Lieu Leave in Sri Lanka: When a Day Off Replaces Pay
A lieu day applies to a sanctioned mercantile holiday worked, or an accumulated weekly holiday. A Poya day worked is paid at least 1.5x, not time off.
On this page
- Weekly holiday worked: pay or lieu?
- Poya days: at least 1.5×, no lieu day
- Mercantile holidays and Commissioner sanction
- Recording lieu so it is not double counted
- How long a lieu day should stay valid
- Worked example for a 7-day retail roster
- Frequently asked questions
- Do part-time or shift staff get the same lieu rules?
- What happens to an unused lieu day if the employee resigns?
- Can a half-day worked earn a half lieu day?
- Can staff choose a lieu day instead of the double pay for a mercantile holiday?
- Is a lieu day the same thing as annual leave?
A day off in lieu (a substitute day, given instead of extra pay) applies in two places under the Shop and Office Employees Act No. 19 of 1954. One is a sanctioned mercantile holiday worked. The other is a weekly holiday accumulated beyond its own week. A Poya day worked is paid at least 1.5x. It is not swapped for a lieu day.
Weekly holiday worked: pay or lieu?
Every shop and office employee gets one whole day and one half-day off each week. It must be given with full remuneration (the Act’s word for salary or wages, including cost-of-living allowance, overtime pay and prescribed allowances) where the employee worked at least 28 hours that week, excluding overtime. The holiday must normally be given that week or the next. Combining weekly holidays into one day a month needs the Commissioner of Labour’s prior written sanction. The Acts use different titles for this office. The Act sets no 1.5x or 2x rate for hours worked on the weekly holiday itself. The rate for those hours is a matter for your own contract or handbook. Check what yours says.
Poya days: at least 1.5×, no lieu day
A Full Moon Poya Day is a paid holiday for every shop and office employee. Working one needs no sanction from the Commissioner of Labour. The employee must be paid at least 1.5 times their normal daily rate for that day. Sometimes a Poya day falls on a weekly holiday, or on another declared holiday. When that happens, no extra day off is due for the Poya day itself. It is treated as already covered. See the full mercantile holidays and Poya days 2026 list for this year’s dates.
Mercantile holidays and Commissioner sanction
The Minister gazettes up to nine mercantile holidays a year. Working one needs the Commissioner of Labour’s prior sanction. Sanction is given only where the Commissioner of Labour is satisfied the business cannot allow the holiday without prejudice to its operations. Where sanction is given and the employee works, the employer must choose one of two things:
- give a substitute paid holiday on or before 31 December that year, or
- pay double the employee’s ordinary rate for that day’s work.
One of the two must happen. Which one is the employer’s choice. For the full rate table, see Poya and holiday pay in Sri Lanka.
Recording lieu so it is not double counted
| Situation | What is due | Sanction needed first? |
|---|---|---|
| Weekly holiday worked, kept within the week | Pay or a substitute day, by your own policy | No |
| Weekly holidays accumulated beyond the week | The holidays are given later, on the sanctioned terms | Yes, in writing |
| Poya day worked | Not less than 1.5x pay, no lieu day | No |
| Mercantile holiday worked | Substitute day on or before 31 December, or double pay | Yes, in writing |
Tag each shift with which type of holiday it falls on before it reaches payroll. A shift tagged the wrong way pays the wrong rate, or grants a lieu day that was never earned.
How long a lieu day should stay valid
The only fixed date any source gives is the mercantile-holiday substitute day, which must be given on or before 31 December of that year. No source sets a general expiry for any other kind of lieu day. Write your own deadline into policy rather than leaving it open-ended, and state what happens if the employee leaves before taking it, since the Act does not say.
Worked example for a 7-day retail roster
A shop open every day rotates staff through the weekly holiday. On a Gazetted mercantile holiday, sanctioned in advance, four staff work a normal shift. Example: a monthly-rated employee on LKR 90,000 has a daily rate of LKR 90,000 ÷ 30 = LKR 3,000.
| Item | Rate | Pay for the day (LKR 3,000 daily rate) |
|---|---|---|
| Mercantile holiday worked, double pay chosen | 2× the daily rate | LKR 6,000 |
| Mercantile holiday worked, lieu day chosen instead | No extra pay that day | A paid day off is owed on or before 31 December |
| Poya day worked the same week | At least 1.5× the daily rate | At least LKR 4,500 |
| Ordinary weekly holiday worked, treated as overtime | Not less than 1.5× the hourly rate | Calculated on hours actually worked |
Check any of these figures with the overtime calculator.
This is general guidance, not legal advice. For a real case, speak to a labour lawyer or the Labour Department.
Do this automatically in Humanised. A leave management system can hold a lieu-leave type, so each promised day off is a recorded balance.
Frequently asked questions
Do part-time or shift staff get the same lieu rules?
Yes. The Act applies to anyone employed in or about the business of a shop or office. The same rules on Poya pay, mercantile-holiday sanction and weekly holidays apply.
What happens to an unused lieu day if the employee resigns?
No source says. Treat it as a point to confirm with the Labour Department before deciding, rather than assuming it is simply lost or must be paid out.
Can a half-day worked earn a half lieu day?
The Act does not set a half-day fraction for any of these holidays. Decide your own proration rule in writing and apply it the same way every time.
Can staff choose a lieu day instead of the double pay for a mercantile holiday?
The choice between a substitute day and double pay belongs to the employer, not the employee, under the Act as summarised here.
Is a lieu day the same thing as annual leave?
No. A lieu day replaces pay for a specific holiday worked. Annual leave is a separate yearly entitlement. See annual leave vs casual leave in Sri Lanka for how that entitlement works, and does unused annual leave carry forward in SL? for what happens to leave you do not take.
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