Severe Sanctions for Abusing Process in Labour Appeal

• Appellant-Company Failed to Take Any Steps for Two Years After Filing Appeal
• Appeal Dismissed, Legal Costs Awarded, and Rs. 100,000 Penalty Imposed 

The Supreme Court recently imposed severe sanctions on a company for misusing court procedure and deliberately delaying a labour-related appeal. The company had filed a leave to appeal application to challenge a High Court decision that upheld compensation awarded to a former employee but then took no steps to move the case forward for over two years. The Court strongly criticized company’s conduct, observing that the appeal was filed “merely to ensure that the Respondent suffers further without being able to reap the benefits of the Award made by the Labour Tribunal and affirmed by the impugned Judgment of the High Court.” The Supreme Court found this to be a clear abuse of the judicial process.

The case began when a former employee of the company, was terminated from his employment a decision he challenged before the Labour Tribunal. After a full inquiry, the Tribunal ruled in his favour, finding that the dismissal was unjustifiable, and awarded him compensation, back wages, and other statutory entitlements.

Unhappy with this outcome, company appealed to the High Court of Negombo, which, after hearing arguments, dismissed the appeal on 31st October 2019, affirming the Labour Tribunal’s decision. The High Court also ordered company to pay Rs. 75,000 in costs to the employee.

Just over a month later, on 10th December 2019, company filed a leave to appeal application before the Supreme Court. While the company had already obtained a certified copy of the full High Court case record on the same day, it filed only a copy of the judgment with its petition and took no further steps to advance the case.

What followed was a period of over two years of complete silence. company neither filed the full case record nor requested that the matter be scheduled for support. Importantly, they did not provide any explanation to the Registry of the Supreme Court for this delay.

The matter remained dormant until February 2022, when the Supreme Court Registry brought the file to the attention of the Chief Justice. Acting on this, the Court issued notices to the parties and listed the matter in open court. It was only after this intervention that company filed the certified case record though more than two years had passed since they first obtained it.

Even then, the Court noted further inconsistencies: a second request for the same certified record was made by company in March 2022, and the High Court reissued it in April 2022 again promptly. The Supreme Court found no valid reason for why the documents were not filed earlier or why a second request was made when the first certified copy had already been received in December 2019.

On examining the timeline, the Court noted that “if not for steps taken by the staff of the Registry of this Court on 25th February 2022 to bring this matter to the attention of the Honourable Chief Justice, this matter would have remained in storage for a further period of time”, highlighting the lack of initiative by the company to prosecute its own application.

In its final judgment delivered on 29th May 2025, the Supreme Court concluded that company had failed to act with due diligence and had not complied with the mandatory procedures under Rule 8 of the Supreme Court Rules, 1990, which govern the proper steps to be taken when filing and prosecuting a leave to appeal application. 

Accordingly, the Supreme Court Dismissed the application in limine, Ordered that the Respondent be entitled to receive the benefits of the Labour Tribunal award and the High Court judgment, including the security deposit with accrued interest, Directed DCSL to pay the actual legal costs incurred by the Respondent within 30 days, and Imposed Rs. 100,000 as costs payable to the State.

“…In view of the attendant circumstances of this matter, it is necessary to observe that the Attorney-at-Law for the Petitioner (quite possibly on instructions received from the Petitioner) has not acted with due diligence and in compliance with the Rules of this Court. There appears to be considerable merit in the submission of learned counsel for the Respondent, that by filing the instant Application in this Court and thereafter not taking meaningful action to diligently prosecute the Application, all what the Petitioner wanted to achieve was to ensure that the Respondent suffers further without being able to reap the benefits of the Award made by the Labour Tribunal and affirmed by the impugned Judgment of the High Court. This is a clear instance of abuse of judicial process, which warrants the imposition of severe sanctions…” – Justice Yasantha Kodagoda PC

Case No: SC HC LA 90/2019 [Decided on 29.05.2025]

Before: Yasantha Kodagoda, PC, J. A.L. Shiran Gooneratne, J. Janak De Silva, J.