• Ruling ensures employers must deposit cash security within 30 days of labour tribunal orders
• Decision aims to curb frivolous employer appeals, uphold workers’ rights  
• SC affirms clarity in Industrial Disputes Act, protecting employees from delays in justice
• Labour law expert praises ruling as victory for workers’ rights, judicial efficiency  

The Supreme Court (SC) in a landmark case took steps to clear all existing doubts regarding the furnishing of security by an employee when appealing a decision of the labour tribunal, holding that such security provided must mandatorily be in cash and be furnished within 30 days of the labour tribunal order. 

Labour law experts claim that this will prove beneficial in discouraging frivolous appeals by employers as a matter of process. 

The SC on Monday (2) delivered its judgment in the appeal bearing No. SC/Appeal/111/2022 between Duro Pipe Industrial Ltd. (Duro International) and 36 former employees. 

This is an appeal to the SC against an interlocutory order of the High Court in an appeal made to it by Duro International against the final order of the Negombo Labour Tribunal awarding Rs. 26.8 million to 36 former employees on the grounds that their services had been unjustifiably terminated by Duro International.

Delivering the judgment of the SC in this appeal, Justice Mahinda Samayawardhena, with Justices P. Padman Surasena and Kumudini Wickremasinghe agreeing, held that Section 31D of the Industrial Disputes Act No.43 of 1950, as amended by the Industrial Disputes (Amendment) Act No.32 of 1990, explicitly required any employer appealing against a judgment of a labour tribunal to furnish to such tribunal security in cash. 

The judgment also held that a bank guarantee as proposed by Duro International would not suffice.

Moreover, there previously existed a certain ambiguity in law with regard to whether an employer was required to furnish cash security within the 30-day appealable period. 

Several previous judgments took the view that the deposit of security was mandatory but the time limit within which it should be deposited was directory, while certain other judgments had taken an opposing view. 

In an attempt to cure this ambiguity in law, Justice Samayawardhena, upon analysing the previous judgments, concluded that an employer appealing a decision of the labour tribunal was mandatorily required to furnish cash security within the 30-day appealable period and that the opposing interpretation contradicted the clear intention of the Legislature. 

“When the Industrial Disputes Act in unambiguous terms states that every appeal or application to the High Court shall be accompanied by a certificate issued under the hand of the president of the labour tribunal confirming that security has been furnished, the court cannot and need not embark on a voyage of discovery to interpret the requirement differently, as there is no ambiguity in the language or intent of the Legislature,” he said. 

Justice Samayawardhena further held that the instant appeal to the SC as a whole was misconceived in law to the extent that Duro International was not entitled to pursue an appeal to the SC from an interlocutory of the High Court under Section 31DD of the Industrial Disputes Act and Section 9(a) of the High Court of the Provinces (Special Provisions) Act No.19 of 1990. 

Speaking to The Sunday Morning Business, Attorney-at-Law and labour law expert Amaranath Fernando applauded the instant judgment of the SC, claiming that it would prove to be beneficial in protecting the rights of workers by discouraging employers from engaging in frivolous appeals against the orders of the labour tribunal as a mere matter of process.

He said: “The intention of the Legislature when introducing the Industrial Disputes Act was primarily to safeguard the rights of workers. However, certain employers have been known to abuse the appellate processes to frustrate workers who can ill afford the inordinate delay in the disposal of such appeals.”