Industrial Disputes Act: Curiously Worded Labour Legislation

for Promotion of Industrial Peace in Sri Lanka

A. Sarveswaran

Department of Private and Comparative Law, University of Colombo, Colombo – 03

Extended Abstract
Background

Industrial Disputes in workplaces affect employers, workers and the State. The disputes have
an impact on employer-employee relationship, employee satisfaction, productivity, enterprise
performance, investment and socio-economic development in the country. Therefore, the
Industrial Disputes Act has been enacted, inter alia, to provide for establishment of Labour
Courts1 for settlement of industrial disputes and promote industrial peace in the country. The
Act has ‘words’ and ‘phrases’ that have been carefully chosen and curiously worded to
empower the Labour Courts.2

Objectives

The objectives of this paper are to identify the key words and phrases in the Industrial
Disputes Act and to assess whether the provisions that expressly require the Labour Courts to
make just and equitable decisions are adequate to make such decisions or the provisions that
enable the Labour Courts to make just and equitable decisions depending on other related
provisions of the Act.

Research Methods

Qualitative research method has been adopted to carry out this research. Key words and
phrases in the Industrial Disputes Act have been identified and interpreted with reference to
decided cases, books and journal articles. For this research, the key words and phrases in the

1
Industrial Arbitrator, Industrial Court and Labour Tribunal.
2
The words ‘curiously worded’ in the title have been taken from Lord Viscount Dilhorne’s judgment in United
Engineering Workers’ Union v. Devanayagam , (1966) 69 NLR 289 at p. 300.

1
Act have been interpreted in the context of jurisdiction and powers of Labour Courts and
maintenance of industrial peace in the Country. Furthermore, combined effect of the words,
phrases and provisions has been analyzed in light of jurisdiction and powers of Labour
Courts.

Findings

The Long Title to the Industrial Disputes Act provides that the Act has been enacted, inter
alia, for settlement of industrial disputes. It makes clear that the objective of the Act is not
adjudication of the disputes, but their settlement. The Act has created Labour Courts, viz,
Industrial Arbitrator, Industrial Court and Labour Tribunal with special powers to make just
and equitable decisions to settle industrial disputes.

Industrial Arbitrator has jurisdiction to hear an industrial dispute when a dispute is referred
by the Commissioner or Minister for settlement. Industrial Court has jurisdiction when an
industrial dispute is referred by the Minister for settlement. Labour Tribunal has jurisdiction
to hear a dispute when an application is made to the Tribunal by a workman or trade union on
his behalf.

Section 48 of the Act gives very expansive interpretation to the words ‘industrial dispute’. It
results in all disputes relating to employment at workplaces falling within the ambit of
‘industrial disputes’ and gives the power to the Commissioner and Minister to refer the
disputes for settlement. According to Section 31B(1)(a) of the Act, a workman whose
services have been terminated by his employer can make an application to a Labour Tribunal
for relief or redress.

In United Engineering Workers Union v Devanayagam,3 Lord Justice Viscount Dilhorne

observed that “Section 31B(1) does not say that a workman can apply for relief in respect of
the wrongful termination of his services... The omission of the word ‘wrongful’ is
significant.” In Associated Battery Manufacturers (Ceylon) Ltd v United Engineering
4
Workers Union Vythialingam.J observed that in section 31B(1)(a) the word ‘termination’ is

3
Ibid., at p. 300.
4
(1974-1975) 77 NLR 541 at p.547.
2
not qualified by the words ‘wrongful’ or ‘unjustified’. Since the word ‘termination’ is not
qualified by the words ‘wrongful’ or ‘unjustified’, a workman can make an application to a
Labour Tribunal even though the termination is both lawful and justified.

The Labour Courts are not fettered by the clauses in a contract of employment when they
make just and equitable decisions. If they are fettered by the unreasonable clauses in a
contract of employment, they will not be able to make just and equitable decisions. Section
31B(4) expressly provides that a Labour Tribunal can provide relief or redress to a workman
without being fettered by a contract of employment. Therefore, a workman can make an
application for relief against termination of his services even though the termination is in
accordance with his contract of employment.

Section 31B (1) (b) of the Act requires Labour Tribunals to decide whether gratuity and other
benefits “are due” to the workmen covered by the Section. In United Engineering Workers’
Union v. Devanayagam5 Lord Viscount Dilhorne stated when interpreting Section
31B)(1)(b) of the Act with regard to whether payment of gratuity ‘are due’: “ Section
31B(1)(b) is curiously worded… If section 31B (1)(b) stood alone then the words ‘are due’
might be interpreted as meaning ‘are legally due’ but this sub-section must be read with Ss
31B(4) and 31C(1) and reading it with these sub-sections, it is clear that the tribunal’s
decision is not …legally due but whether it is just and equitable …” The combined effect of
the provisions expand the powers of the Labour Tribunals to make decisions as to gratuity.

According to Section 36(4) of the Act, Labour Courts are not bound by the provisions of the
Evidence Ordinance when they conduct inquiries and make just and equitable decisions. The
provisions relating to non-application of the provisions of the Evidence Ordinance provide a
flexible procedure to settle industrial disputes by making just and equitable decisions.

The phrase ‘relief or redress’ in Sections 31B(1)(a) and 31 B(4) with regard to application to
a Labour Tribunal for termination of services also expands the jurisdiction and powers of the
Tribunal. In Walker Sons & Co Ltd v. Fry,6 while delivering the dissenting judgment,
Tambiah.J explained the words ‘relief’ and ‘redress’ as, “…Redress is a word that is used

5
Op.cit., at p. 300.
6
(1965) 68 NLR 73 at p. 113.
3
with reference to grievance. A grievance arises when something legally due is not given. The
word ‘relief’ clearly indicates cases where a person is not enforcing a legal right. Relief may
be given to a workman although the employer has adhered to the terms of the contract and
has fulfilled his legal obligation.” The nature of the word ‘relief’ enables a workman to file
an application in a Labour Tribunal even though the termination of services is in accordance
with his contract of employment.

The Labour Courts have power to order reinstatement or compensation for unjustified
termination of services. These reliefs are equitable reliefs and enable the Labour Courts to
award appropriate reliefs when they make just and equitable decisions. In
7
Caledonian(Ceylon)Tea and Rubber Estates, Ltd v Hillman, Sharvanandha,J. distinguished
compensation from damages by explaining that “compensation can be awarded irrespective
of any default in law …”

When the Labour Courts make decisions as to unjustified termination of services, they have
discretion to decide whether reinstatement or compensation would be the appropriate relief.
The just and equitable jurisdiction and the special powers empower the Labour Courts to
order compensation, in certain circumstances, even though termination of services is
justified. In Saleem v Hatton National Bank Ltd,8 Kulatunga.J stated that “the effect of the
decided cases is that a Labour Tribunal may order compensation upon a termination of
services even where such termination is justified...” Hence, the words and phrases in the Act
not only require the Labour Courts to make just and equitable decisions, but also enable them
to make just and equitable decisions.

Conclusion

The important finding is that the Labour Courts will not truly be able to make just and
equitable decisions solely by means of the provisions that expressly empower the Labour
Courts to make such decisions. The other related provisions of the Act support the Labour
Courts in making such decisions. The words and phrases in the Act have knitted the fabric of
the Act, ‘just and equitable’ being the golden thread that runs across this. Therefore, it could

7
(1977) 79 (1) NLR 421 at p.433.
8
(1994) 3 Sri LR 409 at p. 419.
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be said that the Industrial Disputes Act is a curiously worded legislation to provide a
coherent scheme empowering the Labour Courts for promotion of industrial peace in the
country.

References

Associated Battery Manufacturers (Ceylon) Ltd v United Engineering Workers Union,

(1974-1975) 77 NLR 541
Caledonian(Ceylon)Tea and Rubber Estates, Ltd v Hillman, (1977) 79 (1) NLR 421
Industrial Disputes Act, No. 43 of 1950
Saleem v Hatton National Bank Ltd, (1994) 3 Sri LR 409
United Engineering Workers Union v Devanayagam, (1966) 69 NLR 289
Walker Sons & Co Ltd v. Fry, (1965) 68 NLR 73

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