Maximum job termination compensation doubled

Minister of Labour Nimal Siripala de Silva says the maximum amount of compensation that should be paid to an employee of the private sector and semi-government institutions (corporations and statutory bodies) in case of termination has been increased to Rs. 2.5 million.

The Extraordinary Gazette Notification for the purpose was issued by the Commissioner General of Labour Prabhath Chandrakeerthi on Feb 25.

According to the relevant Compensation Formula issued in 2005 under the Special Provisions for Termination of Employment Act No. 25 of 1971, the maximum amount to be paid was Rs. 1.25 million.

The Minister says that in view of the Vision of Prosperity policy, with the objective of providing maximum relief to workers, the amount of compensation has been increased to Rs. 2.5 million. The Minister further stated that the compensation has been increased after about 15 years.

The Minister has pointed out that for a person who loses his job today, Rs. 1.25 million was not enough to tide him or her over until he or she finds a new job. Trade unions, too, made representation on behalf of workers and asked for an increase in compensation for the termination of employment.

Considering those views, the relevant Act was amended to double the compensation, the Labour Commissioner General has said, adding that the new law will be effective from Feb 19.