The Employers' Federation of Ceylon

Home Labour Law Reforms THE INDUSTRIAL DISPUTES ACT NO.43 OF 1950
Thursday, 26 February 2009 00:00


 The preamble to this Act states that it is for the prevention, investigation and settlement of industrial disputes. Although the preamble refers to the term “termination” of industrial disputes, the mechanism under the Act does not have anything concrete for the prevention of an industrial dispute. The settlement mechanism that is set out in the Act, such as conciliation, arbitration etc, are procedures which need to be followed after an industrial dispute has arisen. Therefore, the dispute settlement mechanism under the Act does not address the prevention of sudden stoppages of work by resorting to strike action which has, over the years, been a cause for much concern for employers operating in Sri Lanka.

Therefore, it is extremely important that we address this issue without any further delay ensuring that employers will at least have due notice before such action is carried out, either by a trade union or by workers. In this context, it is important that the right to strike should be regulated through a Code of Conduct which can be introduced as a mechanism for the prevention of an industrial dispute. Such a Code of Conduct could set out the steps that need to be taken by parties amongst themselves before the matter could be referred to conciliation.

Another important mechanism set up under the Industrial Disputes Act with regard to dispute resolution is the setting up of Labour Tribunals and the appointment of arbitrators. Both these mechanisms grant just and equitable relief to a worker. In doing so, the Labour Tribunals, especially in the case of dismissed employees, are also empowered to grant the relief of reinstatement or compensation.

The relief of reinstatement in service in the case of unjustified termination has been pointed out by us on many occasions as being unhealthy and counter productive to industrial relations.

What needs to be appreciated in this context is that the contract of employment is a contract for personal services and therefore, arbitrarily imposing an employee on an unwilling employer will not result in any productive outcome either to the employee or the employer.

Therefore, there needs to be a change in the law to require that a reinstatement order should always grant an option to the employer to make payment of compensation in lieu.

The rationale underlying the establishment of Labour Tribunals invested with equitable jurisdiction was primarily to cater to an ordinary employee who may not have the means to pursue his case in a court of law. In other words, Labour Tribunals were set up having regard to the lower category of workers and not necessarily the top management executives such as chief executives and managing directors.

Therefore, we need to review the type of worker who should be given access to a Labour Tribunal and limit it to ones who really require relief from such a Tribunal, as in the case of India.


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