Sri Lanka Moves to Scrap Manpower Employment System With New Legislation

The Sri Lankan government is drafting new legislation aimed at abolishing the country's widely criticised manpower employment system, in a move that could significantly strengthen job security for thousands of workers across the island.

A cabinet minister confirmed that authorities are actively working on the legal framework needed to bring an end to the practice, which has long been a source of concern among labour rights advocates and trade unions.

What Is the Manpower Employment System?

The manpower employment system refers to the practice of deploying workers through third-party labour contractors or agencies, rather than hiring them directly under permanent employment arrangements. Critics argue the system leaves workers vulnerable to exploitation, with limited access to benefits, job stability, or legal protections typically afforded to permanent employees.

The system has been prevalent across several sectors in Sri Lanka, including government institutions and state-owned enterprises, where large numbers of workers have been engaged on an informal or contract basis for extended periods.

A Long-Awaited Reform

Labour activists and unions have for years demanded reform of the system, arguing that it effectively denies workers their fundamental rights, including fair wages, leave entitlements, and protection against arbitrary dismissal.

The government's move to introduce formal legislation is being seen as a significant step toward addressing these longstanding grievances. If enacted, the new laws would compel employers to offer direct employment arrangements, bringing a larger portion of the workforce under the full protection of Sri Lanka's labour laws.

Implications for Workers and Employers

The proposed changes are expected to have wide-reaching implications for both the public and private sectors. Among the anticipated outcomes are:

• Greater job security and permanency for workers currently employed through third-party contractors
• Improved access to employee benefits, including Employees' Provident Fund and Employees' Trust Fund contributions
• Reduced exploitation of casual and contract labourers
• Potential cost adjustments for businesses and institutions that have relied on the manpower model

While workers' groups have broadly welcomed the announcement, some business representatives are expected to raise concerns about the financial and administrative burden that a transition to direct employment could place on organisations accustomed to flexible labour arrangements.

Next Steps

The government has not yet announced a specific timeline for the introduction of the bill to Parliament. However, the ministerial confirmation signals that the reform is being treated as a legislative priority, with groundwork already underway to shape the legal provisions needed to make the transition effective and enforceable.

Workers' unions and civil society organisations are likely to closely monitor the drafting process, pushing for robust provisions that leave no room for loopholes that could allow the manpower system to continue in a different form.

For Sri Lanka's labour force, the proposed legislation represents one of the most consequential employment reforms proposed in recent years — one that, if properly implemented, could bring meaningful change to the working lives of a substantial segment of the population.