Sources of regulation
The main pieces of legislation governing the
termination of employment in Sri Lanka are:
- the
Termination of Employment of Workmen (Special Provisions) Act No. 45 of
1971 (TEWA), as amended in 2003, and
- the
Industrial Disputes Act No. 43 of 1950 (IDA), as amended in 2003.
Scope of legislation
Both the IDA and TEWA apply to workers in the
private sector. However, the TEWA does not apply to workers in establishments
with fewer than 15 workers, to public servants and workers with less than
six months’ service (secs. 3(1)(a), (b) and (c), TEWA). The TEWA applies
to an extensive range of industries, listed in the Schedule to that Act,
including all shops, offices and factories.
The provisions of the IDA do not cover the workers
in the enterprises employing less than 15 workers, seasonal workers and workers
with less than one year of service in the enterprise (sec. 31E(1), IDA).
Contracts of employment
Both the IDA and TEWA define “worker” broadly
as any person who works under a contract of employment in any capacity, including
apprentices (sec. 3(2), TEWA, and sec. 48, IDA). No distinction is made in
the legislation between casual, probationary and fixed-term workers.
Termination of employment
The TEWA provides that employment may terminate
with the written consent of the worker (sec. 2(1)(a), TEWA). Aside from this,
both the TEWA and the IDA only regulate termination of employment at the
initiative of the employer.
Dismissal
No employer can terminate the employment of
any worker without (sec. 2(1), TEWA):
- the
prior consent in writing of the worker; or
- the
prior written approval of the Commissioner.
The legislative provisions governing termination
of employment at the initiative of the employer in Sri
Lanka are somewhat unusual, in that they do not set
any standard against which dismissals are to be measured, yet provide stringent
procedural controls on dismissals. Indeed, the TEWA specifically provides
that the Labour Commissioner - from whom the employer must seek authorization
to dismiss - may decide the application “in his/her absolute discretion”
(sec. 2(2)(b), 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).
The IDA prohibits unfair labour practices, such as terminating the employment
relationship of a worker on the grounds of his/her involvement in trade
union activities or for filing a complaint against the employer (sec. 32A,
IDA).
Moreover, the IDA does make 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).
Under sec. 50 of the IDA, retrenched workers
have priority for re-employment by their former employer.
Notice and prior procedural safeguards
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. In such
cases, the employer must also give this period of notice to the trade union,
if the worker is a trade union member, and send a copy of such notice to
the Commissioner (sec. 31F, IDA). Nor may the employer 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).
As discussed above, employers must obtain the
approval of the Labour Commissioner for the dismissal of workers covered
by the TEWA.
In case of dismissal on disciplinary grounds,
, the employer must notify the worker concerned in writing of the reasons
for the termination before the expiry of the second working day after the
termination (sec. 2(5), TEWA, as inserted by the 1988 Amendment Act).
Severance pay
There is no legislative provision governing
severance pay in Sri Lanka.
Avenues for redress
Sec. 5 of the TEWA provides that any dismissal
without the worker’s consent or the approval of the Labour Commissioner is
illegal, null and void.
However, there is no machinery for persons aggrieved
by the decision of the Commissioner to appeal, as the decision is final (sec.
2(2)(f), TEWA).
The worker is entitled to seek relief in case
of illegal termination of his/her employment. The Commissioner may order
the worker’s reinstatement or financial compensation to be paid by the employer
(secs. 6 and 6A(1), TEWA).
In Order No. 1384/07 of 15 March 2005, the Commissioner
of Labour set out the formula (under sec. 6D of the TEWA) to be followed
for the computation of compensation to be paid to a worker in case of illegal
dismissal. The amount of the compensation is 0.5 to 2,5 months salary for
each year of service, depending on the number of years of service completed
by the worker at the date of termination of his/her employment.
In accordance with Law No. 12 of 2003 amending
the TEWA, the worker must bring the claim for illegal dismissal before the
Commissioner within three months of the termination of employment (sec. 6B(1),
TEWA).
For dismissals which are invalid under the IDA,
the worker may apply to a Labour Tribunal for reinstatement or compensation
(secs. 31B(1)(a) and 31B(6)(c), IDA). The complaint has to be brought within
six months of the dismissal (31B(7), IDA).
Further information
|
 |
|
|
|
