Introduction employee to work under the employer in a


Employment is one of
the basic methods through which many individuals within a country supports
themselves financially. A contract of employment is an important factor which
strengthens the servant master relationship in a legal sense.  It has been mentioned that “The legal basis of
employment relationship is usually the exchange of a promise of work in return
for a promise of wages”1
In certain circumstances the employers of individuals terminate them of employment
baselessly which is distinctly unjustifiable in nature. In face of such
impediments there are remedial procedures available. Amongst Arbitration or
approaching the Industrial courts, the Labour Tribunals are of presence. Labour
tribunals were created specifically for the purpose of prompt settlement of
disputes predominantly on dismissals.

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The Industrial Disputes
Act (No. 27 of 1966) mentions in section 27, of the duties and powers of a
Labour tribunal, in settling a dispute by adjudication. It is widely known that
persons can apply for the Labour tribunals and be gained of a chance for
obtaining either compensation or reinstatement, only if he/she could be
confirmed as a person who is employed under an “employer”, as of the definition
given in the interpretation section of Industrial Disputes Act (No. 27 of
1966). Thus, it should firstly be clarified of the two essential types through
which a contract of employment could be made. This distinction determines the
situation as to whether a person could be 
regarded as an employee working under an employer, or whether he/she
could be distinguished as an Independent contractor.





Contract of
services and Contract for services

The position of the
contract shall be thoroughly assessed by any judicature system, including the
Labour tribunals. The types of contract of employment are categorized to either
a contract OF services or a contract FOR services. The contracts for services are
concerned with the contractor-client contracts. This type of contract does not
contain any form of employment relationship. It could be regarded as a strictly
business to business relationship. On the other hand, Contract of services is
in a situation where there is an employer-employee contract. What it includes
would be for the employee to work under the employer in a way he/she heads the
instructions laid out by the employer. In cases of termination, there are
methods to gain EPF and ETF, depending on the factors of the individual
scenario presented.2 In
the case of De Silva v The Associated
Newspapers of Ceylon Ltd 3the
labour tribunals decided that the individual terminated was not an employee,
but the CA stated that there is a need to go beyond the contract and apply
tests of other jurisdictions.

There are three tests
categorized. Firstly, the control test, it refers to the bargaining power of
the parties in the contract. The more control or bargaining power, the more
likely the persons are employers(as in Mersey Docks and Harbour Board v.
Coggins and Griffiths (Liverpool) Ltd4).
Secondly, the integration test, it refers to whether the work is done as an integral
part of the business. Thirdly, the dominant impression test, which looks into
all factors in relation to the situation presented (as in Market
Investigations v. Minister of Social Security5).Along
with these tests a LT would refer to Statutes as well. The image that follows
provides the remedies for disputes concerning the infringement of the IDA. It
formulates that the powers of the LT are similar that of the other two remedies
available. More on its powers shall be discussed further to below.


What is a
termination of services and how does it occur unjustifiably.

In Sri Lanka, the
Termination of Employment of Workmen (Special Provisions) Act bearing No 45 of
1971 is used. It gives the necessary definition as to what could be regarded as
a ‘termination’. Further, this Act provides for the types of terminations that
an employee could go through. The nature of the termination affects the way
through which the labour tribunals assess the situation of termination thus
this Act is referred to determine whether a termination has occurred
justifiably or not.

Section 2(4) pronounces
the methods through which termination could occur. It distills termination into
few forms. Namely: the termination by an employer, non-employment by the
employer along with non-employment upon closure and Non-disciplinary

termination would refer to a workman being fired due to incompetency for the
occupation or for the loss of confidence of the employee. Sri Lanka Samanya
Kamkaru Samithiya v Wilfred & Co. Ltd was a case in which a workman got
injured during employment which was, however, not due to a cause of negligence.
Anyhow, the employer terminated her contract of services stating she was of an
inability to perform her work. As it was not based on grounds that could be
claimed justifiable the decision of termination taken was not bound to be

Termination by an
employer has no possibility to be done simply, as a large proportion of power
is not provided to do so by the Act. The employer’s right to termination is
concentrated since the written consent of the workman, or the written approval
of the Commissioner of Labour should be initially acquired8.
As mentioned beneath, in chapter 154 of the Act it states in Section 2.(2)(1) No
employer shall terminate the scheduled 
employment   of   any  
workman without—     

The prior consent in writing of the workman; or

The   prior written approval of
the Commissioner

As for non-employment
of the employees, it could happen in situations where the employer releases the
workman of his/her services in a method, such as through mutual agreement (e.g.
in fixed term contracts) and later refuses to provide the position to the
employee when he/she requests for it.

In situations where a
business is being closed, termination could occur. For  instance in the case of Satchithananadan v
Ghanam, the Factory to which the employees were employed was destroyed,
thus the courts held the termination done was not on the basis of dismissal but
due to the frustration of the contract of services.

Along with the existence
of different forms of termination, there are various types of contracts of
services in the private sector. Employees in these forms of contracts are
capable of approaching the Labour tribunals. Firstly, it could be referred to
the fixed term contracts. These include a job opportunity for an individual to
work for a term provided by the contract, after which, the contract ends. If a
workman applies for a Labour tribunal for not obtaining a renewal after the
contract ends, it is not a possibility for LTs any aid, since the termination
has occurred with the mutual consent of the employee9.
De Silva v. The Associated Newspapers of Ceylon Ltd10
is a case which made reference to this principle.

Apprenticeships are
those individuals that work under a person in the hope of acquiring the
necessary skills that are required to work in a certain field as selected by
the individual. Their rights are protected by both the Industrial Disputes and
the Termination of Employment of Workmen Act. Therefore there is could be
possibility for them to approach labour Tribunals, in the United Kingdom there
are Employment tribunals which allow for individuals under apprenticeships to

Anyhow it is known that
individuals under casual contracts of services cannot apply for labour
tribunals. As through the words of S.R. De Silva, ‘A casual employee is one
employed by chance on no contract to employ…’ These are considered to not have
a specified contract. And the workman is not obliged to report to work. However
a confusion that could arise on this would be with a temporary contract. These
are mostly confused with casual employment. “…the only reliable guideline is to
say that the longer the period of employment the more likely that the employee
is temporary, rather than causal” this was stated by S.R. De Silva. Depending
on the duration of the temporary contract, those individuals can seek for a
possibility to approach labour tribunals.

 Monthly contracts are those which could be
referred to as more permanent as the wages are provided for the workman each
month and automatic renewal of the contract could be expected by the workman.
If a termination has occurred the employee can approach the labour tribunals as
governed by the Industrial Disputes Act No.43 of 1950.


By encapsulating the
essentials of what has been mentioned above, it is an unlawful termination if,
in circumstances, the prior consent of the workman is not obtained, or in
situations where a written approval of the Commissioner of Labour is not gained.
Thus it could be clarified that the requirement of writen consent by the
workman is an essential policy.  However
in situations where there is no such written consent, the Commissioner shall
either grant or refuse permission to terminate employment depending on the
circumstances of the case. As for termination by the employer due to
misconduct, most countries shall firstly, calculate the grounds of misconduct
and make aware the employee of it.

This is referred to as
Progressive Discipline.11
It is a procedure for handling job-related behavior that does not meet expected
and communicated performance standards. This could simply be referred to as the
feedback that an employee would gain as to what factor has caused the
termination. For further clarification, it could be regarded as a reason in
written form as to why the termination has occurred. This is prominently done
in situations of probationers, and as for all other forms of contracts, it is a
necessity to provide a reason for the termination in a written stance. In
addition, there should be a specific period at which the notice should be given
to the employee of his termination.Though legislative documents do not force a
reason for termination to be given as feedback, in terms of social justice it
is of a necessity. Nonfulfillment of such requirements could at times result
with the termination in being unfair. While a reason for termination should be
provided by the employer, in a similar stance the Labour Commissioner is to
provide reasons for a decision taken as well. In the case of Celltel Lanka
Ltd. V The Commissioner of Labour and Oaths, the CA held that though there
is no statutory obligation on the part of the Commissioner to give reasons, in
view of a fair trial, it is important to do so. The situation with regard to
labour tribunals shall be, in detail, discussed as below.


Labour Tribunals
and the power it possesses.

With the Industrial
Disputes Act coming into effect after amendments in 1957, the labour tribunals
were formed for workman to gain remedies for the termination of services. In
between the years of 1950-1975 those workers who had issues with termination of
the contracts of services were to await the decision of the Minister of Labour
to permit them to proceed with their relevant issues, to either the industrial
courts or the Arbitrator. However as the Labour Tribunals were brought about,
it was easier for employees to take action in situations of termination of
contracts of services. It could be of clarity, that the Labour tribunals are
bestowed with the discretion to exclusively look into the matters with regard
to termination of services.

The tribunals further
use the Termination of Employment of Workmen (Special Provisions) Act bearing
No 45 of 1971. In it, it states what an employee should have inorder to
complain and approach the tribunals to gain relief. In section 3 (1) (a) of the
Act it mentions, that approximately fifteen workmen should have been in
employment within 06 months prior to the termination of employment.  Further in subsection (b) it provides that
the workman should have reported to work for at least one year. In addition,
the Act mentions that the workman should be engaged in a scheduled employment. It
should further be noted that, as of the Industrial Disputes (Amendment) Act No.
11 of 2003, every application to a labour tribunal must be made within three
months of the date of termination.12
Once these requirements are fulfilled, along with the requirement of conforming
that the workman is a person working under an “employer”(as required
by the Industrial Disputes Act) there is a greater possibility of gaining a
positive outcome through approaching the labour tribunals. It should be
extended, that domestic workers cannot be granted of reinstatement by labour
tribunals. This constriction is laid out in the section 33 of the Industrial
Disputes Act.  As

The Labour tribunal is
headed by a singular person, referred to as the “President”. As of Article 170
of the constitution the person shall be referred to as a “Judicial Officer”.
The judicial service commission is in charge of the appointment, dismissal and
the disciplinary control of these officers.

As for the decisions that
the President makes, they are referred to as a “settlement”. It is not referred
to as an order. It should be furthered that in situation of a minor dispute the
Minister of the Industrial courts could refer it to either the labour tribunal
or for arbitration. This wording is stated in several places in the section 4(1)
of the Industrial Disputes Act Chapter 131.

In section 4A it states
“the Minister…by order in writing…refer any industrial dispute for the
settlement by adjudication to the appropriate labour tribunal.”  However as through the Section 31A-31D it provides a
guideline which is at a certain amount in contrary to the idea of a LT being
capable of making a order. Part IVA
is segregated specifically for the Labour Tribunals states the procedures as

The powers of the
Labour Tribunals are laid out in Section 31B (1) subsection (2). It states,
that all the necessary facts of the case brought, should be taken into
consideration. To elaborate on this section, in part (a) of it states that if
there is any discussion pertaining to the matter, that has been applied to the
tribunals, between the employee and the employer of the workman, then the
labour tribunals are to “make order 
suspending its proceeding upon that application until the conclusion of
that discussion”. Further, “..if a settlement is reached in the course of that
discussion, shall make order according to the terms of such settlement..”  With evaluation it would be a manifest that
the powers of making the decisions with regard to the matter, brought by either
the workman or the Trade Union consisting and representing of that workman,
would depend on the discussions that would take place between the employer and
the workman. The decision should be taken as of the terms of the settlement as
well. Thus there is no sole power to take a decision with just an overview of
the case. Further it is constricted to use whatever the timing that the
tribunal would prefer, for making the decision, since it should be awaited
“until the conclusion” of the certain discussion.

In 31B (3) subsection
(4) it goes on to state that the labour tribunals are to grant “any relief or
redress…to a workman upon an application…notwithstanding anything to the
contrary in any contract of service between him and his employer” this section
demands a justifiable decision which is in relevance to, and depending on, the
conditions and obligations stated in the contract of services.

Further, in relation to
the powers of the labour tribunal 31D mentions that the conclusive decision
with reflection to the matter upon an application, will be regarded as “…final
and not be called in question in any court.” In addition, subsection (2)
mentions that if any “workman, trade union or employer” is displeased by the
decision granted by the labour tribunal, the stipulated person shall appeal to
the supreme court by the way of a written petition which notifies the opposite
party in relation to the dispute.13

This section suggests
two aspects of its powers. One would be the questionability of its powers.
Though it states that no court shall question the order of the labour tribunal,
the option of the capability of appealing to the Supreme Court refers to a
method through which, it would place the decisions taken by the LTs in
question. The Supreme Court is the apex court of Sri Lanka, as of Article 126
it is prominently mentioned that this Court can ‘hear and determine any question
relating to the infringement, by executive or administrative action’ with
regard to fundamental rights as recognized in Chapters III and IV. The fact that
the Supreme Court prevails over a LT is proved evident by CHAPTER IX of the
Constitution of the Democratic Socialist Republic of Sri Lanka. In section 5 of
this chapter it states that “Subject to the jurisdiction conferred on the
Supreme Court under paragraph (1) of Article 126 no court or tribunal shall
have power of jurisdiction to inquire into… any order or decision of the
Cabinet of Ministers, the public service commission or a public office, in
regard to any matter concerning the appointment, transfer, dismissal, or
disciplinary control of a public officer.”14

Anyhow, the other
aspect that could be considered is that the court which can be appealed to is
the Supreme Court which is the highest court of order, and the appealing option
is not available to be done to any other lower courts. This surely suggests
that the decision of the labour tribunals with regard to terminations of
contracts of services are of a prominent status and would be considered to a
certain degree as broad in nature tough there are several constrictions.



















In conclusion, it
could   be stated that with consideration
to the tests developed by the courts to determine the nature and type of
contract of employment, the distinction as to whether the termination is
unjustifiable or not could be determined by any LT. The relief to be provided
for those affected negatively would depend on the presence of an influence of
unfairness in dismissal. With reference to the sections above, all
circumstances of a case must be considered. Not only the facts but also the
opinions of the parties matter. With all such deliberations, relief of either
reinstatement or compensation could be however be granted.

It is plausible to
believe that Labour tribunals are capable of granting relief to workmen in face
of visible oppression through several means. As above, there are several
constrictions available to the powers of the tribunals. It could be summarized,
that the Industrial Disputes Act provides expressly, that the opinions brought
by the employer and the workman of the case should be precisely referred to. Industrial
Disputes Act from its sections (31B-31D), elaborates on the factor. Further the
option to apply to the Supreme Court for those unsatisfied by decisions of the
tribunal is of availability.  In addition
the industrial disputes court could refer ‘minor matters’ to the labour
tribunals, this puts in question the strength of the labour tribunals as a
whole. The conception of the society of the labour tribunals would then again
matter. The tribunals are with the entitlement to reinstate workers or to award
compensation. However, there is a presence of a mandate for the tribunals to
act equitably. It should most prominently be brought into light that tribunals
are with a capability to choose to disregard a written contract in situations
where equity demands for a relief. Thus it could be concluded that they have
fairly wide powers when it comes to their impact on the termination of services.






Employment Law (2nd edn, BA Hepple & Paul O’Higgins)
Disputes Act 1966 s 27
Explained: ‘Contract Of Service’ And ‘Contract For Services” (Contractor,

accessed 14 November 2017
Docks and Harbour Board v Coggins and Griffiths (Liverpool) Ltd 1946 HL (HL).
Investigations v. Minister of Social Security 1969 2 (QB), p.173.
Silva v The Associated Newspapers of Ceylon Ltd 1979 (CA), p.173.
 Employment Related Statutes Including
Dispute Resolution And Collective Agreements (The Institute of Charted Accountants of Sri
Lanka 2017)

accessed 16 November 2017
of Employment of Workmen (Special Provisions) Act bearing No 45 1971
Of Employment (Employers’
Federation of Ceylon, 2012 2012).
Is Progressive Discipline In The Workplace?’ (The Balance, 2017)

accessed 11 November 2017

Law of Dismissal. (2004). 2nd ed. Rajagiriya: Tne Employer’ Federation of
ceylon, pp.28-35.
Disputes Act 1970 31B-31D.
Constitution Of The Democratic Socialist Republic of Sri Lanka.










1Employment Law (2nd edn, BA Hepple & Paul O’Higgins).



‘IR35 Explained: ‘Contract Of Service’ And ‘Contract For
Services” (Contractor, 2017)
accessed 14 November 2017.

De Silva v The Associated Newspapers of Ceylon Ltd
1979 CA (CA).

Mersey Docks and Harbour Board v Coggins and
Griffiths (Liverpool) Ltd 1946 HL.

Market Investigations v Minister of Social Security
1969 QB, 2 (QB).

‘IR35 Explained: ‘Contract Of Service’ And ‘Contract For
Services” (Contractor, 2017)

accessed 14 November 2017.

7Termination of Employment of Workmen (Special Provisions) Act
1971 s 2(4)

8Termination of Employment of Workmen (Special Provisions) Act
1971 s 2.2(1)  

Contract Of Employment (Employers’ Federation of
Ceylon, 2012 2012).

( n 3) 1979

‘What Is Progressive Discipline In The Workplace?’ (The
Balance, 2017)
11 November 2017.

S.R. De Silva,The Law of Dismissa( 2nd edn Rajagiriya:
The Employer’ Federation of Ceylon 2004) 28-35.

Industrial Disputes Act 1970 31B-31D.

The Constitution Of The Democratic Socialist Republic
of Sri Lanka.