Retirement Age in Sri Lanka: What Employers Must Do
The minimum retirement age in Sri Lanka is 60, or 57-59 for older workers. Employers of 15 or more cannot retire someone earlier without a listed reason.
On this page
- The minimum age, and who was already older
- Who the Act protects
- Retiring someone earlier
- If a worker complains
- Penalties
- Gratuity, EPF and ETF at retirement
- Frequently asked questions
- Can a fixed-term employee still be retired at any age?
- Can we keep employing someone past the minimum retirement age?
- Does gratuity become payable automatically once someone reaches the minimum retirement age?
- What if our business has under 15 workers?
- Can the Commissioner-General order our business to take a worker back?
The Minimum Retirement Age of Workers Act, No. 28 of 2021 sets 60 as the floor. Workers already 52 or older when the Act was certified have a lower floor instead. An employer with 15 or more workers cannot retire a covered worker earlier, except on one of four grounds the Act lists. See labour law in Sri Lanka for the full map.
The minimum age, and who was already older
Act No. 28 of 2021 was certified on 17 November 2021. The Act sets the age test on the date it “came into operation”. Our sources do not confirm this is the same date. Treat 17 November 2021 as the certification date only, until the Labour Department confirms the commencement date.
For a worker under 52 on that date, or hired after it, the floor is 60. A worker who had already turned 52 or more by that date has a lower floor instead:
| Age on the date the Act came into operation | Minimum retirement age |
|---|---|
| 54 or above, below 55 | 57 |
| 53 or above, below 54 | 58 |
| 52 or above, below 53 | 59 |
| Below 52 | 60 |
Source: Minimum Retirement Age of Workers Act, No. 28 of 2021, section 2 and Schedule I.
Who the Act protects
Section 3(1) applies to an employer with 15 or more workers. It says you cannot retire a covered worker before this floor. This does not apply to a worker listed in Schedule II, or in a trade or occupation set by regulation. It does not say you must retire someone exactly at this age. You can keep a worker on past it.
If your business employed 15 workers or fewer, on average, in the 12 months before the retirement, section 3(1) does not apply to you.
Schedule II lists worker categories this protection does not cover, whatever your headcount:
- Workers in the public sector.
- Workers of a statutory body.
- Workers of a government-owned business undertaking registered under the Companies Act, No. 7 of 2007.
- Workers in a Provincial Council or Local Authority.
- Workers recruited by a registered co-operative society.
- Workers of a charitable institution identified under section 68 of the Inland Revenue Act, No. 24 of 2017.
- A worker under a training contract.
- An apprentice or trainee under a Wages Board.
- An apprentice or trainee under the Tertiary and Vocational Education Act, No. 20 of 1990, or the Employment of Trainees (Private Sector) Act, No. 8 of 1978.
- A worker under a fixed term employment contract.
- A worker under a casual employment contract.
- A worker under a seasonal employment contract.
- A part time worker.
- A probationary worker.
- A daily paid worker in employment of a casual nature.
- A student under a temporary contract during study leave.
- Domestic service.
- A worker on a one-off, task-specific engagement.
Source: Minimum Retirement Age of Workers Act, No. 28 of 2021, sections 3(1)-(2) and Schedule II.
Retiring someone earlier
You may retire a covered worker before the minimum age, under their contract or a collective agreement, only on one of these grounds:
- A registered medical practitioner certifies the worker cannot work again because of sickness.
- The worker’s service ended after a disciplinary inquiry, and that finding has not been legally reversed.
- The workplace closed, or was destroyed by a natural cause.
- The Commissioner General of Labour gave prior written approval under the Termination of Employment of Workmen (Special Provisions) Act, No. 45 of 1971.
See getting approval to dismiss staff under TEWA for that process.
A worker can also choose to leave earlier. A lower retirement age fixed in a contract is void. The Act’s minimum retirement age applies instead, subject to section 3. This override does not apply to a business exempt under Section 3(2), or to a worker in a Schedule II category.
Source: Minimum Retirement Age of Workers Act, No. 28 of 2021, sections 3(1) proviso, 3(3) and 4.
If a worker complains
A worker retired early, other than on the four grounds above, can complain in writing to the Commissioner-General, within two months of the retirement date. The Commissioner-General must look into it and decide within two months of getting the complaint. If the complaint succeeds, the Commissioner-General orders the employer to take the worker back and pay wages and other benefits from the retirement date. If reinstatement is not practical because the business has closed or is being wound up, compensation is ordered instead. The formula used is the one set for termination cases.
An employer who disagrees can apply to the Court of Appeal for a writ. First, the employer must deposit security in cash. This is the ordered sum. If reinstatement was also ordered, add 12 times the worker’s monthly salary or wages (26 times the daily wage for a daily-paid worker).
Source: Minimum Retirement Age of Workers Act, No. 28 of 2021, sections 5 and 6.
Penalties
Retiring a covered worker early, without one of the four grounds, is an offence. The fine is up to LKR 5,000, up to six months in prison, or both. Ignoring a Commissioner-General’s order carries a fine of at least LKR 5,000, and the same possible prison term. On conviction, add LKR 100 for each day the failure continues. The employer must also pay the worker’s lost wages from the date in the notice. This runs until conviction, or, if earlier, until the worker reaches the minimum retirement age.
Source: Minimum Retirement Age of Workers Act, No. 28 of 2021, sections 11 and 12.
Gratuity, EPF and ETF at retirement
The Act does not mention gratuity, EPF or ETF at all. It does not say that reaching the minimum retirement age, by itself, ends the employment or triggers a final settlement.
Gratuity still follows its own Act, the Payment of Gratuity Act (which uses “workmen”). 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. Where both are true, gratuity is half a month’s wage or salary, at the rate last drawn, for each completed year of service. This is for a monthly-rated employee. It is paid within 30 days. See what to pay a leaver in a final settlement and counting years of service for gratuity, or check the gratuity calculator.
EPF (the retirement fund: employee 8%, employer 12%) members can withdraw their full balance at 55 (men) or 50 (women). They can withdraw early for five reasons: permanent migration, permanent disability, marriage for a woman, a pensionable government post, or death, paid to nominees. ETF (a fund the employer alone pays 3% into) members claim their balance when they retire or leave. You must certify their contribution record on the claim form. See the EPF employer guide and ETF employer guide.
Source: Minimum Retirement Age of Workers Act, No. 28 of 2021 (silent on gratuity, EPF, ETF); Payment of Gratuity Act, No. 12 of 1983; Humanised’s EPF employer guide and ETF employer guide, reviewed 3 September 2026.
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. An employee management system keeps each worker’s date of birth on their record.
Frequently asked questions
Can a fixed-term employee still be retired at any age?
Schedule II leaves fixed-term and casual workers outside section 3(1). The Act does not set a minimum retirement age for them. It does not say what else applies.
Can we keep employing someone past the minimum retirement age?
Yes. The Act sets a floor below which you cannot retire someone. It does not force it at that age.
Does gratuity become payable automatically once someone reaches the minimum retirement age?
The Act does not say. Gratuity depends on the employee leaving and meeting the Payment of Gratuity Act’s own conditions, which are separate from this Act.
What if our business has under 15 workers?
Section 3(1) does not apply to you if you averaged 15 workers or fewer in the 12 months before the retirement. Other Acts on ending employment still apply.
Can the Commissioner-General order our business to take a worker back?
Yes, where a complaint succeeds: reinstatement and back pay, or compensation if reinstatement is not practical.
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