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Institute of Personnel Management

Professional Qualification in Human Resource Management Module 11 INDUSTRIAL LAW Case Study
Instructed by Ms M. C. G. Mahipala

G. R. Raban PQHRM 46 / 20

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Case Study

Table of Contents
1 2 Introduction.......................................................................................................................2 Case Analysis....................................................................................................................4 2.1 Employee's Point of View...............................................................................................4 2.2 Employer's Point of View...............................................................................................7 2.3 Possible Action...............................................................................................................9 3 4 Conclusion.......................................................................................................................11 References.......................................................................................................................12

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1 Introduction
The situation given in the case demonstrates an instance where an employee may be dismissed on grounds of misconduct. Whether the dismissal was legal or not is debatable, and will be discussed in the following chapter. A dismissal is an involuntary form of termination of employment that occurs due to an act of misconduct performed by the employee. A misconduct is defined as an act inconsistent with the fulfilment of expressed or implied conditions of service, or if it has a material bearing on the smooth and efficient working of the organization. There is no formal law that determines the degree of a misconduct, but it depends on factors such as the organization's culture, the nature of its business, and the situation in which the offence was caused. Each case of misconduct is therefore considered on its own, and an appropriate penalty awarded accordingly. The case describes the dismissal of Sunil Wijesinghe, an Accounts Assistant employed in a private company. The main reason for his dismissal is unauthorised absence from work, and thereby violating company rules regarding leave and disrupting the work processes in the organization. Sunil was served with a show cause notice addressing the misconduct, and eventually dismissed because the explanation forwarded by Sunil was not accepted by the management. Another important point highlighted by the case is Sunil's state of employment. In his first six months at the company, Sunil served as a Trainee Accounts Assistant. After the completion of his training, Sunil was placed on probationary employment for six months. But at the end of the six-month probationary period, Sunil did not receive any intimation as to whether or not he is confirmed in the post or his probation period is being extended. His state of employment is unclear at the time of his dismissal. Sunil is of the opinion that his dismissal was unlawful and is now seeking legal redress. As a member of a trade union, he is covered under the collective agreement and is entitled to receive its benefits. Sunil is not qualified to apply to the Labour Tribunal because over three months has passed from the day his services were terminated. Therefore, the only remedy for Sunil now is to follow other dispute settlement procedures available by law such as conciliation, arbitration, and labour courts.
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This case can be analysed through the view points of both parties; the employee's and the employer's. Both parties are guilty of not acting in good faith up to some degree. Even though law does not specifically address each and every aspect of the employer-employee relationship, both parties are responsible to perform their respective roles in good faith. This is the cornerstone of a trusting relationship that leads to a successful business for the employer and a successful career for the employee. We can determine whether or not Sunil's termination was lawful by referencing various provisions provided by law. Legislations that are referenced when analysing this case are; Shop and Office Employees' Act No. 19 of 1954 Industrial Disputes Act No. 43 of 1950 Termination of Employment of Workmen Act Sunil is employed as a Accounts Assistant in the finance branch of the Head Office of StarClass Enterprises Private Limited. Therefore, we can safely conclude that he is covered by the Shop and Office Employees' Act. The case will be closely analysed from both the employee's and the employer's viewpoints in the following chapter. Regulations provided by the above acts will act as a guideline when determining the validity of each action.

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2 Case Analysis
The case illustrates a dismissal due to a misconduct committed by an employee. From the employer's point of view, the employee violated company rules regarding attendance. From the employee's point of view, the employer's conduct has not been straightforward. Both viewpoints will be discussed in this chapter.

2.1 Employee's Point of View


Sunil joined the company as a trainee and after that, he was placed on probationary employment. The difference between a training period and probation period must be clearly understood. Most notable differences are the level of skill possessed by the employee, and the level of responsibility bestowed upon the employee. Traineeships combine work and training. During a training period, an unskilled employee will gain knowledge and skills specific for his job. The employee is given minimum responsibilities and will be closely supervised by his superiors or trainers. Probation is a trial period in which the employer will assess and evaluate the employee to determine if he or she is suitable for long term employment with the organization. Here, the employee will perform actual job duties and will be given adequate responsibility to carry out his tasks. . He remained unaware of his state of employment. This shows poor interaction between the employer and employee.

Under the Shop and Office Employees' Act, employees are entitled to have a number of paid holidays; 14 days as Annual leave and 7 days as Casual leave. Usually Annual leave must be obtained with the prior approval of the employer, and 7 days of that should be taken consecutively. Casual leave is usually obtained for unforeseeable events such as illness, family matters, etc. The act also specifies that the continuity of the employment of any person is not interrupted by reason of the absence of that person from work ; (a) on holiday or on leave, with full remuneration, in accordance with the provisions of this Act or of any other written law; or

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(b) with the permission or subsequent consent of the employer, whether with or without remuneration. The company rules regarding leave allows an employee to obtained approved leave, and to obtain leave due to reasons which were unforeseen. The act also implies that if an employee is absent from work without the approval of his employer, his employment may be deemed as interrupted. Management can take action against an employee who keeps off from work for three consecutive working days without intimation. Therefore, the rule regarding leave does not violate the Shop and Office Act, and is legal.

Sunil's explanation in response to the show cause notice directed at him brings forth the bad attitude Sunil has towards his job. Not only does he knowingly commits an offence, but he refuses to accept responsibility for his actions. For instance, Sunil claims that he is unaware of the company's rule regarding leave. This is hard to believe because Sunil has been employed there for almost a year. An employer is certainly responsible for educating his employees on company rules, but an employee also has an obligation to educate himself on company rules. Sunil's reply implies that he disregards company rules, and feels that he doesn't have to follow them. Such a negative outlook creates a bad impression on the management. Sunil's poor perception about his work and its importance is also giving him a bad reputation. Saying that work getting delayed is a common occurrence is similar to admitting that his contribution to the company is negligible, and he is easily replaceable. After going through Sunil's reply, the management will have concluded that Sunil cannot be held accountable for his job duties. His negative attitude affects his work performance. Had Sunil followed a different approach in his reply, he could have maintained a positive image with the management. He as already committed an offence. By admitting his guilt and acknowledging the fact that he needs to be more responsible with his job duties, Sunil could have won the sympathy of the management, and they would have taken a different decision instead of terminating his employment.

The show cause notice directed at Sunil states that he caused unnecessary delay in the finance department by taking unauthorised leave because he was supposed to compile and
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provide some data. This implies that Sunil held a position of responsibility. His absence resulted in financial losses to the company. The gravity of an offence depends on the nature of the business. Most often when a person in an accountant's position takes unauthorised leave, the punishment would usually be a fine or withholding of incentives and benefits. But since Sunil has caused financial losses to the company and he displayed such poor conduct in his reply to the show cause notice, the management's decision can be justified. Employees with undesirable work ethics are a burden to a company. Even though the trade union does have a point when they presented the fact that the punishment not being proportionate to the offence, this case is an exception. If Sunil had admitted the charges against him and had promised to perform better in the future, the management could have adopted lighter disciplinary measures such as imposing a fine or withholding a promotion.

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2.2 Employer's Point of View

It is not mandatory for an employer to confirm an employee at the expiry of a probation period. Probation is a trial period in which the employer will assess and evaluate the employee to determine if he or she is suitable for long term employment with the organization. If the employer is not satisfied with a probationer's performance, he can either extend the period of probation to further analyse the employee or terminate the employment of the probationer. The Shop and Office Employees' Act No. 19 of 1954 states that the following particulars relating to the conditions of employment are required to be furnished by an employer to the employee on the date of his employment ; i. The period of probation or trial, if any, and the conditions governing such period of probation or trial. ii. Circumstances under which the appointment may be terminated during such probation or trial. Sunil did not receive a letter to the effect that he has successfully completed the probation period and that he is confirmed in the post. If Sunil's letter of appointment states that he will be informed in writing when he is confirmed in his post, then Sunil is still on probation. But his employer has failed to communicate to him the fact that his probation period has been extended. Even though such intimation is not required by law, the management should have done in to avoid any confusions. This case is further analysed assuming that Sunil is a probationary employee.

The main difference between a confirmed employee and a probationer is the process of termination. If the termination is on grounds of misconduct, it is mandatory to issue a show cause notice for a confirmed employee. This may or may not be followed by a formal domestic inquiry. The law does not require an employer to hold a domestic inquiry before terminating an employee. But it is often done in order to maintain good faith between employer and employees and also a domestic inquiry can come in handy if the case is brought before a labour tribunal. For a probationary employee, it is not essential to issue a show cause

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notice. An employer may terminate the appointment of a probationer at the end of the probation period without giving any reasons. In the case of Sunil, a show cause notice was issued to him even though he was a probationer. Sunil's status of employment still remains confused. If the management issued a show cause notice to Sunil addressing his misconduct, then they have regarded Sunil as a confirmed employee. But later at the labour office inquiry, the management takes up the position that Sunil was a probationer.

The communication between the company's management and employees is poor. Probationers are unaware of their assessment procedure. They do not receive feedback on their performance, and are not aware whether they are being confirmed in their respective posts or not. When the trade union got involved in Sunil's case and made a written representation to the management requesting for an appointment to discuss the issue, the management refrained from responding. The management has not acted in good faith in this case. They have an obligation to listen to trade union complaints. When the matter was brought to the district labour office, the company's management intentionally delayed the inquiry process by putting forward various excuses. The management clearly tried to avoid legal confrontations, and thereby refusing its employees a fair chance at gaining justice. Matters regarding the termination of employment must be filed before a labour tribunal before the lapse of three months after the date of termination. But since the management delayed the inquiry by the district labour office, Sunil was unable to file his complaint to a labour tribunal.

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2.3 Possible Action

An industrial dispute may be defined as a conflict or difference of opinion between management and workers on the terms of employment. It is a disagreement between an employer and employees' representative; usually a trade union, over pay and other working conditions and can result in industrial actions. A district labour office is responsible for all labour matters in its respective district. Labour Officers in a district labour office address different subjects like employment in Free Trade Zones, employment out of Free Trade Zones, factory inspections, inquiries, etc. The Industrial Disputes Act No.43 of 1950 states that the Commissioner's (or labour officer's) main function is; Where, upon notice given to him or otherwise, the Commissioner is satisfied that any industrial dispute exists or is apprehended, it shall be the function of the Commissioner to make such inquiries into the matters in dispute, and to take such other steps, as he may think necessary with a view to promoting a settlement of the dispute, whether by means referred to in this Act or otherwise. In short, the commissioner has the power to intervene in labour related disputes whether he receives a formal complaint about it or not. He also has the authority to utilize the provisions provided in the act, or any other means necessary to settle the dispute. The provisions provided in the act are; Collective agreements Settlement by conciliation Settlement by arbitration Industrial Courts When Sunil's trade union formally requested the district labour office to intervene, the labour officers are obligated to hold an inquiry with the two parties in question and provide justice. In this case, the dispute settlement procedure provided in the collective agreement can be followed, or any other mechanism provided under the Industrial Disputes Act can be followed.

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A labour tribunal is a form of an industrial court that inquires into industrial disputes in order to provide justice. The Industrial Disputes Act states; A workman or a trade union on behalf of a workman who is a member of that union, may make an application in writing to a labour tribunal for relief or redress in respect of any of the following matters:(a) the termination of his services by his employer; (b) the question whether any gratuity or other benefits are due to him from his employer on termination of his services and the amount of such gratuity and the nature and extent of any such benefits, where such workman has been employed in any industry employing less than fifteen workmen or any date during the period of twelve months preceding the termination of the services of the workman who makes the application or in respect of whom the application is made to the tribunal; (c) the question whether the forfeiture of a gratuity in terms of the Payment of Gratuity Act, 1983 has been correctly made in terms of that Act; and (d) such other matters relating to the terms of employment, or the conditions of labour, of a workman as may be prescribed. A workman must apply to a labour tribunal before the lapse of three months from the day of termination. A labour tribunal may grant relief such as reinstatement of workman, payment of back wages, or other forms of compensation. If a person who has a case under review in a labour tribunal dies, his or her dependants are able to receive any benefits granted by the labour tribunal.

Since the maximum time limit allowed to apply to the labour tribunal has elapsed, Sunil cannot seek relief from a labour tribunal even though he is entitled to. Sunil can only seek legal redress by means of other mechanisms provided in the Industrial Disputes Act such as conciliation, arbitration, or any other possible means available in the collective agreement.

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3 Conclusion
The labour legislation in Sri Lanka provides ample opportunity to ensure social justice by regulating the employer-employee relationship. It protects the employee from exploitation and promotes industrial peace. Even though any employer or employee is entitled to seek relief from labour laws when they are faced with injustice, they are both responsible for acting in good faith in order to honour their relationship. In the case provided, we can see that both Sunil and his employer have failed to honour the relationship up to some extent. Sunil's habitual absenteeism has led him to break company rules, and the company is vague in its rules and regulations regarding the probationary period. All of these causes added together have now created an industrial dispute. It could have been easily avoided if there was an effective communication channel between the two parties, and each party behaved in a way that would foster a good working relationship.

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4 References
Shop and Office Employees' Act No. 19 of 1954 Industrial Disputes Act No. 43 of 1950 Termination of Employment of Workmen Act

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