Sri Lanka tightens labour laws

Sept 07, 2007 (LBO) – Sri Lanka is doubling the time given under its labour laws for aggrieved employees to seek redress, rolling a back a previous decision to limit the period, a senior minister said. Minister Anura Yapa said the cabinet of ministers had approved a request by labour minister Athauda Seneviratne to increase the time given to seek relief under the Termination of Employment Act from three months to six months.

"The previous United National Party government reduced this to three months," Yapa said.

"We are reverting to the previous time limit."

The time given for aggrieved employees to take action under the Industrial Disputes Act would also be doubled from three months to six months, he said.

Populist Politics

Under Sri Lanka's labour laws it is difficult to sack workers or even lay them off when a business falls into trouble.

However the laws only protect a minority of unionized workers in the formal sector which is tightly regulated.

Economists have warned that tight labour regulations was scaring away good investors and hindering high quality job creation.

Large numbers of Sri Lankans, especially in rural areas work in the informal s