Managing Employee Terminations in Sri Lanka: Are Organisations Getting It Right?



The employee termination is a very sensitive act in Human Resource Management (HRM). In the Sri Lankan organizations, it is not an internally made decision by a HR team, it’s a legal process governed by the Termination of Employment of Workmen Act (TEWA). This process makes it as an important thing for an organisation to handle the termination of an employee carefully and vey responsibly.

The Termination of Employment of Workmen Act (TEWA) says that the organizations with or more than 15 employees cannot be terminate at the moment. A confirmed employee without an employee consent or without an approval from the Commissioner General of Labour cannot be terminated. 

Structured process for employee termination

Above image shows the proper procedures in termination decisions. This law is designed to protect the employees from unfair dismissal. Some of the organizations are using alternatives ways to terminate employees. Such as forcing the employees to resign without going on a formal process, issuing the termination letter without proper process and approval, or miscalculating the employee compensation. These seem to be a quick solution but it always leads to legal and reputational risks. As in the CIPD (2023) ethical HR practices and compliance are leads for employee trust and the organisational credibility. The majority of the organisations focus on the cost savings which effects on the compensation of an employee. The importance of legal compliance in HR practices is shown in the below image.

Role of legal compliance in HR decision-making

When proper procedures are ignored then the organization will face the risks. The lack of awareness in the legal procedures of termination due to the management pressure leads damage employee morale and the organisational reputation. Termination is a structured process with a Proper documentation with correct communication, and legal compliance. In the Deloitte (2023) it is mentioned that the organisations which follow fair HR practices are having a sustain performance.

As a conclusion, Terminations process is more than following the rules. It is a legal compliance and ethical responsibility with a human sensitivity. Organisations that handle this process will avoid the legal issues and also build a strong and trusted workplace.


References (Harvard Style)

CIPD (2023) Employee relations and engagement. Available at: https://www.cipd.org

Deloitte (2023) Global Human Capital Trends. Available at: https://www2.deloitte.com

Government of Sri Lanka (2022) Termination of Employment of Workmen Act (TEWA). Available at: http://www.labourdept.gov.lk

Comments

  1. E. Thrishala N. PereraApril 21, 2026 at 8:19 AM

    This is a very insightful and timely analysis of the complexities within the Sri Lankan labor landscape. You have correctly highlighted that legal compliance under the TEWA is not merely a bureaucratic hurdle but a fundamental safeguard for organizational reputation.

    While many firms prioritize short-term cost-cutting, your argument regarding the long-term reputational risks of forced resignations is critical; such practices inevitably erode employee trust and employer branding. Furthermore, the emphasis on ethical responsibility alongside legal mandates serves as a vital reminder that termination, when handled without human sensitivity, can lead to systemic cultural decay within a workplace. Great synthesis of CIPD and Deloitte frameworks to contextualize local challenges.

    ReplyDelete
    Replies
    1. Devaraj SanjeevApril 21, 2026 at 9:37 AM

      Thank you for your thoughtful feedback. I appreciate how you showed the link between legal rules, ethical responsibility, and long-term company reputation. Your point about forced resignations hurting trust and employer branding is very important in Sri Lanka. I also agree that poor handling of terminations can damage workplace culture. This makes the discussion stronger and shows why HR needs a fair and responsible approach.

      Delete
  2. E. Thrishala N. PereraApril 21, 2026 at 8:20 AM

    This is a very insightful and timely analysis of the complexities within the Sri Lankan labor landscape. You have correctly highlighted that legal compliance under the TEWA is not merely a bureaucratic hurdle but a fundamental safeguard for organizational reputation.

    While many firms prioritize short-term cost-cutting, your argument regarding the long-term reputational risks of forced resignations is critical; such practices inevitably erode employee trust and employer branding. Furthermore, the emphasis on ethical responsibility alongside legal mandates serves as a vital reminder that termination, when handled without human sensitivity, can lead to systemic cultural decay within a workplace. Great synthesis of CIPD and Deloitte frameworks to contextualize local challenges.

    ReplyDelete
  3. Kriss StevenApril 21, 2026 at 9:20 AM

    This is a very important and often overlooked HR topic, and you’ve handled it well by linking legal compliance with ethical responsibility. I also like how you highlight that termination in Sri Lanka is not just an internal HR decision but a regulated legal process under TEWA that context is essential and sometimes missed in HR discussions.

    One question that comes to mind is: in practice, how can organizations in Sri Lanka balance strict legal compliance with the need for organizational flexibility, especially when performance issues require quick workforce decisions but the termination process is highly regulated?

    ReplyDelete
    Replies
    1. Devaraj SanjeevApril 21, 2026 at 9:41 AM

      Thank you for your question. In practice, organisations can manage this by focusing on proactive performance management instead of waiting until termination is needed. Steps like setting clear KPIs, giving regular feedback, and using performance improvement plans (PIPs) help solve problems early. At the same time, keeping proper records and communicating openly ensures compliance while allowing timely action. This way, flexibility comes from structured processes, not from ignoring legal rules.

      Delete
  4. Shewan SundarampillaiApril 21, 2026 at 9:40 AM

    I appreciate how you have highlighted the importance of TEWA compliance and the risks organizations face when they bypass proper procedures. The point about some companies forcing resignations or miscalculating compensation is very relevant, as these shortcuts often damage trust and reputation in the long run. I also like how you have connected ethical HR practices with sustainable performance, showing that terminations are not just a legal requirement but a test of organizational credibility. Overall, this is a strong reminder that handling employee exits with fairness, transparency, and sensitivity is essential for building a trusted workplace culture in Sri Lanka.

    ReplyDelete
    Replies
    1. Devaraj SanjeevApril 22, 2026 at 8:00 PM

      Thank you for your clear and thoughtful feedback. I really appreciate how you highlighted the link between TEWA compliance and long-term organisational trust. As you mentioned, forced resignations may seem like a quick solution, but they can lead to serious legal and reputational risks if not handled properly. I also agree that managing terminations ethically is essential for maintaining a positive workplace culture. Your points add valuable depth to the discussion and reinforce the importance of responsible HR practices in Sri Lanka.

      Delete
  5. Chandima KarunarathneApril 21, 2026 at 10:44 AM

    Good topic choice, this is a sensitive but very important HR area, and you’ve made the legal angle clear.

    I like how you emphasized that termination is not just an HR decision but a regulated legal process under TEWA, and how you linked it to ethics and organizational reputation. The point about informal or forced resignations leading to legal and reputational risk is also very relevant in practice.

    One improvement would be to clarify the process flow more consistently and avoid repetition around compliance. Also, you could briefly highlight that fair termination processes also protect remaining employees’ trust and morale, not just legal safety.

    Overall, this is a strong summary of why termination must be handled with structure, fairness, and legal compliance in HRM.

    ReplyDelete
    Replies
    1. Devaraj SanjeevApril 22, 2026 at 8:17 PM

      Thank you for your constructive and thoughtful feedback. I appreciate your point about improving clarity in the process flow and reducing repetition around compliance—it’s something I will definitely refine. I also agree that fair termination practices are not only about legal protection but also about maintaining trust and morale among remaining employees. Your insights add valuable perspective to the discussion and strengthen the overall argument.

      Delete
  6. Nimesha EkanayakaApril 21, 2026 at 11:10 AM

    The blog clearly highlights employee termination as a delicate and legally significant HR issue in Sri Lanka. It effectively explains the consequences of ignoring proper procedures and stresses the importance of ethical and compliant practices. However, improving clarity and organization would enhance its effectiveness.

    ReplyDelete
    Replies
    1. Devaraj SanjeevApril 22, 2026 at 8:18 PM

      Thank you for your valuable feedback. I appreciate your point on improving clarity and organisation, and I will work on refining the structure to make the discussion more effective. I’m glad the importance of legal compliance and ethical practices in employee termination came through clearly. Your suggestion helps strengthen the overall quality of the blog.

      Delete

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