The Key Highlights of the Minium Retirement Age of Workers Act, No. 28 of 2021

A Synopsis of the Minimum Retirement Age of Workers – Bill

Presented by the Minister of Labour to Parliament on 22^nd October 2021

 (Published in the Gazette on 12^th October 2021)

1. What is the Bill about?

• It seeks to enact a piece of legislation named the Minimum Retirement Age of Workers Act (“proposed Act”), to provide for the minimum retirement age at which an employer could retire an employee and for matters connected thereto.
• According to the proposed Act, employers cannot retire employees until they attain the minimum retirement age stipulated therein. The exceptions to this prohibition are set out in points 3 and 4 below.
• If and once this proposed Act is enacted in Parliament, with or without amendments, it will be the first time in Sri Lanka that a minimum retirement age for employees in the private sector, is stipulated by law. The current practice in the private sector has been to fix the retirement age at 55 or 60, contractually.
• The minimum retirement age stipulated in the proposed Act is sixty (60) years for:
  • employees who have not attained 52 years of age on the date on which this Bill comes into operation;
  • employees who are recruited after the date of operation of this Bill, (irrespective of their age).
• If on the date of operation of this Bill, the employee is:
  • 52 years or above but less than 53 years of age- the stipulated minimum age of retirement is 59 years;
  • 53 years or above but less than 54 years of age- the stipulated minimum age of retirement is 58 years;
  • 54 years or above but less than 55 years of age- the stipulated minimum age of retirement is 57 years.

2. To whom will the proposed Act apply?

• to an employer- who is defined as:
  • any person who employs any employee; or
  • causes to be employed any employee on behalf of any other person; and
  • includes a body of employers whether incorporated or not, such as, a firm, company, corporation, trade union or any unincorporated body; and
  • does not include persons who are excluded under the proposed Act or regulations issued under the proposed Act.
• to an employee who is referred to in the proposed Act as “worker” – which term will have the same meaning as “workman” defined in the Industrial Disputes Act, i.e.,
  • any person who has entered into or works under a contract with an employer in any capacity, whether the contract is expressed or implied, oral or in writing, and whether it is a contract of service or of apprenticeship, or a contract personally to execute any work or labour; and
  • includes any person ordinarily employed under any such contract whether such person is or is not in employment at any particular time, and
  • includes any person whose services have been terminated.

3. To whom does the proposed Act and the minimum retirement age not apply?

• to employees of employers who have employed less than fifteen (15) employees or less than that on an average, within the 12 months period, prior to the retirement of any employee.

4.Can an employer prematurely retire an employee?

• An employer could prematurely retire,
  • employees specified in schedule II of the proposed Act, i.e.:
    • employees in the Government sector, statutory bodies established under written law, government owned business undertakings registered under the Companies Act, Provincial Councils or Local Authorities;
    • employees in registered societies within the meaning of the Cooperative Societies Law;
    • employees in charitable institutions identified under section 68 of the Inland Revenue Act;
    • foreign employees who are not citizens of Sri Lanka;
    • fixed term employees under fixed term employment contracts (“fixed term employment” is defined in the proposed Act and it is the first that this term is being defined in a statute);
    • probationers (as defined in the Act), under contracts of service;
    • employees who serve under a contract for an assignment basis employment;
    • part time employees under contracts of service;
    • casual employees under casual employment contracts;
    • seasonal employees under seasonal employment contracts (as defined in the Act);
    • daily paid employees who engage in employment of casual nature (as defined in the Act);
    • employees who have entered into contracts of service for training in any trade or occupation;
    • apprentices/trainees in any wages board established under the Wages Boards Ordinance or covered by the Tertiary and Vocational Education Act or the Employment of Trainees (Private) Sector Act;
    • students on study leave who serve under a temporary term of employment;
    • employees in domestic services;
  • employees engaged in any trade/occupation prescribed by regulation issued under the proposed Act in keeping with the nature of their work
  • employees in terms of their contract of service or collective agreement on the following grounds:
    • upon being sick
    • on disciplinary grounds
    • closure/destruction of establishment due to a natural cause (natural cause has not been defined);
    • with the prior written approval of the Commissioner General of Labour under the Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971.

5. Can an employee prematurely retire from his job?

• An employee could on his own volition, vacate his job, before he attains the stipulated minimum retirement age.

6. Does the proposed Act override other laws and contracts in relation to minimum retirement age?

• Yes, this Act will override and apply notwithstanding any law, contract of service, collective agreement in effect before, on, or after the operation of the proposed Act.

7. To whom can complaints under the proposed Act be made?

• To the Commissioner General of Labour. The procedure in relation thereto is set out in the proposed Act.
• If the Commissioner General finds that an alleged premature retirement is contrary to the Act, he could either:
  • order that the employee/s be reinstated (to their original position with back wages); or
  • order that compensation be granted in terms of the provisions set out in the Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971 (“TEWA”), where he is of the opinion that reinstatement is not practical.

8. What are the implications of contravening the proposed Act?

• Contravention of the proposed Act is identified as a criminal offence attracting a fine not exceeding Rs. 5000/- or imprisonment of either description (i.e., simple or rigorous imprisonment), for a term not exceeding 6 months or to both such fine and imprisonment, if convicted in a Magistrates court.
• Where an offence under the proposed Act is committed by:
  • a corporate entity, every director and officer of that corporate entity;
  • a firm, every partner of that firm;
  • a trade union, every officer of that trade union;
  • unincorporated bodies (other than firms and trade unions), the president, manager, secretary and every officer of such body, will be deemed to be guilty of that offence, unless such persons can prove that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

Author

• Shevanthi Perera
  Partner

• Thamodi Withanachchi
  Senior Associate