Critical Analysis of a legal case related to Labour Relations

(Individual Assignemnt)

By

Upasena I.G.W.D.R

2008/MBA/WE/25

Course: MBAHR 617 – Labour Relations

Lecturer: Ms. Arosha S. Adikaram

Semester IV - First Half

August 2010

Postgraduate and Mid-Career Development Unit

Faculty of Management and Finance

University of Colombo
Continuous Assessment:
Individual written assignment for 40 marks

1. Task
Select an actual case (related to labour relations) which had been heard at a Labour Tribunal
(LT), Arbitration, Labour Courts, Appeal Courts, or Supreme Courts and write a report critically
analyzing the history, process, and award/judgment of the selected case.
In writing the report;
• Backtrack the case and discuss the
- history of the case (root courses and context)
- process (the stages that have preceded the case at LT / Arbitration/Labour
Courts/Appeal Courts / Supreme Courts, etc)
- award/judgment given at the LT / Arbitration/Labour Courts/Appeal Courts / Supreme
Courts
• Critically analyze each of the above elements of the case (history, process and
judgment/award) from legal, human resource management and human rights perspectives.

2. Aims of the assignment

To provide an opportunity for learning partners to consider and analyze issues related to labor
relations in a critical manner, and to explore possibilities of avoiding legal issues in
organizations.

3. Content of the report

The main text of the report should contain the following information.
Description of the case
Discussion about the history of the case (root courses and context)
Discussion about the process (The stages that have preceded the case at LT /
Arbitration/Labour Courts/Appeal Courts / Supreme Courts
Discussion about the judgment/award given at the LT / Arbitration/Labor Courts/Appeal
Courts / Supreme Courts
 Critical analysis of each of the above elements from legal, human resource management,
and human rights perspectives

Attach the duly filled ‘Self Assessment Form’ to the end of the report
Hints
- Select a case where you have access to all the information needed.
- The case selected, can be related to any area in labour relations (Shop and Office Employees
Act, Employers Provident Fund, Employees Trust Fund, Gratuity, contract of employment,
discipline, etc.).
- Make use of the handout given on critical thinking in analyzing and writing the report
- If there are issues of confidentiality, you can use pseudonyms

Guidelines for writing the report

Font : Times New Roman
Font size: 12
Line spacing : 1 ½”
Referencing: APA style
Page limit: Should not exceed 10 (excluding the cover page, content page and references)

4. Allocation of Marks
Case description
Selection of an appropriate case 03 marks
Identification and discussion of the case on the following aspects
- history 05 marks
- process 04 marks
- Award/judgment 03 marks

Critical analyses
Legal perspective - 08 marks
Human resource management perspective - 07 marks
Human rights perspective - 05 marks
Adherence to assignment guidelines/ presentation 05 marks
Total- 40 marks

Deadlines for report submission

Draft submission (Soft copy) – 24th July 2010 (email to agamwarige@gmail.com)
Final submission (Hard copy) – 7th August 2010 to MBA unit
 Table of Contents
Table of Contents....................................................................................................... 5

History.....................................................................................................................6

Process.................................................................................................................... 7

Award/Judgment......................................................................................................7

Discussion about the process ....................................................................................9

Discussion about the judgment/award given at the LT / Arbitration/Labor

Courts/Appeal Courts / Supreme Courts)..................................................................10

Critical analysis of each of the above elements from legal, human resource
management, and human rights perspectives.........................................................11

Legal Perspective..................................................................................................11

Human Resource Management Perspective..........................................................13

Human Rights Perspective....................................................................................14

 1. Description of the case

Discussion about the history of the case (root causes and context)
Identification and discussion of the case on the following aspects
- history
- process
- award/judgment

History
Mr. Perera joined a leading manufacturing firm ABC Pvt. Ltd in Sri Lanka as a Senior Mechanic
on 2008.09.01. He resumed his work under Mr. Sunimal, the Mechanical Engineer who assigns
the work for Perera. Mr. Perera had around 15 years of previous experience in the same field as a
senior person and has a proven track record with good recommendations which helped him to get
recruited in the company. It was agreed that the probation period is 6 months by the letter of
appointment.
Mr. Perera was not happy about the work from the first day onwards as Sunimal wanted to treat
Perea as a Mechanic and the job description clearly described that the Senior Mechanic is the
person who coordinate and execute the mechanical repairs and not necessary carrying them out
personally. But Sunimal kept on assigning work on junior nature to Perera and he asked Mr.
Perera to wear the mechanic dress ( CoverollCoverall) which none of the similar capacity person
not wearwore.
After about 3 months, Mr. Perera found it difficult to work when Sunimal asked to carry out a
onsite repair of a machine which should be carried out by the junior person. Perera refused to
accept the orders and reported the incident to Engineering Manager and quit the job by sending a
resignation letter with 7 days prior notice as per agreed terms. Engineering Manager directly
informs the matter to HR head and HR department had send the letter to Mr. Perera accepting the
resignation.
Process
After about 3 weeks Mr. Perera filed a case at labor Tribunal against the ABC Company for
constructive termination of this services by the superior.
He demanded compensation for of 3 months salary (which totaled to Rs. 150,000) or
reinstatement of the service. ABC Company has responded to the application with a statement of
answer. Company presented the following points in the answer
• Mr. Perera has resigned voluntarily and Hence ABC Company is not liable pay him.
• During probation period any work can be assigned to verify the suitability to the
company and that is why Mr. Sunimal assigned those work to him to check the endurance
level and skill level.
• Company alleged Mr. Perera for accusing his superior on this basis.

and Mr. Perera has sent the replication in turn and his reply included the following evidences.

• His resignation letter and acceptance notice has clearly shown that the working required
envisronemntenvironment is not provideprovided at the initial from the first day onwards.
• The copy of job description and a letter of appointment did not reveal that the person is
under surveillance for his skills and competencies
• His referees and earlier service records was presented to prove his competency
• He has revealed that he is having a voice record as the evidence against Mr. Sunimal
scolding him

Award/Judgment
After about 3months from the date of application LT commenced the hearing. ABC Company
has not agreed for compensation but had agreed for reinstatement. After a series of hearings
which dragged about 8 months LT ordered the reinstate the of sServices of Mr. Perera as a
Senior Mechanic.
The decision is based on the evidence produced by the both parties and mainly ABC Company
did not accept the compensation for volunteering resignation. Hence the LT president face no
more option other than reinstatement. Even Mr. Perera did not show any disappointment
regarding the decision and accept the same.

End Note:
Even Mr. Perera is was reinstated, the Company did not send a letter of confirmation after 3
months, and Mr. Perera willingly resigned from the company. His resignation was fairly based
on the treatment he received after the LT order. After rejoining the company he was assigned to
another supervisor who treated him the proper manner but all the other colleagues were by the
side of the Manager. Hence the motivation to work at ABC was nil and Mr. Perera has to
undergo a serious psychological stress as the team culture is not present.
On the other hand he was under the impression that he would never get a letter of confirmation
from the company so it would be good to make a decision at that point rather than being late by
hanging in the same organization.
Discussion about the process
(The stages that have preceded the case at LT / Arbitration/Labour Courts/Appeal Courts /
Supreme Courts)
In this case the process has taken ample amount of time even through the case is simple in nature
without much intervention. Even though it is being clearly stated in the Industrial Dispute act No
43 of 1950 that the order of the Labor Tribunal has to be made within 4 months from the date of
the receipt of the application, this case has taken almost 7 months which reveal the nature of the
lethargic nature of the labor courts in the country. (Adikaram, 2008)
Even there are many methods of solving this nature of disputes such as conciliation or arbitration
Mr. Perera has gone through a time consuming route to demand a settlement.

Figure 1: The Settling Procedure for an Industrial Dispute

(Adikaram, 2008)
Mr. Perera could have sought the relief via commissioner of labor which will would havemake
made the process easy and less time and effort consuming. Moreover, ABC Company would
agree for compensation through conciliation as it would not affect the company image.
Discussion about the judgment/award given at the LT / Arbitration/Labor Courts/Appeal
Courts / Supreme Courts)

This case is settled under Industrial Dispute Act No. 43 of 1950. This dispute is between the
employer and employee connected with the condition of labor. Even though the employee is
under his probation period and his performance is under evaluation, the LT has awarded in the
grounds of just and equitable.
Since judgment seems bias to the employer and the employee is having sufficient evidence in
had the award seems not fair.
Employer primarily wanted to get rid of the employee at cheaper cost while the employee does
want the compensation for the damage. Since he is on probation at a glance one can argue that he
is not entitled to ask for compensation. But being on probation was not a concern for the
judgment and it is a good sign that none of the parties present it as a point.
In face the judgment seems a win-win situation to both parties but aftermath revealed that it is
unfair for the employee. Even though reinstatement of services can be considered as fair decision
but it is a well known fact that the employee will not have a good environment to work in the
same environment under the same superior.
Analyzing the decision on reinstatement it has two faces. Company is benefited by having the
employee back and they can keep him
Hence, the judgment cannot be considered as a fair judgment and the Labour Tribunal should
have ordered for compensation or reinstatement with back wages which did not happen in this
case.
Critical analysis of each of the above elements from legal, human resource management,
and human rights perspectives

Legal Perspective
Fairness of the case

In Sri Lanka, where there is law, constructive dismissal is illegal and can be contested at a court
of law or an industrial tribunal. Even if a person resigns a post he/she can still sue the employers
on constructive dismissal if he/she believes that the resignation was unavoidable under undue
pressure, harassment, discrimination or subtle construction of it. (Bandara, 2009) In this light, if
we analyze the legal perspective of the case of Mr. Perera, it is fair to the employee to ask for the
compensation as the employer is been guilty.

There are many definitions for constructive termination, In employment law, constructive
dismissal, also called constructive discharge, occurs when employees resign because their
employer's behaviour has become so heinous or made life so difficult that they may consider
themselves to have been fired. The employee must prove that the behaviour was unlawful — that
the employer's actions amounted to a fundamental breach of contract, also known as a
repudiatory breach of contract. (US Law). An employee is entitled to terminate the contract of
employment without notice or with less notice than that to which the employer is entitled by any
statutory provision or contractual term, where the employer's conduct has mad it unreasonable to
expect the worker to continue the employment relationship.( ILO, 2003). In this incident
Sunimal has unilaterally changing the employee’s job content or implied terms of employment of
Perera with/out intention. Hence it is fair that Perera seek the relief from law as an employee.

Process.

The Labour Tribunals though they have the jurisdiction to determine matters
relating to termination of employment and grant relief to workmen in the
event of wrongful or unjustifiable termination of employment, have no
jurisdiction to enforce such orders. At present Labour Tribunal Presidents are
also designated as Additional Magistrates. This move should enable Labour
Tribunal Presidents to enforce their orders, but certain amendments may
have to be made to the Industrial Disputes Act to enable them to do so. If
this is made possible there would certainly be less delay in implementing
orders made by Labour Tribunals. (Chandra, 2003) The process has incurred
loss of the income to the victim and even to the company to lose its
productive man hours in spending time for hearings.

Award

Award is fair on the legal perspective as it is in accordance with the act.

Human Resource Management Perspective
Supervisors often assume that when an employee resigns, the company is "off the hook" -- i.e.,
there will be no employee lawsuits to recover post-resignation economic damages. An employer
may heave a sigh of relief when a troublesome employee turns in his or her resignation. There is
a feeling of security. After all, the employee quit voluntarily, so there should be no basis for
wrongful discharge litigation. Even though in this incident Perera was proven innocent and not
been a problem employee it is important to understand the motives behind which Sunimal
created a bad working conditions to Perera.

Employee Motivation

Any workplace should be pleasant and address the basic need hierarchy of employees for the
achieving best results. In this scenario there is a serious issue of motivating the employees as
there no efforts seen in the ABC company on evaluating the work environments of employees.

Moreover, even after reinstatement Perera fails to continue his employment as there are no
motivating factor for continuation. This has to be seriously looked at by the management as this
will created negative signals to the other employees where company will not gain 100% out from
its associates

Grievance Handling

Analyzing the incident, it has been clearly revealed that the grievance handling procedure is not
popular in the organization even such thing stated in the company policy. If the proper grievance
handling procedure is practice this incident would have been a good opportunity to create a loyal
employee. Hence the company now should re-look the grievance handling procedure to motivate
its employees.

Induction and Orientation

Being a new employee Perera has not undergone a proper induction at the company. On the other
hand is not ntroduced/ absorbed properly to the company culture. If the induction has created the
aawareness of the company procedures Mr. Perera might have not refered to the labour tribunal.
Supervisory training/leadership training too would have helped.

You can also talk about how organizations can keep track of this sort of incidents to ovoid them.
Also how resignations can be better handled to later avoid cases on constructive terminations.

Human Rights Perspective

As per Preamble to the Universal Declaration of Human Rights, 1948, ….recognition of the
inherent dignity and of the equal and inalienable rights of all members of the human family is the
foundation of freedom, justice and peace in the world is the major consideration of Human
rights. This case is too simple to handle as a human rights perspective as the seriousness of the
human right violation is minimal. The case has been on violation as Sunimal has not treated with
dignity to Perera.

Even the award has been equally unfair to the employee. But on the other hand Company has
given a chance to Mr. Perera to leave the organization with recognition ( with the help of the
award by the labour tribunal)