"Progressive minds pave the path of knowledge, illuminating the

world with their curiosity and fearless exploration."

OVER SIGHT
Oshadi Malimage
Sumudu Rathnasiri

Special thanks to:

Achala Tharaka Gunawardana

Compilation:

Nushka Mohamed
Akshayini Surendran
Rajendran Rahul
Rashmi Weerasekara
Navod Rathnasekara

Team:

Ashwin Pragash
Fathima Rifka
Narthika Rajendra
Helanga Epitawela
Nethidi Lankeshwara
Krissnavene Saravanan
Jarshshini Kandeepan
Trincy Vidanagamachchi
Razka Bary
Shadini Narathota
Menaka Wijewardhana
Ruvinya Medhavini
 The purpose of this Model Answer Guide is to assist students in understanding the structure and
approach that can be employed when answering questions based on the immediate past paper.
It aims to showcase a possible way to organize information and present it in a coherent manner.

 This is compiled by students who bring a wealth of knowledge and experience gained from
extensive practice and preparation for examinations, making their insights and recommendations
invaluable for drafting effective answers.

 Furthermore, this Model Answer compilation is not to be relied upon solely, and we strongly
recommend that students may use it along with their own research, class notes, textbooks, and
other relevant resources to develop a comprehensive understanding of the topic at hand for
diligent study, preparation, and understanding of the subject matter.

 Pay close attention to the instructions provided for each question, specific requirements such as
citing specific cases or statutes, or discussing different perspectives.

 Assess the entire exam quickly, and allocate time for each section or question based on its
weightage or difficulty. This will help you manage your time effectively and ensure that you have
enough time for all the questions. Keep track of your time while answering each question. Do not
let one difficult question derail your progress.

 Analyze the question carefully before answering. Understand what is being asked, identify any
keywords or specific instructions, and determine the type of response required (e.g., explanation,
analysis, comparison, etc.) Look for keywords that provide clues about the legal principles, tests,
or elements that should be discussed

 Outline the main points or arguments you want to include. Stay focused on addressing the
question directly and providing relevant supporting details or examples. Organize your arguments,
legal analysis, and supporting authorities in a logical and coherent manner. Ensure that your
arguments are well-supported and your analysis is sound.

 If time permits, review your answers before submitting your exam. Check for any errors, ensure
your responses are clear and coherent, and make any necessary revisions. Pay attention to
legibility.

 Refer to relevant legal authorities: Support your arguments and analysis by referring to applicable
case law, statutes, regulations, or legal principles. Provide accurate citations and explain how the
authorities are relevant to your analysis.

"Embrace exams as stepping stones to a brighter future and let your progress
illuminate the way towards success. Best of luck!!"

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 Model Answers
SRI LANKA LAW COLLEGE
ATTORNEYS AT LAW PRELIMINARY YEAR EXAMINATION-OCTOBER 20
INDUSTRIAL LAW (LW-108)

Answer Four (4) Questions including Question No.01 (Compulsory Question) from Part 1 and
Two (2) Questions from Part 2.

01. Lanka Human Resource Managers' Association has requested you to make a
presentation on "Legal Aspects Relating to Disciplinary Termination in the Private
Sector in Sri Lanka". Explain the key points that you would include in your
presentation. (20 Marks)

In the private sector of Sri Lanka, disciplinary termination is a significant aspect of employment
management. It involves the termination of an employee's services due to misconduct.
Understanding the legal framework surrounding disciplinary termination is crucial for
employers and human resource managers. This presentation aims to highlight key points related
to the legal aspects of disciplinary termination in the private sector of Sri Lanka, including the
definition of misconduct, burden of proof, the importance of fair inquiries, wage payment
during suspensions, and the requirement for prompt communication of disciplinary reasons to
employees.

There are several types of termination of services of the employees which includes disciplinary
termination as well. Disciplinary termination is a consequence of misconduct. According to the
Shalimar Rope Works Mazdoor union V. Shalimar Rope Works Ltd case, misconduct means
violation of expressed or implied conditions of employment and the violation adversely affects
the smooth and efficient functioning of the workplace. An employer may terminate the
employment under the category of serious misconduct or minor misconduct. Absence,
dishonesty, abuse, assault, late attendance, disobedience, and drunkenness are some types of
misconduct.

According to section 31 B (1)(a) of IDA, a workman whose services have been terminated
under disciplinary grounds can make an application to LT for relief against the termination.
The employer has the burden on him to prove and justify the termination of services.

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In Piyasena Silva V Ceylon Fisheries Corporation & Others case, the courts decided that the
Standard of proof before LT is the balance of probability. In Associated Battery Manufactures
[Ceylon] Ltd V. Engineering Workers Union case, the court stated that the termination of
employment which includes guilty of a criminal act, doesn't need to be established by proof
beyond reasonable doubt as in a criminal case.

Sri Lankan Labour Legislation does not have any provision which mandates an employer in
the private sector to conduct a disciplinary inquiry before the termination of services. Though,
It is advisable to have an inquiry before terminating the services according to natural justice.

Labour Tribunal will consider the evidence given in a disciplinary inquiry, when an employer
goes to a disciplinary inquiry some employers might suspend the wages of a workman pending
inquiry. The employee cannot be deprived of his wages during his period of suspension pending
disciplinary inquiry. In Cooks Thread Lanka (Pvt) Ltd V. Samarasundera Case, Supreme
Court decided that the employer should pay the wages to the employee during the period of
suspension pending inquiry until they terminate him.

Section 2(5) of the TEWA provides that the workman should be given the disciplinary reasons
by the employer for the termination, within 02 days [working] from the date of termination in
writing. In an important case known as the Dayawathie case, the employee who worked in a
textile for 5 years was terminated on disciplinary grounds for taking cut pieces of clothes from
the textile, SC held that the termination was too harsh and ordered reinstatement without back
wages.

In summary, when discussing the legal aspects of disciplinary termination in the private sector
in Sri Lanka, key points to consider include the definition of misconduct, the burden of proof
on employers, the importance of conducting fair inquiries, the requirement to continue paying
wages during suspensions, and the prompt communication of disciplinary reasons to
employees. Understanding these aspects is vital for ensuring a legally compliant and fair
termination process.

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02. Wuhan Lanka Ltd employed Devi as a Junior Executive with effect from 01.04.2022
subject to a probationary period of six months. Devi provided her services to the
satisfaction of her superiors, and became entitled to all salary incentives based on her
performance. She had a dispute with the Human Resource Manager of the Company
relating to her love affair with an outsider. The Management of the Company had
terminated her services at the end of her probationary period. Devi wishes to know
whether she could seek any relief against termination of her services. Advise her
(16 marks)

Probation is a type of employment where an employee is recruited as a permanent

employee, at the starting period the workman will be placed under a probationary period
for probation. This is a trial period for the workman. During the probation, the employer
will assess the abilities, aptitude, characteristics, and interests of the employee

After the end of the probation period, the employer as a sole judge may terminate the
Services if he is not satisfied with the employee's performance or he may extend the
probationary period of the employee if he is not satisfied or he may confirm the
employment of the employee. If he is satisfied with his performance but there's no
automatic confirmation of the services at the end of the probationary period, the employee
will be treated as a probationer until he gets a written letter of confirmation.

There are 02 types of termination of services of a probationer. which includes Malafide

Termination where the termination will be with bad intentions without considering the
work terminating the employee due to Something irrelevant such as political reasons. The
other termination of services is victimization, which, is known as taking revenge on the
worker for some other reason.
In Rupasinghe Case, SC has stated about the job security of the probationer, if a
probationer has Satisfactorily completed the probation, the employer has no choice, but to
recruit him. An employer may terminate a probationer without giving any reason but not
without having a reason, an employer who has given a warning letter during the probation
has an advantage in LT.
In Anderson's case, the court held that the burden of establishing ‘malafide’ or
victimization of termination is on the employee.

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Section 18 of the minimum retirement age of workers act provides that the probationary
period shall not exceed 180 days and the employer can extend the probationary period for
another period not exceeding 180 days if he is not satisfied with the performance.

In Devi's case, Devi has provided her services to the satisfaction of her superiors in Wuhan
Lanka Ltd and became entitled to salary incentives during her probation, but she had been
terminated because of a dispute with the HR manager relating to a love affair.
Devi may have a potential case for seeking relief against the termination of her services if
she can establish that the termination was a result of victimization or malafide intentions
by the company. The burden of proof lies with Devi to demonstrate that the termination
was unjust and not based on valid reasons. It would be advisable for Devi to consult with
legal experts and gather relevant evidence to support her case in order to seek the
appropriate relief.

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03. Mysore Lanka Ltd operates a wholesale business of food items imported from India.
The Company employs thirteen workmen since the commencement of its business in
2018. The Company employs Mervin as a casual workman to load and unload lorries
and perform other related works since the commencement of its business. Mervin
attends for work six days in a week. His wages are Rs. 1250/= for a day, and the wages
are paid once in two weeks. Mervin wishes to know whether the type of his
employment is casual or permanent. Advise him
(16 Marks)

In the case of Mervin, who works for Mysore Lanka Ltd, the question arises as to whether his
employment can be categorized as casual or permanent. Various factors need to be considered,
and by examining them we can determine the nature of his employment.

Casual Employment is one of the types of employment. Here a worker will be employed in
casual nature of employment. When it comes to casual employment court will consider the
following factors to decide whether the worker is a permanent employee or a casual employee.
The deciding factors are,
i. Nature of Employment
ii. period of Employment
iii. Regular Employment or Irregular Employment
iv. Mode of Payment

So, it’s important to go through the facts and decide according to each case. According to
Section 18 of The Minimum Retirement Age of Workers Act, a person cannot be employed
as a casual employee for more than 180 days in a year.

In Hill V. Begg's case, the worker was a window cleaner who worked one and a half months
during 2 years of work and the court held that she was a casual employee. In the All Ceylon
Commercial & Industrial Workers Union case, the workers were working regularly for a long
period and they were paid once in 2 weeks and their names were on the company payroll. The
company treated them as casual workers but the court held that they were permanent employees
of that company.

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In Ceylon Ceramic Corporation Case, the corporation provided training to the employee,
increased the wages, and thereafter made him in charge of the sales center and treated him as
a casual worker. The Court decided that he is a permanent worker considering the training
given, increased wages and making him in charge of the Sale center.

So here in Mervin's case, Mysore Lanka Ltd has employed Mervin to load & unload lorries
and perform other related works Since the Commencement of its business. Marvin attends work
Six days in work. His wages were Rs 135/- per day and it was paid once in two weeks. The
company treats him as a casual employee. Considering the nature of employment, period,
regularity of the employment and the mode of payment, Mervin is a permanent employee of
the company. Mervin works 06 days a week regularly. So according to Section 18 of the
minimum retirement age act, a casual worker cannot be employed for more than 180 days in a
year. But Mervin is working more than 180 days in a year. So, Mervin is a permanent employee
and not a casual employee.

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04. Diab Medicks Ltd has monopoly in distribution of insulin used by the diabetic patients
in Si Lanka. The sole trade union in the Company has given notice to commence a
Strike action demanding a traveling allowance. The discussions between the
Management and the Trade Union to resolve the dispute have failed. The Human
Resource Manager of the Company wishes to know the interventions that could be
made under the Industrial Disputes Act to settle the dispute. Advise him.
(16 marks)

The Diab Medicks Ltd, the sole distributor of insulin in Si Lanka, is facing a strike action
initiated by its trade union due to unresolved demands for a traveling allowance. In order
to settle the dispute the company can seek interventions under the Industrial Disputes Act
(IDA). The IDA provides a framework for resolving industrial disputes through various
methods, ranging from voluntary negotiations to compulsory arbitration.

According to IDA Section 3(1) (a), the Commissioner can settle an Industrial dispute by
agreement. IDA says that, if there's an agreement between the parties, the commissioner
may settle it according to the agreement.

Commissioner may solve/settle the dispute by conciliation. According to section 11(1) of

IDA, Commissioner may induce the parties to find an amicable settlement to the dispute.
section 19 (1) Says that if there is a settlement it should be made in written form and signed
by the parties. It is called a memorandum of settlement. So according to section 11, the
settlement will bind the parties and the terms of the settlement will become implied terms
of the contract of employment. Conciliation is considered as the best method for settling
industrial disputes. In the Next Manufacturing [Pvt] Ltd case, Supreme Court held that the
party of conciliation of a dispute can make an application to LT.

Commissioner may settle the Industrial dispute by voluntary arbitration. Arbitration is

where a third party called an arbitrator, will conduct an inquiry and make a decision that
binds the parties. Voluntary arbitration is stated in section 3 (1) (d) of the act where the
parties to the dispute agree to go for or settle the dispute by arbitration. Here the arbitrator
is nominated jointly by the parties/ representatives/ commissioner or the LT.

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The other important method to settle disputes under IDA is by the Minister. The Minister
can settle disputes by compulsory arbitration. Section 4 (1) of IDA provides for compulsory
arbitration where the minister refers to an industrial dispute by writing an order to settle the
dispute by arbitration with his powers. Here even though the parties do not agree for
arbitration, the minister can refer for it. The arbitrator will be appointed by the LT or the
Minister.

A Trade union cannot go on strikes after the dispute has been referred to arbitration and
doing so is a criminal offense under IDA. In Upali Newspaper Ltd Case, both the Supreme
Court and Court of Appeal decided that, if a workman has made an application to the LT,
thereafter the minister cannot refer the dispute to arbitration and if the minister has referred
a dispute to arbitration, then one cannot make an application to the LT regarding the same
dispute. According to section 19 of IDA, the terms of the award will become implied terms
of the contract of employment.

The Minister can also settle an industrial dispute by referring to an industrial court.
According to section 4(9), the Minister may refer it to an industrial court which is
established/created by the minister. Once the court makes the decision the court will not
exist thereafter. It means it functions on an ad hoc basis.

The Industrial Disputes Act provides a comprehensive framework for resolving industrial
disputes such as the one between Diab Medicks Ltd and its trade union. From voluntary
negotiations to compulsory arbitration, the Act offers a range of interventions aimed at
facilitating fair and equitable resolutions. By exploring these interventions and engaging in
constructive dialogue with the trade union, the Human Resource Manager can work
towards finding a solution that meets the needs of both parties and ensures the uninterrupted
supply of insulin to diabetic patients in Si Lanka. It is crucial to approach the dispute
resolution process with a spirit of cooperation and willingness to compromise, keeping in
mind the welfare of the employees and the greater public interest.

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05. Colombo Weekly Ltd is a newspaper Company in Colombo. The Company engages
Pradeep as a news reporter since the commencement of its business in 2015. Pradeep
uses an office room and equipment provided by the Company. All employees of the
Company sign the attendance register maintained in the office of the Human Resource
Manager. However, the Company does not expect Pradeep to sign the attendance
register. The Company pays some allowances to the employees, but the allowances are
not paid to Pradeep. The Company pays Rs 35,000/= monthly as a retention payment
to Pradeep, and pays a commission based on the news reports he submits during the
month. The agreement between the Company and Pradeep has a clause which states:
"Your agreement with the Company will not construe employer employee
relationship. However, you cannot engage in any other work at any other place during
the existence of your contract with the Company”

Pradeep wishes to know whether he is an employee of the Company or an independent

contractor. Advise him.
(16 marks)

Here in Pradeep's case, the issue is whether Pradeep is an independent contractor or a

workman of Colombo Weekly Ltd Company depending on the facts and circumstances of
how the company treats him.
Firstly, a workman is a person who will have a contract of service that creates an employer-
employee relationship. An Independent contractor will have a contract for service and deals
with the law of contract, district court, damages, etc. The Courts have developed 04 main
tests to identify whether the person who provides services is an independent contractor or
a workman. They are the control test, integration test, Economic reality test, and Multiple
tests.

Control Test - the courts will look into the control of the person. If the person is under the
control of another, then he will be a workman. If not, he is an independent contractor.
If we apply this test to Pradeep, the company has stated in a clause that he can't engage in
any other work at any other place during the existence of the contract with the company.

Integration test – The court will look into whether the person is integrated into the business
or not. If he's integrated into the business, he is a workman and if not, he is an independent

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contractor. Under the contract of employment, the person will be a part of the business but
the contribution of an independent contractor will be an accessory.
If we apply this test to Pradeep, he is an integral part of the company and he cannot engage
in any other work during the existence of the contract.

Economic reality test- In this test, the court will look at whether there is a profit or loss
situation. If there is a profit or loss situation, the person will be an independent contractor.
If there is no economic reality, he is a workman. Usually, a workman's salary will be fixed.
If we apply this test to Pradeep, the company is paying a monthly retention payment of
RS.35.00 and also paying a commission based on the news reports he submit during the
month. So here Pradeep does not have a profit or loss situation.

Multiple Test - There are multiple factors that the court will look into to decide whether
the person is an independent contractor or a workman. For example, ownership of tools,
providing hostels &, etc.
If we apply this test to Pradeep, he uses an office room and equipment provided by the
company, he does not sign the company attendance register.

If we look into some case laws, In Perera V Marikar Bawa's case, the person was
employed as a head cutter in a tailoring company. The company provided room and
expected to work during normal working hours. He didn't sign the company attendance
register. The Court applied all the tests and held that since he is the head cutter of the
company he is an integral part of the business and he is a workman. In the Readymix
Concrete Ltd V Minister of Pensions & National Insurance case, the person was engaged
to carry concrete to customers in his vehicle. But he painted the lorry in the company's
colour and maintained the vehicle at his own expense. He can delegate his work to another
person too. So, the Court applied all the tests and decided that since he can delegate the
work to another person, he is an independent contractor.

So, according to the tests applied and the facts, and the circumstances identified, Pradeep
is a workman of Colombo Weekly Ltd Newspaper Company and not an independent
contractor.

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06. Junior Lawyers Association intends to publish a Law Journal, and requests you to
write an Article entitled "A Reflection on the Payment of Gratuity Act of Sri Lanka".
Explain the key points that you would include in the Article.
(16 marks)
In Sri Lanka, the Payment of Gratuity Act governs the payment of gratuity for workmen.
According to Section 5(1) of the Act, there are two main conditions to determine eligibility
under this Act:
 There must be 15 or more workmen employed to be covered by this Act.
 The workmen's service must be terminated after completing five years.

If these conditions are met, the gratuity should be paid within 30 days as per the Act. In
case of delayed payment, Section 5(4) states that a surcharge (fine) should be paid. The
surcharge is either 5% or 30% depending on the length of the delay. If the delay exceeds
12 months, the surcharge is 30% of the total amount.
However, domestic workers and individuals entitled to a pension are exempt from the
limitations of this Act. The calculation of gratuity is outlined in Section 6(2), where the
gratuity amount is determined by multiplying half of the last month's salary by the number
of years of service.

For example, if the last month's salary is Rs. 80,000/- and the worker has worked for 30
years, the gratuity calculation would be:
Half of the last month's salary = Rs. 80,000/2 = Rs. 40,000/-
Years of service = 30
Gratuity = Rs. 40,000 x 30 = Rs. 1,200,000/-

When calculating the salary, Section 20 of the Act specifies that the basic salary, cost of
living allowance, and budgetary relief allowance (if applicable) should be considered.
Under Section 7(c) of the Act, if the government takes over a business, the workers' period
of service exceeding five years will be added to the new company, and the total period will
be considered for gratuity calculation. Similarly, if a private sector employer sells,
transfers, or alienates their business to another employer within five years, Section 14 states
that the period of service under the previous employer will be added to the new employer's
period.

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If the gratuity is not paid as per Section 8(1) of the Act, the workers must file a complaint
with the commissioner, who will then file a certificate in the Magistrate Court. The
magistrate will recover the gratuity and fines. However, according to the Industrial
Dispute Act (Special Provision Act 19 of 2022), the magistrate will refer recovery matters
to the labor tribunal.

In certain circumstances, the employer can forfeit the gratuity amount under Section 13 of
the Act. This includes cases of fraud, misappropriation of funds, willful damage to the
employer's property resulting in loss, termination of service, or deduction for damages
incurred due to misconduct.

There have been notable cases related to the application of the Gratuity Act. In the Brown
and Company case, a worker had worked for the company for 24 years and received
gratuity at the time of retirement. However, he was subsequently employed under a fixed-
term contract for 19 years. The company argued that his gratuity should be calculated
separately, deducting the amount paid during retirement. The Supreme Court ruled that
since the gratuity was accepted at the time of retirement, the worker was considered
employed under a new contract.

In the Baur & Co Ltd case, it was decided that gratuity could only be deducted if the
employer terminated the worker, not if the worker was rehired according to Section 10 of
the Gratuity Act. In the Saifuddin v. Lowson Pest Control Ltd case, the court determined
that reimbursement of expenditure incurred during the course of one's duty should be added
when calculating gratuity.

In conclusion, the Payment of Gratuity Act in Sri Lanka provides essential guidelines for
the payment of gratuity to eligible workmen. It ensures that workmen who have served for
a minimum of five years and are employed in establishments with 15 or more workers
receive their gratuity in a timely manner. The Act also addresses specific scenarios, such
as government takeovers and private sector transfers, and provides a mechanism for
workers to seek redress in case of non-payment. Overall, the Act plays a crucial role in
safeguarding the rights and financial well-being of workmen in Sri Lanka.

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07. Explain, in the light of the provisions of the workmen's Compensation Ordinance,
liability and non-liability of an employer to pay compensation for industrial accidents.
(16 Marks)
The Workmen's Compensation Ordinance is designed to ensure that workers are
compensated for industrial accidents and occupational diseases. This explores the liability
and non-liability of employers to pay compensation for such accidents and it also covers
various provisions of the ordinance the circumstances under which employers are liable for
compensation, and situations where they are not.

The objective of the Workmen's Compensation Ordinance is to provide compensation to

workers for industrial accidents and occupational diseases. The ordinance includes casual
workers as workmen according to Section 2(1).
Section 3 of the ordinance discusses the liability of the employer to pay compensation for
accidents based on the following reasons:
 Accidents occurring during the course of employment
 Accidents happening during normal working hours
 Accidents that occur while the workmen are performing tasks for the benefit of the
employer

Additionally, the Workmen's Compensation (Amendment) Act No. 10 of 2022 stipulates

that, employers are responsible for accidents that occur during the worker's commute from
the workplace to their residence.

Section 3 also states situations where the employer is not liable to pay compensation, such
as when the accident incapacitates the worker for a period not exceeding three days or in
the case of minor accidents. However, if any of these situations result in the death of the
worker, the employer is still liable to provide compensation.

Furthermore, the employer is not liable to pay compensation if the accident occurs due to
the worker's influence of drink or drugs, willful disobedience to an order, or willful removal
or disregard of safety guards.

Section 5 of the ordinance explains that if a disease is contracted by a worker due to an

accident at work, the employer is responsible for providing compensation.

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According to Section 16(1), the compensation must be claimed within two years from the
date of the accident or death.

In accordance with Section 23A, if the employer fails to pay the compensation within 30
days, they may be required to pay a surcharge.

Section 22 of the ordinance discusses the principle of liability, stating that if an owner
engages a contractor for work execution and compensation needs to be paid, the owner is
responsible for providing the compensation.

Sections 49(1) and 53A (1) of the ordinance state that if the commissioner's decision is
unsatisfactory, an appeal can be made to the provincial High Court within 30 days. If the
decision of the provincial High Court is also unsatisfactory, an appeal can be made to the
Supreme Court.

Under Section 60, a worker can only claim compensation either through the civil court or
under this ordinance.

Additionally, in the Rafina case, it was ruled that the owner is vicariously liable for their
worker's mistakes and must provide compensation. Therefore, it is evident that employers
are obligated to provide compensation for accidents, deaths, and diseases that occur due to
work-related circumstances.

In the Parupathy v. Additional Controller case, the worker received compensation after
being electrocuted while at work

The Workmen's Compensation Ordinance establishes the employer's responsibility to

provide compensation for industrial accidents and occupational diseases. It outlines
liability criteria and exceptions, emphasizes timely claims, and offers avenues for legal
recourse. By complying with these provisions, employers can fulfill their duty to
compensate workers for work-related injuries, fostering a safer and more secure work
environment.

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08. Japan Lanka Motors Ltd commenced its business in 2015. The Company employs
twenty wor kmen from the commencement of its business. The business of the
Company has been affected by the restrictions to import vehicles. The Company
intends to terminate the employment of five workmen who are redundant at the
workplace. The Company seeks youard vice as to the procedure that the Company
should follow for the termination, and the remedy available to the workmen if the
Company does not follow the procedure. Advise the Company.

(16 Marks)

Japan Lanka Motors Ltd commenced its business in 2015 and has been facing challenges
due to restrictions on importing vehicles. In light of this, the company intends to terminate
the employment of five redundant workers. To ensure a proper procedure is followed for
the termination and to understand the available remedies for the affected workmen, the
company seeks advice.

Termination of employment can occur through disciplinary or non-disciplinary means.

However, if the company has more than 15 employees, the Termination of Employment
of Workmen (Special Provisions) Act applies. This act was enacted to provide job
security to workers against non-disciplinary termination, as the existing Industrial Disputes
Act did not effectively address this concern.

Under the Termination Act, there are two types of non-disciplinary termination:
retrenchment, which involves excluding people from the workplace, and closure, which
refers to the closing of the business. It is important to note that the Termination Act, also
known as the TEWA, has been amended as the Termination of Employment of
Workmen (Special Provisions) Act (TEWA) Act No 29 of 2021. The original act,
Termination of Employment of Workmen (Special Provisions) Act No 45 of 1971, has
been revised due to changes in government policies. Additionally, the application of TEWA
may be exempted within the Colombo Port Economic Commission area.

The Termination Act applies under the following conditions: it is applicable to the private
sector and when there are 15 or more workers employed. Furthermore, the employees who
are terminated should have worked for a minimum of 180 days.

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To terminate a worker, the following procedure needs to be followed according to Section
2(1) of TEWA:
 Obtain the prior written consent of the workman.
 Obtain prior written approval from the commissioner.

It is important to note that the commissioner may order the payment of compensation after
granting the letter of approval.

If an employer terminates the employment of a workman without following the procedures

outlined in the Termination Act, it is deemed illegal and null and void as per Section 5 of
TEWA. In such cases, the workmen can seek relief by making a complaint to the
commissioner under Section 6. The commissioner has the authority to order the
continuation of work and payment of any outstanding wages.

However, it is worth mentioning that the commissioner does not have the power to award
compensation as it is not within their jurisdiction. Section 6(B)(1) stipulates that workman
must make a complaint within six months of the termination.

In conclusion, Japan Lanka Motors Ltd should ensure it follows the procedure outlined in
the Termination of Employment of Workmen (Special Provisions) Act. Obtaining prior
written consent of the workman and approval from the commissioner is essential. If the
company fails to adhere to the required procedure, the termination may be considered
illegal and the affected workmen have the right to seek relief by making a complaint to the
commissioner. It is important for both the company and the workmen to understand their
rights and obligations under the Termination Act to ensure a fair and lawful process.

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09. Explain the legal aspects relating to any two (02) of the following:

a) Collective agreement
A collective agreement as stated in Section 5(1) of the Industrial Disputes Act (IDA), refers
to an agreement between an employer or employers and one or more workmen or trade
unions comprising of workmen. The agreement encompasses various aspects, such as terms
and conditions of employment, privileges, rights, and duties of the parties involved, as well
as the resolution of industrial disputes.

Section 6 of the IDA states that the collective agreement must be in writing and signed by
all parties involved. Following the signing, it should be submitted to the commissioner for
publication in the gazette, which is an official government publication. Once published in
the gazette, as specified in Section 7, the collective agreement becomes effective either on
the date of publication or on a specific date mentioned within the agreement itself.

According to Section 8 of the IDA, the terms of the collective agreement become implied
terms, meaning they are considered unwritten but binding components of the employment
contract. It is important to note that any party can repudiate a collective agreement by
providing written notice to the commissioner and the other party involved. However, an
employer who is a member of a trade union bound by the agreement cannot independently
repudiate the agreement.

Furthermore, Section 10 grants the Minister of Labour the authority to extend a collective
agreement to cover all workers within a particular industry. Violation of a collective
agreement is considered a criminal offense under Section 40(1) of the IDA.

In summary, a collective agreement is a written agreement between employers and

workmen or trade unions that governs various aspects of employment. It must be signed by
the parties involved, submitted for publication, and becomes legally binding once
published. The terms of the agreement are considered implied terms of the employment
contract. Repudiation of the agreement requires written notice, and the Minister of Labour
can extend the agreement to cover an entire industry. Failure to comply with the collective
agreement is a criminal offense under the IDA.

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b. The Right to Strike

The Right to Strike is a fundamental aspect of labor rights and is recognized internationally
as well as in Sri Lankan law. The International Covenant on Economic, Social, and Cultural
Rights (ICESCR), specifically Article 8.1 (d), is the only international instrument that
explicitly acknowledges the right to strike.
In Sri Lanka, the Trade Union Ordinance is a statute that acknowledges and protects the
right to strike. The ordinance contains several provisions that affirm this right:

Section 2 of the Trade Union Ordinance states that one of the objectives of a trade union is
to organize strikes. This provision explicitly recognizes the trade union's role in facilitating
and coordinating strike actions.
According to Section 18 of the ordinance, only registered trade unions have the right to go
on strike. Unregistered trade unions are not granted this right. This provision ensures that
the right to strike is safeguarded for registered trade unions.

Section 26 of the Trade Union Ordinance provides registered trade unions with immunity
from civil action when they engage in a strike due to a trade union dispute. This section
shields registered trade unions from legal consequences and ensures that civil actions
cannot be filed against them during a strike.
Additionally, Section 27 of the ordinance grants trade unions immunity against tort actions
arising from the consequences of strike actions. This provision recognizes and protects the
right to strike by shielding trade unions from legal liabilities that may result from their
strike activities.

Collectively, these four sections of the Trade Union Ordinance in Sri Lanka establish and
safeguard the right to strike. They outline the conditions, requirements, and protections
associated with the exercise of this right by registered trade unions in the country.

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c. Industrial Court

According to the Industrial Dispute Act, a dispute can be referred to a commissioner,

minister, or labor tribunal. A minister has the authority to settle the dispute through
compulsory arbitration or the Industrial Court. As per Section 24(1), the Industrial Court
is required to conduct an inquiry, hear the evidence, and subsequently make a just and
equitable award.

The president has the power to appoint a panel of at least five individuals, from which the
Industrial Courts are constituted. The minister can choose either one or three members from
the panel to form the court. Whenever a dispute is referred to the Industrial Court by the
minister under Section 4(2) for settlement, a statement prepared by the commissioner
outlining the matters in dispute between the parties must accompany it.

The court has the jurisdiction to consider and decide any other matter that was in dispute
between the parties prior to the date of reference. In the case of Hayleys Ltd v. De Silva, it
was emphasized that the court is obligated to consider every material question involved in
the dispute, as well as any application or other matter referred to it by the minister. Failure
to address and decide a question that the statute requires the court to decide would constitute
an error of law and a disregard of statutory provisions.

The award issued by the Industrial Court must be transmitted and published in the gazette
by the commissioner. Furthermore, every award made by the Industrial Court is binding on
the parties, and the terms of the award are implied in the employment contract. If a party
wishes to modify the award, an application must be made to the minister, who will refer it
for consideration by the Industrial Court.

According to Section 20(1)(a), such an application cannot be made within 12 months unless
it is supported by the commissioner's certificate, indicating a change in economic and labor
conditions requiring reconsideration. The Industrial Court, to which the application is
referred for reconsideration of an award, has the authority to confirm, set aside, make a new
award, or modify the existing award based on its decision.

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