No statutory requirement to conduct domestic inquiry before terminating workman, rules Supreme Court

By Lakmal Sooriyagoda
The Supreme Court in its recent judgment relating to an industrial dispute case held that in the Sri Lankan Labour Law, there is no statutory requirement to conduct a domestic inquiry prior to the termination of a workman.

The Supreme Court observed that it is not mandatory to hold a domestic inquiry, when there is no collective agreement or a clause in the contract of employment that a domestic inquiry should be held in the event of termination. 

However, the Supreme Court noted that it is accepted that holding a domestic inquiry could be beneficial to both the employer and the employee.

There may be instances where it is plain that the employee in question is guilty of conduct that warrants termination and could be dismissed without any need for further investigations. Therefore, it would be an additional burden to require employers to hold domestic inquiries by default in all instances, Justice Buwaneka Aluwihare held. 

 The Supreme Court made these observations while delivering its judgment into an appeal filed by Union Apparel (Pvt) Ltd challenging the judgment of the High Court by which, the High Court Judge had affirmed the Labour Tribunal’s findings that the termination of services of an employee was unjust and therefore the Applicant was entitled to compensation. 

However, explaining the law regime relating to the domestic inquiry and termination of employment, the Supreme Court decided to dismiss this appeal citing there was no justifiable basis for the termination of the employee.
Meanwhile, the Supreme Court outlined the legal literature relating to holding a domestic inquiry prior to the termination of an employee.

Holding a domestic inquiry is however a salutary practice. S. R. De Silva in ‘Law of Dismissal’ (The Employers’ Federation of Ceylon, Monograph No. 8, Revised Edition 2004) commenting on the desirability of holding domestic inquiries states “Punishment of an employee, whether by dismissal or otherwise, without following a disciplinary procedure which involves the giving of an opportunity to an accused employee to exculpate himself is, prima facie, arbitrary.

Listing several reasons for the desirability of holding a domestic inquiry, S. R. De Silva has advanced the view that even where guilt can be established without a domestic inquiry, holding a domestic inquiry could be beneficial.
In All Ceylon Commercial and Industrial Workers’ Union v. Weerakoon Bros Ltd. (Sri Lanka Gazette No. 90 of 14. 12. 73) the Court accepted that the dismissal of employees without holding a domestic inquiry could be reviewed for correctness as it was against the principles of natural justice.

However, in St. Andrews Hotel v. Ceylon Mercantile Union CA 138/85 decided on 01.04.1993 it was recognized that a dismissal cannot be set aside as wrongful solely on the basis that no domestic inquiry was held. Therefore, it appears that while a domestic inquiry is desirable, in certain cases, due to the nature of the circumstances a domestic inquiry could be dispensed with.

The Labour Tribunal had held that the termination of employee Dinesh Fernando was wrongful and ordered the apparel company to pay Rs.420, 000 as compensation to the employee. 

On appeal to the Provincial High Court by the apparel company, the High Court Judge had affirmed the award of the Labour Tribunal, by its judgment dated 12th December 2013. This appeal had been filed challenging the judgment of the High Court.

The reason given for the dismissal of the employee had been, his failure to ensure that the polybags used for packing the garments ordered by an international buyer, were in compliance with the specifications and other requirements stipulated by the said international buyer and another buyer and that the employee failed to carry out his duties up to their expectations.

The Supreme Court three-judge-bench comprised Justice Buwaneka Aluwihare, Justice Preethi Padman Surasena and Justice E. A. G. R. Amarasekera. 

Counsel Dhanya Gunawardena appeared for the apparel company. Counsel G. R. D. Obeysekara with Lal Perera instructed by Unica Fonseka appeared for the employee.