Sri Lanka Employment Law Reform: Current Status
A single labour code is being drafted to replace Sri Lanka's separate employment Acts. Here is what is confirmed, and what is not, as of Sep 2026.
On this page
- What is confirmed
- The Acts a single code would need to bring together
- What is not confirmed
- What to do now
- Frequently asked questions
- Has Sri Lanka passed a new employment law?
- Which Acts would the new code replace?
- When will the new law take effect?
- Has an employment law reform been proposed before?
- Should I change my contracts or payroll now?
Last checked: 20 September 2026. A single labour code is being drafted. It would replace several of today’s separate Acts. It is not law yet. No published draft was found on an official government source. No commencement date is confirmed. This page states only what is confirmed.
What is confirmed
A Ministry of Labour expert committee is drafting one unified labour code. It would bring together the Acts that govern hours, leave, pay, EPF, ETF, gratuity and termination today. That is the whole of what an official source confirms, as of 20 September 2026. There is no published draft. There is no confirmed date. There is no confirmed list of which rules would change.
An earlier attempt at reform, the 2023 draft Employment Act, was never enacted.
The Acts a single code would need to bring together
Sri Lanka has no single employment code today. About a dozen separate Acts apply instead, each with its own regulator; see the labour law map for what each one covers and who administers it. No official source confirms which rules from each Act a new code would keep, drop or change.
What is not confirmed
No official government source gives a target date for a draft, names who sits on the committee, or confirms a public consultation. Do not plan payroll or HR changes around a date that is not confirmed on an official source.
What to do now
- Keep following the Acts in force today. These include the Shop and Office Employees Act, the EPF and ETF Acts, the Payment of Gratuity Act, the Termination of Employment of Workmen (Special Provisions) Act, and the Industrial Disputes Act. None of them has been replaced.
- Do not change a contract, a payroll setting, or a termination process, because of an unconfirmed report.
- Check the labour law map and the 2026 payroll law changes page for what has actually changed in 2026.
- Two related rules are already settled, not proposals: see what is the minimum retirement age in Sri Lanka and what must an employer do? and do I need Labour Department approval to dismiss an employee in Sri Lanka?
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. Payroll software in Sri Lanka calculates EPF, ETF and APIT from the rates in force.
Frequently asked questions
Has Sri Lanka passed a new employment law?
No. A committee is drafting a single labour code. No bill has been published or enacted as of 20 September 2026.
Which Acts would the new code replace?
This is not officially confirmed yet. No published draft names the sections or Acts it would combine.
When will the new law take effect?
There is no confirmed date. No official government source gives one.
Has an employment law reform been proposed before?
Yes. A draft Employment Act was proposed in 2023. It was never enacted.
Should I change my contracts or payroll now?
No. Nothing has changed yet. Keep following the Acts in force today. Check back when an official draft or gazette is published.
Was this article helpful?
Your feedback helps us improve these guides.