SRI LANKA Law and Practice Contributed by: Ayanthi Abeyawickrama, Varners
and retirement benefits, arising from legislation mentioned in 4.1 Nature of Applicable Regula- tions . There is no legal restriction on the duration of employment contracts in Sri Lanka. Both perma - nent and fixed-term contracts are recognised. However, courts and tribunals are cautious of abuse of fixed-term arrangements. Where fixed- term contracts are renewed repeatedly without a genuine basis, they may be reclassified as per - manent contracts, giving rise to the same pro - tections and entitlements as permanent employ - ment, including the need to obtain prior approval under TEWA for termination. Additionally, Sri Lankan law now prescribes a statutory minimum retirement age of 60 years for all private sector employees, as introduced by the Minimum Retirement Age of Workers Act, No 28 of 2021. Employment contracts that specify a lower retirement age must be adjusted accord - ingly, unless an exception is provided by regula - tion. Employers may, however, retain employees beyond age 60 based on mutual agreement. 4.3 Working Time Working time regulations are primarily governed by the Shop and Office Employees (Regulation of Employment and Remuneration) Act, No 19 of 1954, and by the Wages Boards Ordinance for all other trades. For employees falling under the Shop and Office Employees Act, the standard working time is generally limited to eight hours per day and 45 hours per week, excluding intervals for rest and meals. Overtime work, defined as work per - formed in excess of the standard daily or weekly limits, must be compensated at a premium rate. The standard rate for overtime is 1.5 times the normal hourly wage, while work performed on
public holidays is usually paid at two times the normal rate. The law imposes a cap on overtime, limiting it to a maximum of 12 hours per week. For sectors covered by the Wages Boards Ordi - nance, working hours and overtime entitlements are determined by the respective Wages Board constituted for the trade. While the structure of these boards allows for some variation depend - ing on the nature of the industry (eg, manufactur - ing, plantation, hospitality), the standards gener - ally align with the framework established under the Shop and Office Employees Act. In most cases, Wages Boards also provide for overtime compensation at 1.5 times the regular wage, though specific entitlements and limits may vary slightly across sectors. Employers are legally obligated to maintain accurate records of working hours and over - time, and failure to compensate for overtime in accordance with applicable law may attract penalties and enforcement action by the Labour Department. 4.4 Termination of Employment Contracts Sri Lanka is not an “employment-at-will” jurisdic - tion. The termination of individual employment contracts is governed by TEWA, which imposes strict limitations on the unilateral termination of employment by employers. Under TEWA, an employer cannot lawfully termi - nate the services of a “workman” other than for misconduct, except with the prior written con - sent of the employee or the prior written approv - al of the Commissioner General of Labour. This applies even where the employment contract permits termination on notice. Accordingly, ter - mination without cause or justification, com -
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