Overview of Sri Lankan Labour Laws and Employment Policies

Employment Law Overview

• Key Legislations:
  • Shop and Office Employees Act (Act No. 19 of 1954)
  • Factories Ordinance (1950)
  • Wages Boards Ordinance (1941)
• Legal Characteristics:
  • Aim to protect employees' rights and welfare
  • Regulate working hours, leave, severance pay, and social security

Employment Contract Requirements

• Contract Types:
  • Fixed-term contracts
  • Indefinite-term contracts
• Contractual Provisions:
  • Must include details of job description, remuneration, working hours, etc.
• Language and Currency:
  • Contracts must be in a language familiar to the employee
  • Currency unit is Sri Lankan Rupee (LKR)

Working Hours Regulations

• Standard Working Hours:
  • 45 hours per week, Monday to Friday, 8 hours per day
• Rest Days and Breaks:
  • At least one rest day per week
  • One hour meal break must be provided if working more than 8 hours per day

Leave Policies

• Annual Leave:
  • 14 days of paid annual leave per year
• Public Holidays:
  • 20 national public holidays
• Special Leave:
  • Sick Leave: Up to 7 days of paid sick leave per year
  • Maternity Leave: 84 days of paid maternity leave
  • Paternity Leave: No statutory paternity leave

Employee Severance and Termination

• Notice Period:
  • Less than 1 year of service: Nil
  • More than 1 year of service: 30 days
• Severance Pay:
  • 1-5 years of service: 2.5 months' salary for each year of service
  • 6-14 years of service: 2 months' salary for each year of service
  • 15-19 years of service: 1.5 months' salary for each year of service
  • 20-24 years of service: 1 month's salary for each year of service
  • 25-34 years of service: 0.5 months' salary for each year of service
• Protection Against Unfair Dismissal:
  • Employer must obtain approval from the Commissioner of Labour or employee's consent to dismiss
  • Employer must provide written reasons for dismissal

Taxation Laws

• Personal Income Tax:

  • Salary Range (LKR)	Tax Rate
    0 - 100000	0%
    100001 - 141667	6%
    141667 - 183333	12%
    183333 - 225000	18%
    225000 - 266667	24%
    266667 - 308333	30%
    308333 and above	36%

• Social Security Contributions:

  • Employee: 12%
  • Employer: 15%

Health Insurance

• Insurance Policy:
  • Employees are required to participate in the universal healthcare system
• Coverage:
  • Basic healthcare services

Compensation and Benefits

• Minimum Wage:
  • LKR 12,500 per month
• Salary Structure:
  • Basic salary, allowances, bonuses, etc.

Work Permits and Visas

• Permit Requirement:
  • Foreign employees require a work permit
• Application Process:
  • Employer applies to the Department of Labour
  • Applicant provides necessary documentation

Confidentiality and Non-Compete Clauses

• Enforceability:
  • Confidentiality and non-compete clauses are enforceable in Sri Lanka
• Common Provisions:
  • Restricting employees from working for competitors after leaving employment
  • Requiring employees to keep confidential information secret

Training and Development

• Legal Requirements:
  • Employers must provide safety training and skill enhancement training
• Government Support:
  • Government provides training grants and incentives

Workplace Diversity and Inclusion

• Legal Requirements:
  • Prohibit discrimination based on race, religion, gender, etc.
• Enforcement Measures:
  • Employers must have anti-discrimination policies and procedures in place

Remote Work Policies

• Legal Framework:
  • No specific legal framework for remote work
• Tax and Insurance Implications:
  • Remote work may impact tax and social security contributions

Authoritative Website Addresses

• Department of Labour: https://www.labour.gov.lk/