TERMINATION OF EMPLOYMENT OF WORKMEN – In NUTSHELL

TERMINATION OF EMPLOYMENT OF WORKMEN (ACT NO 45 OF 1971 AS AMENDED BY NO 04 OF 1976, 51 OF 1988 12 of 2003 (SPECIAL PROVISIONS)
This act was passed in the year 1971. It deals with termination of employment in the following circumstances.
  • Where the employee is medically unfit to perform his duties in terms of his contract,
  • In situations of redundancy, closing down businesses
  • When retirement is not covered by the contract of employment or collective agreement.
  • Temporary Lay-offs
The act provides that no employer shall terminate the schedule employment of any workman without:
  1. Prior consent in writing of the workman or,
  2. Prior written approval of the Commissioner of Labour
This Act has no bearing to the following categories
  1. A workman not in a scheduled employment,
  2. An employer by whom less than 15 workmen on an average have been in employment during the preceding six months,
  3. Termination of any workman employed for a period of less than one year,
  4. When the termination is by way of retrenchment in accordance with a collective agreement or contract of any employment which stipulates the age of retirement,
  5. When the government is the employer or an employer whose capital is wholly provided by the government,
  6. When local government authority, co-operative society, public corporation is the employer,
  7. Termination of any workman, who has been employed by any employer in contravention of the provisions of any law for the time has been in force
  8. Employees who have voluntarily resigned from employment
  9. Employees engaged in illegal business.
When considering the nature, scope and effect of the act, the definition and meaning of the terms of this act are:
           i)       Workman
The expression, workman bears the same meaning as in the Industrial Dispute Act, subject to the provisions that it does not include a workman not covered by this act. As mentioned above, this act does not apply to the classes of workmen referred to 1 -7 above. According to decided cases, Superintends of Estates, Executives Directors including Managing Directors are all “workman” within the definition of this act
           ii)      Scheduled Employment
This phrase is defined to mean employment in:
                      a) Any trade in respect of which a Wages Board has been established under the provisions of Wages Board  Ordinance,
                      b) Every shop of office within the meaning of Shop & Officer Employees Act,
                      c) Every factory with the meaning of Factories Ordinance,
          iii) Period of One (01) year
Termination (Amendment Act No 51/1988), interpreted the ” year” in relations to a service of 180 days inclusive of all authorized leave in a continues period of 12 months and prescribed the period during which the workman could make his complaint.
          iv) Termination
For the purpose this act, the scheduled employment of any workman shall be deemed to be terminated by his employer for any reason whatsoever, other than for disciplinary reasons. In other words, if the termination is a punishment imposed by way of disciplinary action, it is not termination within the meaning of the act. In such an event, the employer should inform the workman in writing the reasons for termination before the expiry of the second working day after the date of termination.
           v) Closure
The term “Closure” is not defined in the act. It is only the non- employment of a workman consequent upon a closure that is covered by the act. “Closure”, as distinct from retrenchment and it is pre supposes that the employer will not be continuing the business which is been closed.
The Commissioner of Labour under the Termination Act and his duties / obligations
a)        The Commissioner is in charge of the general administration of the act. An employer cannot terminate the services of a workman in scheduled employment without the prior consent in writing of the workman or prior written approval of the commissioner of Labour on other than disciplinary grounds.
When such an application is made, the commissioner will hold an in inquiry after due notices to the parties and may in his ABSOLUTE discretion decide the terms and conditions subject to which his approval should be granted, including any particular terms and condition relating to payment by the employer to the workman for gratuity or compensation for the termination of such employment.
b)           The Commissioner must make the order within the three months of the application. The three (03) months rule is, however not mandatory and any delay in giving the order beyond three months does not vitiate his order or deprive him of his jurisdiction.
c)            The Commissioners decision cannot be questioned in any court of Tribunal. Failure on the part of any person to comply with the decision of the Commissioner is punishable with a fine or imprisonment for a term not exceeding six months or both such fine and imprisonment.
d)            If an employee is terminated by the employer in contravention to the provisions of this act, the employee can make a written petition to the Commissioner on this issue before the expiry of 03 months and the Commissioner shall not entertain any application made after 03 months.
e)             The Commissioners decision shall be final and cannot be questioned in any Court of Law or Tribunal. However, the aggrieved parties can seek prerogative Write remedies against the Commissioner.
Binara A Gunasekera
(Attorney-at-Law)

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