Key Takeaways
- Legal Framework: Under the employment law in Sri Lanka, The Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971 (TEWA) and the Industrial Disputes Act govern employment terminations. Employers cannot dismiss employees without just cause or proper legal procedures.
- Valid Grounds for Termination: Common justifiable reasons for dismissal include serious misconduct (e.g., theft, fraud, or violent behaviour), poor performance, economic restructuring, or business closure.
- Procedural Requirements: Employers must provide written notice for termination and seek the approval of the Commissioner of Labour for layoffs due to redundancy or restructuring. In cases of misconduct, a fair disciplinary hearing is required.
- Unlawful Termination Consequences: If found guilty of unlawful termination, employers may face orders for employee reinstatement or be required to pay compensation for wrongful dismissal.
- Employee Rights: Employees who believe they were unlawfully terminated can file a complaint with the Department of Labour or the Labour Tribunal, seeking reinstatement or compensation for lost wages.
Introduction
Under the Employment Law in Sri Lanka, employment termination generally falls into two main types: resignation by the employee and dismissal by the employer. Both are regulated by labour laws, with key legislation being the Termination of Employment of Workmen (Special Provisions) Act (TEWA), No. 45 of 1971, the Industrial Disputes Act, No. 43 of 1950.
When considering about terminations of employees by employer there can be identity unlawful terminations in Sri Lanka. Unlawful termination occurs when an employer dismisses an employee in violation of labor laws or the terms of the employment contract. In Sri Lanka, an employer cannot arbitrarily dismiss a worker without just cause or without the legal procedures. Employers must have valid grounds to terminate employment. These include retrenchment due to economic reasons, restructuring, or closure of the business, serious misconducts of employee (Theft, fraud, or violent behaviour), poor performance etc.
Procedures for Termination
The Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971 governs the termination of employees in Sri Lanka. Section 2 of the act mandates that employers cannot dismiss a worker without either obtaining the worker’s consent or receiving written approval from the Commissioner of Labour.
Therefore, when terminating employment, employers must follow these procedural steps to ensure compliance with the law:
- Written Notice: Employers are required to provide a written termination notice, clearly outlining the reasons for dismissal.
- COL Approval: In cases where termination is due to restructuring or redundancy, employers must seek prior approval from the Commissioner of Labour. The application should include all relevant documentation to support the claim, including financial reports or evidence of job function changes.
- Disciplinary Hearings for Misconduct: If termination is based on misconduct, the employer must conduct a fair disciplinary hearing. Failure to provide a proper hearing can lead to a finding of unlawful termination.
What happens if termination is deemed unlawful?
According to industrial dispute act, if an employer unlawfully terminates an employee, the Labour Tribunal or a competent court can:
- Order reinstatement of the employee.
- Award compensation for wrongful dismissal, typically based on factors like the employee’s length of service, wage, and circumstances of termination.
When considering case laws regarding this, Somawathie v Baksons Textile Industries Ltd (79 (1) NLR 204),the court found that termination due to gossiping was disproportionate to the misconduct. While reinstatement was not ordered, the worker was awarded compensation.
Furthermore, in the case of Ceylon Ceramics Corporations v Weerasinghe (SC 24/76), the court tackled the issue of whether a wrongfully dismissed employee should always be reinstated. The general principle derived from this case is that reinstatement is the usual remedy in cases of wrongful dismissal. However, this principle is not absolute, and the court introduced the possibility of exceptional circumstances where reinstatement may not be appropriate.
What should employees do if they face unlawful termination?
If you believe you were unlawfully terminated, you should:
- File a complaint with the Department of Labour or the relevant Labour Tribunal.
- Provide all necessary documentation, such as the employment contract and any written notice of dismissal.
- Seek legal counsel to guide you through the process, especially if you plan to file for compensation or reinstatement.
Under the employment law in Sri Lanka, unlawful termination claims can lead to significant legal consequences for employers. Employers must ensure that all terminations are justified and follow the proper procedures under TEWA and the Industrial Disputes Act. On the other hand, employees who believe they have been wrongfully dismissed should promptly seek redress through the Labour Tribunal, which has the power to order reinstatement or compensation for unlawful terminations.
