Sri Lanka (LK)
Sri Lanka is South Asia's most beloved island destination — a tropical tear-drop off India's southern tip offering ancient Buddhist temples, colonial hill stations, spice gardens, surf beaches, and world-renowned tea.
Employment Rights
Sick leave, dismissal protection and red flags in Sri Lanka.
Sri Lanka has a comprehensive labour law framework originally modelled on British employment law and significantly developed post-independence. Key legislation: Shops and Office Employees (Regulation of Employment and Remuneration) Act No. 19 of 1954, Employment of Women, Young Persons and Children Act, Termination of Employment of Workmen (Special Provisions) Act, and the Industrial Disputes Act. Expatriate employees have the same core rights as local employees. The Commissioner General of Labour enforces labour standards. Labour Tribunals handle disputes and are relatively accessible and faster than civil courts.
Sick leave
Rules: Employees are entitled to sick leave under the Shops and Office Employees Act. Notify your employer as soon as practicable on the first day of illness. A medical certificate from a registered medical practitioner is required for sick leave claims.
Doctor note: From Day 1 for formal sick leave to qualify for paid leave entitlement. Many employers require a certificate for any absence of 2 or more consecutive days. Always obtain a medical certificate — without it, the absence may be treated as unpaid or absent without leave.
Employer pay: Full salary during sick leave up to the statutory entitlement. After the entitlement is exhausted, sick leave is typically unpaid unless employer policy is more generous.
Long-term: There is no long-term statutory sickness income replacement benefit in Sri Lanka. After exhausting paid sick leave entitlement, employees on extended illness either use annual leave, negotiate unpaid leave with employer, or, if permanently incapacitated, may qualify for an invalidity pension through EPF. Private health insurance (income protection component) is the main protection for long-term illness.
Dismissal protection
Law: Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971 (TEW Act) applies to all employees after the probationary period. Under the TEW Act, an employer cannot terminate a confirmed employee without the written approval of the Commissioner General of Labour (for companies with 15+ employees) or without paying the legally prescribed compensation. Summary dismissal for serious misconduct is permitted but must follow a domestic inquiry.
Deadline to sue: Employees must file an application to the Labour Tribunal within 1 year of the date of termination. The Labour Tribunal has jurisdiction to reinstate or award compensation. The typical award is 2.5 months' salary per year of service. Do not delay — the 1-year deadline is firm.
Probation
Probationary period is commonly 3–6 months, specified in the employment contract. During probation, both sides may terminate with shorter notice (often 1 week–1 month). After confirmation of employment, full Termination of Employment of Workmen (Special Provisions) Act protections apply. The Termination Act requires prior approval from the Commissioner General of Labour for termination of confirmed employees at companies with 15+ workers, except for serious misconduct.
Notice periods
Minimum notice under the Shops and Office Employees Act: 1 month written notice for both employer and employee. Most professional contracts specify 1–3 months. Senior executives: 3–6 months. Payment in lieu of notice is common and legally permissible.
Working time
Max hours: Shops and Office Employees Act: maximum 9 hours per day, 45 hours per week for white-collar workers. Not more than 5 days per week in some sectors. Factory workers: different rules under the Factory Ordinance.
Min rest: Minimum 1 hour lunch break for working days over 5 hours. Minimum 24 consecutive hours rest per week (typically Sunday). Daily rest period: workers must not be required to work more than 6 consecutive hours without a break.
Overtime: Overtime must be paid at minimum 1.5× the basic hourly rate. Overtime is limited to a maximum of 12 hours per week under the Shops and Office Employees Act. Professional/managerial employees may have different overtime terms negotiated in their contracts — review carefully.
Vacation
Minimum 14 days annual leave after 1 year of continuous service (Shops and Office Employees Act). Most professional employers offer 14–21 days. Senior executives may receive 21–30 days. Plus 25 public holidays per year including all 12 Poya Days (monthly full moon) — Sri Lanka has one of the highest public holiday counts globally. Sri Lankan annual leave is pro-rated for partial years. Unused annual leave at the end of the year can be accumulated (carry-forward rules differ by employer) or must be paid out.
Anti-discrimination
Sri Lanka's constitution prohibits discrimination on the basis of race, religion, language, sex, and political opinion. The Employment of Women, Young Persons and Children Act provides protection against child labour. There is no comprehensive anti-discrimination employment law equivalent to the EU's Equal Employment Opportunity framework. Gender discrimination is prohibited but enforcement mechanisms are weaker than in OECD countries. Foreign nationals are subject to the same labour law protections as Sri Lankan nationals.
Contract red flags
- !Employment contracts that do not include a written salary — verbal-only salary agreements are difficult to enforce.
- !Contracts that attempt to waive EPF/ETF contributions — these are mandatory by law and cannot be waived.
- !Notice periods shorter than 1 month — may breach the Shops and Office Employees Act minimum.
- !Absence of provisions for the Termination of Employment of Workmen Act protections — signs of an employer trying to circumvent TEW Act protections.
- !Contracts denominated entirely in USD or foreign currency without clarity on exchange rate adjustment — the LKR has been volatile historically.
- !Confidentiality clauses that extend indefinitely — standard practice limits these to 2–3 years post-employment.
- !Non-compete clauses that restrict all future employment — Sri Lankan courts have limited enforceability of overly broad non-compete agreements.
- !Lack of overtime policy — ensure the contract specifies how extra hours are compensated.
- !Salary below the national minimum wage — LKR 30,000/month (LKR 1,200/day) from 1 January 2026; sector-specific Wages Board rates may be higher and must be observed if applicable.
- !EPF (Employees' Provident Fund) and ETF (Employees' Trust Fund) contributions not being paid — employer must contribute 12% EPF + 3% ETF; employee contributes 8% EPF; verify contributions at epfportal.gov.lk.
- !TEW Act protections not applying due to company claiming fewer than 15 employees — verify actual headcount; arbitrary manipulation of staff count to avoid TEW Act is a legal violation.
- !Work permit (RP/Work Visa) not obtained before starting employment — required for all foreign nationals; process through the Registrar of Companies or BOI depending on employer type.
Employment Rights
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