Employment law in Sri Lanka
Employment law in Sri Lanka is governed by a combination of statutory laws and judicial decisions, which regulate various aspects of the employer-employee relationship. The key legislative framework includes the Industrial Disputes Act, the Shop and Office Employees Act, and other regulations that cover wages, working conditions, and workers’ rights. Sri Lanka is also a member of the International Labour Organization (ILO), and its labor laws generally align with international labor standards.
Here’s an overview of employment law in Sri Lanka:
1. Employment Contracts:
Types of Contracts: Employment contracts can be either fixed-term or indefinite-term. Indefinite-term contracts are more common for permanent employment, while fixed-term contracts are used for temporary or project-based work.
Written Contracts: The Industrial Disputes Act does not require all employment contracts to be written, but employers are encouraged to provide a written contract, especially for employees working in regulated sectors. Written contracts must include essential details such as job duties, wages, working hours, and leave entitlements.
Probation Period: A probationary period can be agreed upon, typically lasting 3 to 6 months. During this period, either party can terminate the contract with a shorter notice period.
2. Working Hours and Rest:
Standard Working Hours: The standard working hours in Sri Lanka are generally 8 hours per day or 48 hours per week. However, overtime is allowed in some industries, and employees who exceed the standard working hours are entitled to overtime compensation.
Overtime: Employees who work beyond the standard working hours are entitled to overtime pay, which is usually calculated at 1.5 times the regular hourly wage for the first 2 hours and 2 times the regular hourly wage for any additional hours worked.
Rest and Breaks: Employees working more than 6 hours per day are entitled to a break of at least 30 minutes. Employees are also entitled to 1 day off per week, which is typically Sunday, unless otherwise agreed upon in the contract.
3. Minimum Wage:
Minimum Wage: Sri Lanka sets a minimum wage for various sectors, including plantation workers, industrial employees, and those in the garment and construction industries. The minimum wage is adjusted periodically by the government and can vary depending on the region and sector.
Employers must ensure that employees are paid at least the legal minimum wage applicable to their work. The minimum wage serves as a baseline, and wages can be higher based on experience, skills, or industry-specific agreements.
4. Paid Leave:
Annual Leave: Employees are entitled to 14 days of paid annual leave after 1 year of continuous service. This leave can be taken in the form of full-day leave or half-day leave, depending on the employment agreement.
Public Holidays: Employees are entitled to paid leave on national public holidays recognized by the government. If an employee works on a public holiday, they are entitled to additional compensation or time off in lieu.
Sick Leave: Employees are entitled to 7 days of paid sick leave per year after 1 year of service. If an employee falls ill and requires more than 7 days of sick leave, the employer may require a medical certificate to approve the additional days.
Maternity Leave: Female employees are entitled to 84 days of maternity leave (approximately 12 weeks), which includes 6 weeks before and 6 weeks after childbirth. Maternity leave is typically paid at full salary, and the employer may be reimbursed by the government for part of the maternity pay.
Paternity Leave: Sri Lanka does not have statutory paternity leave. However, some employers may offer leave to fathers, which depends on the terms of the employment contract.
5. Termination of Employment:
Dismissal: Employees in Sri Lanka can be dismissed for reasons such as misconduct, redundancy, or failure to meet performance expectations. Employers must follow a proper procedure when dismissing an employee, including giving a valid reason for dismissal.
Notice Period: Employees or employers must provide a notice period if they wish to terminate the employment relationship. The required notice period depends on the length of service:
Up to 1 year: 1 week notice,
1 to 3 years: 1 month notice,
Over 3 years: 2 months notice.
Severance Pay: Employees who are dismissed under certain conditions, such as redundancy or unfair dismissal, may be entitled to severance pay. Severance pay is generally based on the length of service and the employee's final salary. In some cases, the employee may also be entitled to compensation for unlawful dismissal.
6. Social Security and Benefits:
Provident Fund and Pension: Sri Lanka has a Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF), which provide retirement benefits and other social security support to employees. Both employers and employees contribute a percentage of the employee’s salary to these funds.
The EPF provides a retirement pension to employees, which is paid out when they reach the age of 55.
The ETF provides benefits for employees in case of disability, retirement, or death.
Health Insurance: Employees are generally covered by Sri Lanka's national health system, and employers may provide additional private health insurance benefits, particularly for senior employees or higher-level positions.
7. Employee Rights and Protection:
Anti-Discrimination: The Sri Lankan Constitution and various laws prohibit discrimination based on race, religion, gender, disability, or other protected characteristics. Employers must provide equal opportunities in hiring, promotion, and pay.
Health and Safety: Employers are required to ensure a safe working environment for employees, which includes adhering to safety standards and regulations. In industries like construction, mining, and manufacturing, special attention must be given to workplace safety, and protective equipment should be provided.
Trade Unions: Employees have the right to join trade unions and engage in collective bargaining to improve their working conditions, wages, and benefits. The law protects employees’ rights to form and participate in unions without fear of retaliation.
Employment Disputes: Disputes between employers and employees can be resolved through mediation by the Labour Department or through the Industrial Court. In some cases, the dispute may be referred to the Labour Commissioner for resolution.
8. Foreign Workers:
Work Permits: Foreign nationals wishing to work in Sri Lanka must obtain a work permit. The employer must apply for the work permit, which is typically issued for specific jobs. Work permits are usually granted for a maximum of 3 years, with the possibility of extension.
Employment Rights: Foreign workers in Sri Lanka are entitled to the same basic rights as local employees, including wages, working hours, and protection from discrimination. However, they must comply with the conditions of their work permit.
9. Industrial Relations:
Industrial Disputes: The Industrial Disputes Act governs how disputes between employers and employees are handled. In case of a dispute, the Labour Commissioner may mediate or refer the dispute to the Industrial Court.
Collective Bargaining: Sri Lanka supports the process of collective bargaining through unions, where workers can negotiate with employers to achieve better working conditions, salaries, and benefits.
Conclusion:
Sri Lanka’s employment law ensures basic protections for employees, including fair wages, safe working conditions, and the right to leave and benefits like maternity, sick leave, and social security. The Industrial Disputes Act and other labor laws aim to promote fair labor practices, with a focus on worker protection and dispute resolution. Both employers and employees are encouraged to be aware of their rights and obligations under the law to maintain a harmonious working relationship.
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