Press briefing of Cabinet Decision taken on 2021-01-11

Amending the maximum limit of compensation of the compensation formula implemented under the Termination of Employment of Workman (Special Provisions) Act, No.45 of 1971

- Termination of Employment of Workman (Special Provisions) Act, No.45 of 1971 amended by the Act No.12 of 2003 has been enacted to grant relief in terminating the service of workmen. In terms of the provisions of the said Act, a formula has been introduced to determine the compensation to be paid to the workmen when terminating their service. Accordingly, based on the Regulations imposed by the Minister of Labour, the amount will be determined, considering their period of service. Since, a provision to the effect that the compensation computed in terms of the aforesaid formula shall not exceed Rs.1,250,00 has also been incorporated into the Regulations, it has been found that, the compensation entitled to workmen receiving higher monthly salaries in the event of unfair dismissal from service or the closure of institutions remains at a lower level. Taking those issues into consideration, the proposal made by the Minister of Labour to increase the maximum limit of compensation from Rs.1,250,000 to Rs.2,500,00, was approved by the Cabinet.