
affect the
21 Section 2(1)(a).
22 Section 2(1)(b).
23 Section 2(4).
24 Section 2(2)(b).
25 St. Anthony‘s Hardware Stores Ltd v. Ranjit
Kumar(1978-79) 2 Sri LR 06
26 Section 6.
27 Eksath Kamkaru Samithiya v. Commissioner of
Labour (2001) 2 Sri LR 137
interests
of the employers and the State, and sometimes the interests of the workmen as
well. In some other cases, the appellate courts have interpreted the provision
as directory to permit the Commissioner to grant wages and other benefits
without reinstatement,28 or pay compensation in lieu of reinstatement.29
However, it is suggested to amend the Act to grant discretion to the Commissioner
to award compensation in appropriate cases.
The Act expressly provides that the
inquiries under the Act should be conducted in accordance with the principles
of natural justice.30 However, it does not expressly provide to give reasons
for the decisions of the Commissioner. It has led to judicial debate and to
make conflicting decisions with regard to importance of giving reasons for
decisions under the Act.31 The recent judgments indicate that although the
Commissioner does not have a mandatory obligation to give reasons for his
decisions and his decisions would not be invalid per se for not giving reasons,
the principles of natural justice require giving reasons for decisions. As it
is important to make decisions that balance the interests of the parties, the
decisions without reasons would make the parties unable to objectively assess
whether the decisions balance the interests of the parties or not.
The
Industrial Disputes (Hearing and Determination of Proceeding) (Special
Provisions) Act32 provides a time limit of two months for making decisions by
the Commissioner under the Termination Act.33 However, this provision is not a
mandatory provision but a mere directive provision,34 and as such the
decisions
made after this time limit also would be valid. Hence, the question arises
whether this mechanism would enable the employers to take speedy measures to
make adjustments to compete with the competing industries.
There is a
question whether literal interpretation to the wordings of the Termination Act
would cover termination of services of probationers. Although there is a
judicial pronouncement35 to the effect that the terminations of probationers
are not covered under
28Lanka Multi Moulds (Pvt) Ltd v. Wimalasena,
Commissioner of Labour (2003) 1 Sri LR 143
29 Samyang Lanka (Pvt) Ltd v. Mahinda Madihahewa,
Commissioner of Labour C.A. No: 1837/2004
30 Section 17.
31Samalanka
Ltd v. Weerakoon, Commissioner of Labour (1994) 1 Sri LR 405 Karunadasa v.
Unique Gemstones Ltd (1997) 1 Sri LR 256
Ceylon Printers Ltd v. Weerakoon, Commissioner of
Labour (1998) 2 Sri LR 29
Yaseen Omar v. Pakistan International Airlines
Corporation (1999) 2 Sri LR 375
Kundanmals Industries Ltd v. Wimalasena,
Commissioner of Labour (2001) 3 Sri LR 229
Liyanage v. Commissioner of Labour (2004) 2 Sri LR
23
C&S Lanka Pvt) Ltd v. Commissioner General of
Labour C.A No: 986/2004
32 Industrial Disputes (Hearing and Determination of
Proceeding) (Special Provisions) Act, No. 13 of
2003
33 Sections 11,12 and 13. See section 2(2)(c) of the
Termination Act also.
34 See Nagalingam v. De Mel 78 NLR 231 at 239.
35 Brown & Co Ltd v. Commissioner of Labour 2002
[B.L.R] 16
the Act, it
is suggested to amend the Act to expressly exclude termination of probationers
from the coverage of the Act.
Conclusion
As discussed above the Termination
Act enacted in 1971 has provisions which do not balance the interests of the
parties, but become over protective of the interests of the workmen at the
expense of the interests of employers and the State. The provisions of the Act
enacted in 1971 in different context during the period of closed economy have
become irrelevant today. Hence, the Act should be amended as suggested above to
make the provisions to balance the interests of the parties and make it
relevant in today‘s context.
References
Brown & Co
Ltd v. Commissioner of Labour 2002 [B.L.R] 16
Ceylon Printers Ltd v. Weerakoon, Commissioner of
Labour (1998) 2 Sri LR 29 C&S Lanka Pvt) Ltd v. Commissioner General of
Labour C.A No: 986/2004 Eksath Kamkaru Samithiya v. Commissioner of Labour
(2001) 2 Sri LR 137 Gazette No. 14,965/12 of 06-07-1971
Industrial
Disputes Act, No. 43 of 1950 (as amended)
Industrial Disputes (Hearing and Determination of
Proceeding) (Special Provisions) Act, No. 13 of 2003 Karunadasa v. Unique
Gemstones Ltd (1997) 1 Sri LR 256
Lanka Multi
Moulds (Pvt) Ltd v. Wimalasena, Commissioner of Labour (2003) 1 Sri LR 143
Liyanage v.
Commissioner of Labour (2004) 2 Sri LR 23
Nagalingam v.
De Mel 78 NLR 231
Samalanka Ltd
v. Weerakoon, Commissioner of Labour (1994) 1 Sri LR 405
Samyang Lanka (Pvt) Ltd v. Mahinda Madihahewa,
Commissioner of Labour C.A. No: 1837/2004 St. Anthony‘s Hardware Stores Ltd v. Ranjit
Kumar(1978-79) 2 Sri LR 06
Termination of Employment of Workmen (Special
Provisions) Act, No. 45 of 1971 (as amended). Yaseen Omar v. Pakistan
International Airlines (1999) 2 Sri LR 375
Key Words : Workman, Women, Workers, Labour law, Labor law, Employment law,