Mapping the Trends 2020 – Amendments to the Wages Boards Ordinance
In 2019, Act no. 14 of 2019 certified on 24th September 2019, amended certain provisions of the Wages Boards Ordinance.
The significant amendment is the repeal of the former section 59A which related to a situation where, by way of trade or for a commercial purpose, one person arranges to have work performed by another – and the other person employs workers for the performance of such work.
Section 59A itself has been replaced by a new section and, further new sections 59B to 59D have been introduced. The new section 59A provides statutory recognition to a principle which had already been established by judicial decision.
The current statutory position is – very briefly stated – as follows:
Where work performed by the workers employed by the second person mentioned above, is performed, (by them), on a regular basis and is integral to the business activities of the former, (the one who obtains the services), the contract/arrangement is deemed to be a disguised employment relationship; and, where the Commissioner of Labour is satisfied that there is in fact such a relationship, the Commissioner is empowered and bound to direct the first mentioned person to refrain from having such work executed under such arrangement. A right of appeal to a Special Employment Relations Tribunal, is provided for.
The establishment of such Tribunal and matters incidental thereto are provided for in section 59B. Section 59C provides for the hearing and determination of appeals and the steps to be taken thereafter, and section 59D makes failure to comply with the Commissioner’s directive an offence in respect of which action may be filed in the Magistrate’s Court.
The other amendments made by Act no. 14 of 2019 relate to such matters as enhancement of penalties for non- compliance/contraventions, increase of time limits for the retaining of records and instituting civil suit for recovery of payments due, etc.
Section 58 created the following offences –
a) failing to furnish the means necessary for any authorised officer for entry or inspection or exercise of any other powers conferred by section 55;
b) hindering or molesting such officer in the exercise of such powers;
c) refusal or failure, without adequate reason, to produce any register, record of wages or notice or give any information required by the officer under section 55.
cc) preventing or attempting to prevent any person from answering any question put by the officer during an examination provided for in section 55.
d) Making or causing to be made, a register, record of wages or notice which is false in any material particular, or producing or knowingly allowing the production of any such document to any officer acting under section 55, knowing the same to be false.
e) Knowingly furnishing any false information to such officer.
f) Making default in compliance with a direction of the Commissioner under section 54 (for the furnishing of any return, register record of wages, information etc. he may require)
g) Where no penalty has been specifically provided for, committing any breach of any provisions o regulations.
The penalty previously provided was a fine of up to Rs. 1000 or imprisonment for up to 6 months, or both. This has now been enhanced to a fine of not less than Rs. 20,000 or imprisonment of up to 12 months – or both.
Amendments have been proposed to the Workmen’s Compensation ordinance and an increase of the rates of EPF has been proposed.
A draft new Employment Act which was released for public comment in 2019, and the enactment thereof, appears to have been stalled and it is not known whether any Government in power after the Parliamentary elections scheduled for the 25th of April, 20202 would pursue the enactment of this draft legislation into law. To read more: https://www.paulhastings.com/area/international-employment-law/sri-lanka
Published by Paul Hastings.
Submission prepared by John Wilson, John Wilson Partners, Attorneys-at-Law & Notaries Public