SC justifies termination of employment on financial misconduct

Colombo, June 18 -  The Supreme Court today, in its judgement on an industrial dispute case, justified the termination of an employee's employment on the grounds of financial misconduct.

Accordingly, the Supreme Court ordered the judgements made by the High Court and the Labour Tribunal, which were in favour of the employee, to be set aside, observing that the evidence clearly establishes financial misconduct by the employee, resulting in a loss of trust and confidence and justifying the termination of employment.

With Supreme Court Justice Preethi Padman Surasena and Justice Gamini Amarasekara agreeing, Justice Shiran Gooneratne observed that the Labour Tribunal and the High Court erred in law as it failed to evaluate the evidence when deciding on financial misconduct, on the part of the employee.

“There was no appreciation of evidence by both courts in considering the significance of trust and confidence placed in the position the respondent held and the ever-present fiduciary duty and prudence to uphold the good name of the institution, together which constitute the essence of such position of responsibility,” Justice Gooneratne observed.

In this case, one Chandrakumara filed an application before the Colombo Labour Tribunal stating that his employment as Director Finance with the Vocational Training Authority of Sri Lanka was unjustly terminated with effect from 20/06/2012.

During the inquiry, the Authority took up the position that the termination of service was justified due to several financial irregularities and or acts of financial misconduct on the part of the employee as revealed in the Auditor General’s Department report dated 07/04/2010.

At the conclusion of the Inquiry, the Labour Tribunal by Order dated 23/08/2018, held that the termination of employment was unjustified and directed that the Authority pay compensation to the equivalent of 47 months’ salary to the employee, in lieu of reinstatement.

Being aggrieved by the said Order, the Authority appealed to the High Court. The High Court, by Judgement dated 21/08/2020 affirmed the said Order of the Labour Tribunal and dismissed the appeal with costs. Subsequently, the Authority filed an appeal before the Supreme Court against the said judgement.