Five Must-Know Labour Laws in Sri Lanka

Feeling stressed about work in Sri Lanka? Unsure about your pay, hours, or leave entitlements? And also, lazy to go through those lengthy legal acts? Don’t get lost in legalese! This blog is your easy-to-understand guide to Sri Lankan labour law. We’ll translate the complex legal jargon into clear and simple terms, so you can navigate your workplace with confidence and understand your rights.  

1. Wages Board Ordinance (No. 27 of 1941): 

• Purpose: Regulates wages and employment conditions in various industries. 
• Employer Responsibilities:  

1. Pay wages on or before the due date. 
2. Ensure wages meet minimum wage requirements. 
3. Maintain accurate wage records (employee details, wages paid, working hours, etc.). 
4. Preserve wage records for at least six years. 

• Employee Responsibilities:  

1. Comply with lawful work orders. 
2. Report to work regularly (Late attendance and absence without any reason is an offense)  
3. Obtain prior permission before distributing any printed materials within the workplace, otherwise it’s illegal. 

2. Shop and Office Employees Act (No. 19 of 1954): 

• Purpose: Regulates work hours, remuneration, and other aspects of employment in shops and offices. 
• Minimum Age of Employment: 16 years old. 
• Normal Working Hours:  

1. 8 hours per day (excluding meal breaks). 
2. 05 hours on any day of the week (half day) 
3. 45 hours per week. 

• Specific restrictions for individuals under 18 years old regarding working hours and timeframes. 
• Males aged sixteen and females under eighteen cannot work in shops or offices before 6 a.m. or after 6 p.m. 
• Females over 18 can work in shops or offices between 6 p.m. and 8 p.m. 
• Females over 18 can work in hotels or restaurants between 6 p.m. and 10 p.m. 

• Overtime:  

1. Defined as work exceeding normal hours. 
2. Requires payment at 1.5 times the normal hourly rate. 
3. Overtime shall not exceed an aggregate of twelve hours in any one week. 

• Leave Entitlements:  

1. Weekly holidays (1 and a half days). 
2. Poya holidays (religious holidays). 
3. Public holidays (8). 
4. Annual leave (14 days). 
5. Casual leave (7 days). 

3. Employee’s Provident Fund (EPF) Act (No. 15 of 1958): 

• Objective: Provides financial security for private sector employees upon retirement. 
• Coverage: Applies to employees in private firms, state-sponsored corporations, and statutory boards, unless enrolled in approved provident funds. 
• Membership: Mandatory for all employees over 16 years old, regardless of employment type (permanent, temporary, permanent, shift work, apprentice, casual, piece rate, contract basis, commission basis, etc.). 
• Registration: Requires registration within 14 days of employment through submission of specific forms to the nearest labour office. 
• Withdrawal of benefits:  

1. When you reach retirement age and cease the employment 
2. Leaving employment on grounds of marriage 
3. Cessation of employment due to total incapacitation 
4. Cessation of employment on leaving to a foreign country for permanent residency 
5. When engaged in a permanent pensionable post in government or local government service 

4. Payment of Gratuity Act (No. 12 of 1983): 

• Purpose: Provides a one-time payment to eligible employees upon termination of service, considering their length of service. 
• Eligibility: Applies to employees who have completed at least five years of service under an employer with at least 15 employees in the past year. 
• Calculation:  

1. Monthly paid employees: Last drawn monthly salary x Number of years of service / 2 
2. Daily paid employees: (Fourteen days’ salary x Number of years of service) 
3. Piece-rate workers: Average wage/salary for the past 3 months x 14 x Number of years of service 

5. The Factories Ordinance (No. 45 of 1942): 

• Objective: To safeguard the well-being of factory workers by establishing crucial regulations: 
• Registration: All factories, regardless of their establishment date (before or after the notified date), must be registered with the designated authorities (https://www.ilo.org/colombo/lang–en/index.htm). This ensures proper oversight and adherence to safety standards. 
• Building Approval: Any plans for constructing, extending, or converting a building for factory use require prior approval from the designated authorities. This ensures the building adheres to safety regulations and is suitable for its intended purpose. 
• Safety and Health: The ordinance mandates specific safety measures and health standards within factory premises to prevent accidents and occupational illnesses. This includes requirements for: 
• Cleanliness and ventilation: Maintaining a clean and well-ventilated work environment to promote worker health and well-being. 
• Sanitation: Providing adequate and sanitary facilities, including toilets and washing areas, for all workers to maintain hygiene and prevent the spread of diseases. 
• Machinery and Equipment: Ensuring the safe operation and maintenance of machinery and equipment within the factory through regular inspections and adherence to safety protocols. This minimizes the risk of accidents and injuries.
• Working Conditions: The ordinance regulates various aspects of the work environment, including: 
• Maximum working hours, overtime regulations and leave entitlements: These typically align with the provisions outlined in the Shop and Office Employees Act (No. 19 of 1954) to ensure consistency across sectors and prevent exploitation. 
• Accident Reporting: The ordinance mandates the reporting of accidents and occupational diseases to the relevant authorities. This facilitates proper investigation, identification of potential hazards, and implementation of preventative measures to ensure worker safety in the future. 

Conclusion  

Understanding Sri Lankan labor laws is crucial for both employees and employers to operate within legal boundaries. This blog has gone through some of the main ones, like the Wages Board Ordinance, Shop and Office Employees Act, Employee’s Provident Fund Act, Payment of Gratuity Act, and the Factories Ordinance, explaining what they mean in everyday terms. Whether it’s knowing when you should get paid, how much leave you’re entitled to, or what’s up with factory safety, understanding these laws helps employees get a better grasp of their rights and obligations at work in Sri Lanka.