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Sri Lanka
 


Source and scope of regulations - 2013    

References
  • Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971 (TEWA), consolidated version including last amendment of 2008 (Act No 20 of 2008)
    Date: 28 Mar 2008; view website » (view in NATLEX »)
  • Industrial Disputes Act No. 43 of 1950 (IDA), consolidated version including last amendment of 2008 (Act No 21 of 2008)
    Date: 28 Mar 2008; view website » (view in NATLEX »)
  • Industrial Disputes (Hearing And Determination Of Proceedings)(Special Provisions), Act No 13 of 2003
    Date: 2003; view website » (view in NATLEX »)
  • Payment of Gratuity Act [PGA], No.12 of 1983 as last amended by Act No. 62 of 1992
    Date: 1992; view website » (view in NATLEX »)
  • Maternity Benefits Ordinance [MBO], 1941 as last amended by Act No 43 of 1985
    Date: 1985; view website »
Scope
Size of enterprises excluded (≤): 15
Remarks:
  • - The TEWA does not apply to workers in establishments with fewer than 15 workers (sec. 3(1)(a) TEWA).
    - The provisions of the IDA governing retrenchment do not apply to enterprises employing less than 15 workers (sec. 31E(1) a) IDA).

Workers' categories excluded: civil/public servants; members of cooperatives
Remarks:
  • * The TEWA does not apply to public sector employees (state employees, persons employed by a local authority or by a public corporation) persons employed by a cooperative and workers with less than 180 days' service (sec. 3(1) TEWA).
    * The provisions of the IDA governing retrenchment do not apply to seasonal work and to workers with less than one year of service (sec. 31E(1) b), c) IDA).

Types of employment contracts - 2013    

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Maximum probationary (trial) period: no limitation

Remarks:
  • No statutory limitation.

Fixed term contract (FTC):
  • FTC regulated: No
  • Valid reasons for FTC use: no limitation
    Remarks:
    • No statutory limitation.
  • Maximum number of successive FTCs: no limitation
    Remarks:
    • No statutory limitation.
  • Maximum cumulative duration of successive FTCs: no limitation
    Remarks:
    • No statutory limitation.

Notes / Remarks
Employment contracts are governed by common law. There are no provisions on fixed-term contract or probationary period in the legislation.
With regards to termination of employment, the IDA and the TEWA define "worker" broadly and do not distinguish between probationary and fixed-term workers.

Substantive requirements for dismissals (justified and prohibited grounds) - 2013    

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Obligation to provide reasons to the employee: No
Remarks:
  • The TEWA does not expressly require the employer to inform the employees of the reasons for dismissal except for disciplinary dismissal (art. 2(5) TEWA)
    However, any dismissal of a worker covered by the TEWA which is not a disciplinary dismissal cannot take place without
    * the prior consent in writing of the worker; or
    * the prior written approval of the Commissioner (art. 2(1) TEWA).
    It might be that the employer shall be requested to inform the Commissioner of the reasons for dismissal when requesting approval. Sec. 13 provides that the Commissioner might direct the employer to furnish any information or explanation.
    Note also that the employee shall also be afforded the opportunity to be heard during the approval process.


Valid grounds (justified dismissal): none
Remarks:
  • Except for the reference to "termination by reason of punishment imposed by way of disciplinary action" (sec. 2(4) TEWA), the TEWA does not specify any valid grounds for dismissal.
    The employer cannot dismiss an employee other than for disciplinary reasons without:
    * the prior consent in writing of the worker; or
    * the prior written approval of the Commissioner which exercises an absolute discretion in granting or refusing approval (art. 2(1) TEWA).


    The IDA defines retrenchment as termination by an employer of the services of a worker or workers on the ground that they are in excess of the number of workers required by such employer to carry on his/her industry (sec. 48 IDA)


Prohibited grounds: pregnancy; maternity leave; filing a complaint against the employer; race; sex; religion; social origin; trade union membership and activities; language; birth
Remarks:
  • * See sec. 32A IDA on unfair labour practices:
    - dismissal by reason of trade union membership and activities (sec. 32A b))
    - dismissal of any workman or office-bearer of a trade union -
    (i) for any statement made before a tribunal or person in authority; or
    (ii) for any statement regarding acts or omissions of the employer relating to the terms and conditions of employment, of the members of such trade union made by such workman or office-bearer, in pursuance of an industrial dispute for the purpose of securing redress or amelioration of working conditions of such members" (sec. 32A b))
    * Sec. 40 IDA makes it an offence to dismiss a worker because he/she has become entitled to the benefit of any collective agreement, award or order (sec. 40(1)(k), IDA), or because the worker takes part in any proceedings against the employer, either as a witness or party (secs. 40(1)(j) and (p), IDA).
    * In addition, under the Maternity Benefits Ordinance (MBO), the employer shall not dismiss a woment during maternity leave nor can he or she dismisses a women by reason only of
    her pregnancy or confinement or of any illness resulting from her pregnancy or confinement. (sec. 10 and 10A MBO)

    * There is no legislation governing non-discrimination in employment in Sri Lanka. However, art. 12(2) of the Constitution provides that "No citizen shall be discriminated against on the grounds of race, religion, language, caste, sex, political opinion, place of birth or any such grounds"
    Note that Sri Lanka ratified ILO Convention No. 111 (1958) on discrimination in employment in 1998.


Workers enjoying special protection: pregnant women and/or women on maternity leave
Remarks:
  • Sec. 10 MBO: "When a woman worker absents herself from work in accordance with the provisions of this Ordinance (= maternity leave), it shall not be lawful for her employer to give her notice of dismissal during such absence or on such a day that the notice will expire during such absence."
    No specific protection for pregnant women and trade union members other than the prohibition to dismiss them only for reasons of pregnancy or trade union membership or activities (see prohibited grounds).


Procedural requirements for individual dismissals - 2013    

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Notification to the worker to be dismissed: no specific form required

Remarks:
  • - No specific form expressly required for individual termination other than by way of retrenchment. There is a prior approval mechanism by the Labour Commissioner upon application by the employer.
    The TEWA does not specify the form of the employer's application, however it stipulates that a copy of that application shall be communicated to the workman concerned who shall be afforded the opportunity to be heard.
    The decision of the Labour commissioner granting or refusing dismissal must be in writing and must be communicated to both the employer and the employee (sec. 2 TEWA)
    - Under the IDA, when contemplating termination by way of retrenchment, the employer is required to give the employee notice of such intention in writing (sec. 31 F IDA).

Notice period:
Remarks:
  • - No statutory notice period to be observed under the TEWA. Termination of employment of workers covered by the TEWA for any reason other than disciplinary is subject to the prior approval the Labour Commissioner (sec. 2(1) TEWA) . The decision to grant or refuse approval shall be made within 2 months from the date of receipt of the application (sec. 11 of Industrial Disputes (Hearing and Determination of Proceedings) (Special Provisions) Act, No. 13 of 2003)
    - Under the IDA, those employees not covered by the TEWA, who are not seasonal employees and work for an establishment of more than 15 workers, and who have been employed for more than a year (sec. 31E IDA), are entitled to one month's notice in writing of any retrenchment. The employer may not effect the dismissal until the expiry of two months after notice has been given, unless an agreement to the contrary has been reached with the worker or his or her representative (sec. 31G IDA). The application of this provision has been limited since the enactment of the TEWA which also applies to retrenchment and specifically provides that provisions of the IDA on retrenchment do not apply to any worker covered by the TEWA.
    • tenure ≥ 6 months
      • economic dismissal not covered by the TEWA - 0 month(s).
    • tenure ≥ 9 months
      • economic dismissal not covered by the TEWA - 0 month(s).
    • tenure ≥ 2 years
      • economic dismissal not covered by the TEWA - 1 month(s).
    • tenure ≥ 4 years
      • economic dismissal not covered by the TEWA - 1 month(s).
    • tenure ≥ 5 years
      • economic dismissal not covered by the TEWA - 1 month(s).
    • tenure ≥ 10 years
      • economic dismissal not covered by the TEWA - 1 month(s).
    • tenure ≥ 20 years
      • economic dismissal not covered by the TEWA - 1 month(s).

    Pay in lieu of notice: No

    Notification to the public administration: Yes

    Remarks:
    • - Any termination (other than for disciplinary reasons): see sec. 2 TEWA: prior approval mechanism by the Labour Commissioner if the employer has not obtained the prior consent of the employee in writing.
      - In the event of retrenchment of any employee not covered by the TEWA, who has been employed for more than a year, who is not a seasonal employee and works for an establishment of more than 15 workers, the employer must send a copy of the written notice to the Labour Commissioner (sec. 31F IDA).

    Notification to workers' representatives: No

    Remarks:
    • - No mandatory notification. However, art. 17A TEWA provides for the possibility for the employee who is a trade union member to be represented by a trade union officer in any proceedings before the Labour Commissioner.
      - In the event of retrenchment of a trade union member (when the TEWA does not apply), notice shall be sent to that trade union. art. 31F IDA

    Approval by public administration or judicial bodies: Yes

    Remarks:
    • - Any termination (other than for disciplinary reasons): see sec. 2 TEWA: prior approval mechanism by the Labour Commissioner if the employer has not obtained the prior consent of the employee in writing. The Labour Commissioner shall decide on the employer's application within 2 months from the date of receipt (sec. 11 of Industrial Disputes (Hearing and Determination of Proceedings) (Special Provisions) Act, No. 13 of 2003).

    Approval by workers' representatives: No

    Procedural requirements for collective dismissals for economic reasons (redundancy, retrenchment) - 2013    

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    Definition of collective dismissal (number of employees concerned):
    No statutory definition of collective dismissal for economic reasons.
    However, the TEWA applies to any type of individual dismissal (including economic) other than disciplinary dismissal.
    The IDA defines retrenchment as termination by an employer of the services of a worker or workers on the ground that they are in excess of the number of workers required by such employer to carry on his/her industry.

    Remarks:
    • Definition of retrenchment: sec. 48 IDA.

    Prior consultations with trade unions (workers' representatives): No

    Notification to the public administration: Yes

    Notification to workers' representatives: No

    Remarks:
    • - In the event of retrenchment of a trade union member (when the TEWA does not apply), notice shall be sent to that trade union. art. 31F IDA

    Approval by public administration or judicial bodies: Yes

    Remarks:
    • - Workers covered by the TEWA: prior approval by the Labour Commissioner in the absence of written consent of the worker: sec. 2(1) TEWA)
      - No such approval required under the IDA which only provides for a role for the Labour Commissioner in the settlement of any industrial dispute arising from the intended retrenchment. (sec. 31 H IDA)

    Approval by workers' representatives: No

    Priority rules for collective dismissals (social considerations, age, job tenure): No

    Employer's obligation to consider alternatives to dismissal (transfers, retraining...): No

    Priority rules for re-employment: Yes

    Remarks:
    • Sec. 50 IDA: retrenched workers have priority for re-employment by their former employer. There is no indication as to the duration of such priority.

    Notes / Remarks
    -In the absence of any specific definition and regime governing collective dismissal, the answers provided here relate to individual terminations for economic reasons.
    - As already indicated, the TEWA covers any type of dismissal other than disciplinary provided that the worker concerned falls within its scope of application (= private employee, working in establishment with at least 15 workers, with at least 180 days' service). The TEWA does establish a general mechanism of prior approval by the Labour Commissioner and does not contain any specific provision applicable to retrenchment.
    - The IDA which was enacted 21 years before the TEWA contains specific provisions on retrenchment (part IV B). However, the application of these provisions are somewhat limited since the adoption of the TEWA which specifically stipulates that the provisions on retrenchment of the IDA do not apply to workers covered by the TEWA.

    Severance pay and redundancy payment - 2013    

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    Severance pay:
    Remarks:
    • Under the Payment of Gratuity Act [PGA], upon any termination of employment, every employer who employs 15 or more shall pay to any monthly-paid employee who has worked for at least 5 years a gratuity gratuity payment which amounts to half a month's salary for each completed year of service, or 14 days' wages per year of service for non-monthly paid workers.
      This indemnity is payable regardless of the reason for termination (resignation, dismissal, retirement, death of the worker, by operation of law, or otherwise). See sec. 5(1) and 6 PGA.
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0 month(s)
    • tenure ≥ 2 years: 0 month(s)
    • tenure ≥ 4 years: 0 month(s)
    • tenure ≥ 5 years: 2.5 month(s)
    • tenure ≥ 10 years: 5 month(s)
    • tenure ≥ 20 years: 10 month(s)
    Redundancy payment:
    Remarks:
    • No specific redundancy payment. Severance pay is payable in the event of any termination including for economic reasons. See sec. 5(1) and 6 PGA.
    • tenure ≥ 6 months: 0 month(s)
    • tenure ≥ 9 months: 0 month(s)
    • tenure ≥ 1 year: 0 month(s)
    • tenure ≥ 2 years: 0 month(s)
    • tenure ≥ 4 years: 0 month(s)
    • tenure ≥ 5 years: 2.5 month(s)
    • tenure ≥ 10 years: 5 month(s)
    • tenure ≥ 20 years: 10 month(s)

    Avenues for redress (penalties, remedies) and litigation procedure for individual complaints - 2013    

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    Compensation for unfair dismissal - free determination by court: No

    Remarks:
    • 1) No compensation in lieu of reinstatement awarded by the Labour Commissioner under the TEWA except in the event of closure of the enterprise, in which case compensation awarded is subject to legal limits (secs. 5, 6 and 6A TEWA - see below).

      2) Under the IDA, there are no limits on compensation awarded by the Labour Tribunal: see sec. 31C(4) and 31C(6)(c).

    Compensation for unfair dismissal - Legal limits (ceiling in months or calculation method):
    1) Remedies under the TEWA:
    - Any dismissal in contravention of the provision of the TEWA (=without prior approval of the Labour Commissioner or prior consent of the worker) is illegal, null and void and therefore entails reinstatement and payment of back wages. The TEWA also foresees the possibility for the worker whose employment has been terminated to receive "any other legal remedy".
    -Under the TEWA, compensation in lieu of reinstatement is only payable in the event of termination by the employer resulting from the closure of any business, trade or industry in violation of the TEWA according to the following formula:
    * 1 to 5 years of service: 2.5 months per year of service (max. compensation: 12.5 months)
    * 6 to 14 years of service: 2 months per year of service (max. compensation: 30.5 months)
    * 15 to 19 years of service: 1.5 months per year of service (max. compensation: 38 months)
    * 20 to 24 years of service: 1 month per year of service (max. compensation: 40 months)
    * 25 to 34 years of service: 0.5 month per year of service (max. compensation: 48 months)

    2) Remedies under the IDA:
    Any relief or redress may be granted by the Labour Tribunal including compensation in lieu of reinstatement freely determined by the Tribunal.

    Remarks:
    • 1) TEWA:
      Sec. 5, 6 TEWA. See also sec. 6B TEWA on the right to apply for any other legal remedy"
      Sec. 6A(1) and 6D TEWA: illegal dismissal resulting from the closure of any business, trade or industry. The formula to be followed for the computation of compensation to be paid to a worker in such case was set out by the Labour Commissioner (under sec. 6D of the TEWA) in Order No. 1384/07 of 15 March 2005.
      2) IDA: see sec. 31C(4) and 31C(6)(c).

    Reinstatement available: Yes

    Remarks:
    • Sec 5 TEWA: termination by the employer in violation of the provision of the TEWA shall be illegal, null and void.
      Sec. 6 TEWA: Reinstatement.

    Preliminary mandatory conciliation: No

    Remarks:
    • - No conciliation foreseen under the TEWA.
      - Under the IDA, industrial disputes can be settled by conciliation by the labour commissioner. However, such conciliation is not mandatory (sec. 3, secs. 11 to 15 IDA).

    Competent court(s) / tribunal(s): labour court; administrative body

    Remarks:
    • - Complaints alleging any violation of the TEWA shall be brought before the Labour Commissioner within 6 months from the date of the dismissal (sec. 6 and sec. 6B TEWA, as amended in 2008 (previously 3 months).
      Complaints relating to the enforcement of the Labour Commissioner's payment orders rest with the Magistrate's Court.
      - Pursuant to the IDA, the labour tribunals have jurisdiction over applications concerning employment termination by the employer and payment of gratuity or other benefits arising from that termination provided that such applications are made within 6 months from the date of termination (sec. 31B(1) and sec. 31B(7) IDA, as amended in 2008 (previously 3 months).

    Existing arbitration: Yes

    Remarks:
    • - No arbitration under the TEWA. Disputes regarding terminations in violation of the approval requirement of that Act
      are heard by the Labour Commissioner (sec. 6 TEWA)
      However, sec. 6B provides that the TEWA shall not be construed as affecting the rights of a workman whose employment has been terminated to apply for any other legal remedy in respect of such termination or as affecting the jurisdiction of any court, tribunal or institution to grant relief in respect of such termination.
      - Under the IDA, industrial disputes can be referred to arbitration by the labour Commissioner if the parties so agree, or by the Minister of Labour without prior consent of the parties if he or she considers that industrial dispute to be of a minor nature. (sec. 3(1) and 4(1) IDA).
      Industrial dispute is defined under sec. 48 IDA as "any dispute or difference between an employer and a workman or between employers and workmen or between workmen and workmen connected with the employment or non-employment, or the terms of employment, or with the conditions of labour, or the termination of the services, or the reinstatement in service, of any person and for the purposes of this definition " workmen " includes a trade union consisting of workmen ".
      The IDA expressly specifies that industrial dispute arising from retrenchment may be settled by arbitration (sec. 31H)

    Length of procedure: 2 month(s) (statutory)

    Remarks:
    • The Industrial Disputes (Hearing and Determination of Proceedings) (Special Provisions) Act, No. 13 of 2003 sets out statutory time frames for adjudicating complaints made under the TEWA and the IDA as follows:
      1) Applications made to the Labour Commissioner under the TEWA: 2 months for the date of the receipt of the application (sec. 12 and 13).
      2) Applications to the Labour Tribunal: 4 months from the date of the application (sec. 5(1)). Appeals against the tribunal's decision shall be lodged within 30 days of the decision and decided within 4 months (sec. 6).

    Notes / Remarks
    In the absence of requirement of valid grounds for dismissal, this section refers to the various remedies and procedures foreseen in the event of non compliance with the provisions on termination of the TEWA and the IDA which covers industrial disputes in general and includes termination aspects such as retrenchment and prohibited grounds for dismissal.

    Source of additional information - 2013    

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    Links

    LawNet Government of Sri Lanka »
    This website provides access to statutes (including consolidated versions), case law, and academic articles covering inter alia labour law issues.