Fixed-Term Contracts in Sri Lanka: Renewal Rules
No Act limits renewing a fixed-term contract in Sri Lanka. TEWA does not say whether letting one lapse counts as a dismissal. What the law covers.
On this page
- No separate category for a fixed-term contract
- Does a lapsed fixed-term contract count as a termination?
- What must be written into the contract itself
- Non-renewal vs termination: what TEWA says
- Gratuity, EPF and leave on a fixed-term contract
- A renewal process that follows the law
- Frequently asked questions
- Does probation inside a fixed-term contract change anything?
- Is there a limit on how many times I can renew a fixed-term contract?
- Are project staff or seasonal hires treated differently under TEWA?
- Does a fixed-term contract avoid the need for Commissioner approval to end it?
- Do EPF and ETF apply to fixed-term staff?
No Act sets a limit on how many times you may renew a fixed-term contract. But the law does not clearly answer one thing. Does letting a contract lapse, without renewing it, count as a dismissal under the Termination of Employment of Workmen (Special Provisions) Act (TEWA)? That point is genuinely open. See labour law in Sri Lanka, the employer’s map of every Act for where TEWA sits among the other Acts.
No separate category for a fixed-term contract
Neither TEWA nor the Shop and Office Employees Act uses the phrase fixed-term contract. Both Acts regulate a workman (TEWA’s word for an employee it covers) and an employee as a whole.
TEWA’s consent-or-approval rule needs all three of these to be true: the employment is scheduled employment; the employer had, on average, 15 or more workmen over the six months before the month of termination; and the workman has been employed by that employer for 180 days or more. If any of the three is missing, the rule does not apply.
TEWA, other than section 3 itself, also does not apply to:
- Retirement under a collective agreement or a contract with an expressly stated retirement age.
- The Government, the Local Government Service Commission, a local authority, a co-operative society, or a public corporation, each as employer.
- Employment that itself already broke the law.
A fixed-term contract reaching its stated end date is not on that list.
That matters, because one exception is easy to confuse with a fixed term. The retirement exception only covers a stated retirement age. It does not cover a project end date or a contract term. A fixed-term contract does not fall under it.
Does a lapsed fixed-term contract count as a termination?
TEWA’s own definition of “termination” is broad. It covers ending a workman’s services “for any reason whatsoever.” The only exception is a disciplinary punishment. It includes non-employment “whether temporarily or permanently.”
Does a fixed-term contract simply running out, unrenewed, count as a “termination” in that sense? TEWA’s text does not say. Nor does it say the opposite. It could just be the contract ending on its own terms.
TEWA does not answer this. Whether repeated renewals change how a case is treated depends on the facts. It also depends on Labour Department or Labour Tribunal practice. Ask the Labour Department or a labour lawyer before relying on any assumption either way.
What must be written into the contract itself
Section 17 of the Shop and Office Employees Act requires written particulars. Regulation 15(1) says they must be given “on the date of his employment.” The particulars must include:
- The name, designation and nature of the appointment.
- The date the appointment takes effect.
- The conditions governing the employment.
- “The circumstances and conditions under which the employment may be terminated” (Regulation 15(1)’s own words).
For a fixed-term role, the term and its end date belong in the “nature of the appointment” and the “circumstances” items. Each renewal is a change to those particulars. Give the employee fresh written particulars stating the new end date. The employer must sign them. The employee must acknowledge receipt.
Source: Shop and Office Employees Act, Regulation 15(1)(a), (b), (h) and (2), checked 20 September 2026.
Non-renewal vs termination: what TEWA says
TEWA does not draw this line for you. It regulates “termination.” It does not separately define “non-renewal.”
TEWA can apply to a workman on a fixed-term contract. The same 15-workmen and 180-day tests apply as for any other workman. Those tests count actual workmen employed and actual days worked. What the contract calls the arrangement does not matter. A fixed-term role can cross the 180-day mark before its stated end date arrives, where leave counts toward the total.
| Test | What it counts | Where a fixed-term role sits |
|---|---|---|
| Scheduled employment | Whether the workplace is scheduled employment under TEWA | Counted the same as any other workman; a fixed term does not change this |
| 15-workmen average | Workmen employed on average over the preceding 6 months | Counted the same as any other workman |
| 180-day service | Actual days worked, plus the absences and statutory leave section 3(1)(b) counts | Can be reached before the contract’s stated end date |
If any of TEWA’s conditions is missing, its consent-or-approval rule does not apply. A dismissed workman can still apply to a Labour Tribunal.
Gratuity, EPF and leave on a fixed-term contract
EPF and ETF apply to a fixed-term worker exactly as they apply to a permanent one. Permanent, probationary, temporary, casual, part-time, apprentice, piece-rate, commission and contract-of-service workers are all members. Contributions are due on total monthly earnings.
Gratuity has its own two conditions. Both of these must be true: the employer had 15 or more workmen on any day in the 12 months before the employee left, and the employee has five years of continuous service. For a monthly-rated employee, the amount is half a month’s wage or salary, at the rate last drawn, for each completed year of service.
One point is not settled. Does a series of fixed-term contracts count as one continuous run of service? That is what the five-year gratuity test needs. Section 20 of the Payment of Gratuity Act counts service interrupted by approved leave “on any ground whatsoever” as completed service. It sets no length limit. Until this is confirmed, treat each case on its own facts.
A renewal process that follows the law
- Before the current term ends, decide whether to renew, and for how long. No Act sets a minimum or maximum length.
- If you renew, issue new written particulars stating the new end date and any changed terms, signed by the employer.
- Get the employee’s signed acknowledgement of receipt.
- Track days actually worked against the 180-day TEWA threshold, and workmen actually employed against the 15-workmen average, for every renewal.
- If you do not renew, keep every past record. This covers the original written particulars and every renewal. A dispute over the end date may come up later.
Do this automatically in Humanised. Contract HR software keeps every renewal’s written particulars in one file. There is a free 7-day assisted trial, set up by the Humanised team on your own data.
This is general guidance, not legal advice. For a real case, speak to a labour lawyer or the Labour Department.
Frequently asked questions
Does probation inside a fixed-term contract change anything?
No extra rule applies. See how an HRIS helps track probation periods, renewals and end-of-contract notices for the written-particulars and TEWA tests that apply during probation, fixed-term or not.
Is there a limit on how many times I can renew a fixed-term contract?
No Act sets one. Each renewal still needs fresh written particulars.
Are project staff or seasonal hires treated differently under TEWA?
TEWA does not create a separate category for them. The same 15-workmen and 180-day tests, counted by actual days and actual headcount, decide whether TEWA’s consent-or-approval rule applies.
Does a fixed-term contract avoid the need for Commissioner approval to end it?
TEWA does not say whether letting a fixed-term contract simply run out counts as a termination needing consent or approval. Check your specific facts with the Labour Department or a labour lawyer.
Do EPF and ETF apply to fixed-term staff?
Yes, on the same terms as permanent staff. See Contractor or Employee? EPF, ETF and Gratuity for how a genuine contractor is treated differently. For notice on ending a fixed-term arrangement, see notice periods in Sri Lanka, employer and employee.
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