Based on an article
by Dr. Wickrema Weerasooriya, under the heading “Highlights of Labour Tribunals
and efficacy of changing contractual terms during employment in the Labour
Tribunal Journal 2012 published by Labour Tribunal Presidents’ association.
The importance
of Labour Tribunals
Labour Tribunals, hereafter indicated as LT, have been in existence since May 1959. There
have been several judgments of the LT that have reached the appellate courts
and those final decisions constitute “binding precedents”. Without the LT
Presidents who heard the evidence and delivered the original judgment, the
appellate Courts would not been able to develop this branch of the law.
Importance of Labour Tribunals:
I. Employees go to these widely known courts for
relief when their services have been unlawfully terminated.
II. LTs have given a forum for afflicted employees
who were previously able to get relief only from the normal civil courts or by
referral for Arbitration through the Minister or Commissioner of Labour. LTs
have the single power of granting reinstatement to workers which is not
exercised by any other court.
III. They have jurisdiction with regard to
termination of employment of workmen in the private sector and also in relation
to semi-governmental institutions as well, ie. State sponsored Banks,
Corporations, Boards etc. Workers of Public Corporations can go to a LT is a
privilege and a double advantage because such workers can also obtain relief by
Fundamental rights applications. Private sector workers do not have this
luxury.
IV. There is no procedure laid down for inquires
before a LT which is not the case in normal Civil Litigation which is governed
by the Civil Procedure Code.
V. According to the Industrial Disputes Act,
section 36 (4), provisions of the Evidence Ordinance shall not apply to
proceedings before a LT. However it is
better to follow the guidelines set out in the Evidence Ordinance in LT
proceedings according to several judicial pronouncements. As a result of
non-application of the provisions of the Evidence Ordinance, confession is
admissible in proceeding before a LT.
VI. Since there is no Civil Procedure Code available
in proceedings before LTs, issues with regard to amendment of caption,
pleadings, amendment of pleadings, substitution of parties, dissolution of companies,
legal standing of unincorporated bodies, ex parte inquiries are there. However
some of these issues are provided with solutions from the judicial
pronouncements been made by the Appellate Courts.
VII. Employers are discourages from appealing against
LT orders since they have to deposit the amount awarded by the LT before
lodging the appeal. This is not found in other civil appeals.
On what grounds can Contracts of Service be changed?
Simply said, can an employer change the terms and conditions of the
original contract of service? If so what must the employer do? Can he do so partially?
Is the employee bound by such changes and if so under what conditions?
To find answers to above, let’s look at the importance played by the
common law principles in developing labour law. The labour law originated from
the law of master and servant, from the law applicable to domestic or household
servants. Then came to “Independent Contractors” and lawyers and judges talked
of the difference between “contracts of service and “contracts for services”.
Since the original article did not verify the difference between the
contracts of service and Contracts for Services, I tried to find the major difference
between them. According to literature available, the fundamental difference between
contract of service and contracts for services is that:
- An employee-employer contract is a
contract of service
- A contractor-client contract is a
contract for services
Discontent, lawyers and judges employed the well-known “the control
test”, the “integration test”, the “economic reality test” and even the
“multiple” or dominant impression” test. With the continuous development of
workplace practices, the legal debate will also continue.
The current trend of employment is outsourcing. While outsourcing of
“janitorial”, “canteen” and “security” are most popular, areas such as
“transport” and even “clerical” out sourcing will follow. All the above issues
are finally linked with the “contract of employment”. Even the definition of
“workman” in the Industrial Disputes Act gives the “contract”. According to the
Industrial Disputes Act “workman” is:-
“ Any person who has entered in to or works under a contract
with an employer in any capacity, whether the contract is expressed or
implied, oral or in writing , and whether it is a contract of service or
of apprenticeship, or a contract personally to execute any work or labour, and
included any person ordinarily employer under any such contract whether
such person is or is not in employment at any particular time, and includes any
person whose services have been terminated”
Above shows that the existence of a contract with one’s employer is
the prerequisite for identifying a workman.
Though the contract of employment can be verbal or implied, for
purposes of discussion let’s look at a normal written letter of appointment
which is the contract. Many employees
have never studied or read the document. Employees do not remember the terms
and conditions in them.
General Terms and Conditions found in a letter of appointment
The normal two to three page letter of appointment carries requisites
by both parties but principally by the employee.
Almost all of the “terms”, “words” and “expressions” in the letter of
appointment have been judicially explained and have been the subject of case
law. When a dispute arises case-law comes in to act.
Changes to the contractual terms must be just and equitable
Many employers now inserts a specific clause in to the employee’s
letter of appointment about changes to terms of the employment. An example of such a clause is:
The Employer reserves the right to make reasonable changes to any
of your terms of employment from time to time; such changes may be made by way
of a general notice applicable to all employees or by way of specific notice to
you. Any such changes shall take effect immediately.
At least one month’s written notice will be given to you of any
significant changes which may be given by way of an individual notice or a
general notice to all employees.
It is the author’s view that any unreasonable changes to terms and
conditions of employment which are implied by the employer, without the written
consent of the employee, can be rejected by a LT as not being “just and
equitable”. A employer of a group of companies gets a transfer to another
company within the group. This transfer
must be agreed to by the employee as well. The employee’s period of service at
his prior company should be taken in to consideration in the current company
when calculating gratuity.
While the author of this article highlights the importance of applying
developed common law principle in deciding labour law issues, it must be noted
that the contract of employment is also crucial.
One must also recognize that this contract of employment is different
to the other contracts such as a contract for the purchasing of a laptop, a DVD
player. In the later type of contract one has only to look at the document
itself and understand and apply the terms set out in the contract.
However the LT president has to take in to consideration that behind
the letter of contract is a living human being the employee. While by tradition
LTs are expected to be sympathetic toward the employee, our appellate courts
have said that LTs must still observe “a level playing field”. Simply said they
must consider the issue before them keeping in mind the employers interests as
well.
