Understanding the difference between resignation and termination is important for both employers and employees in Sri Lanka. Although both can bring an employment relationship to an end, the circumstances, legal implications, and available remedies can be different.
What Is Resignation?
Resignation occurs when an employee voluntarily decides to end the employment relationship.
For example, an employee may submit a written resignation letter stating that they wish to leave the organization after serving the required notice period.
A genuine resignation should normally be a voluntary decision made by the employee, without improper pressure or coercion.
What Is Termination?
Termination occurs when the employment relationship is ended by the employer or otherwise comes to an end through an employer-initiated decision.
Termination may arise for different reasons, including:
- Disciplinary misconduct
- Poor performance or incompetence
- Redundancy or business requirements
- Closure of an establishment
- Other grounds recognized under the applicable employment law and the terms of employment
The legal requirements can differ depending on the reason for termination and the employee’s circumstances.
Resignation and Termination: Key Difference
| Resignation | Termination |
|---|---|
| Generally initiated by the employee | Generally initiated by the employer |
| Employee chooses to leave | Employer decides to end employment |
| Usually communicated through a resignation letter | Usually communicated through a termination decision/letter |
| Notice requirements may apply | Legal and contractual requirements may apply |
| May affect the nature of a subsequent employment dispute | May give rise to legal remedies depending on the circumstances |
What About Forced Resignation?
One important issue is forced or coerced resignation.
If an employee claims that they resigned because of pressure, threats, harassment, or circumstances created by the employer, the matter may require examination of the actual facts rather than simply relying on the wording of the resignation letter.
This is also relevant to the concept of constructive termination, where an employee leaves employment because the employer’s conduct is alleged to have made continuation of employment untenable.
Whether a resignation was genuinely voluntary is ultimately a matter that may depend on the evidence and circumstances of the particular case.
Termination and the TEWA
In Sri Lanka, the Termination of Employment of Workmen (Special Provisions) Act No. 45 of 1971, commonly referred to as the TEWA, is an important piece of legislation concerning certain terminations of employment.
However, TEWA does not apply to every employee or every termination. Its applicability depends on factors such as the status of the employer and employee and the circumstances of the termination.
Where TEWA applies, an employer may require the relevant approval of the Commissioner of Labour before terminating employment on grounds covered by the Act, subject to the statutory provisions and exceptions.
Therefore, employers should determine whether TEWA applies before proceeding with a non-disciplinary termination.
What About Disciplinary Termination?
Where termination is connected with alleged misconduct, employers should follow a fair disciplinary process.
Depending on the circumstances, this may include:
- Identifying the alleged misconduct.
- Conducting an appropriate preliminary investigation.
- Informing the employee of the allegations.
- Giving the employee an opportunity to respond.
- Conducting a domestic inquiry where appropriate.
- Considering the evidence and the employee’s explanation.
- Making a reasoned disciplinary decision.
- Communicating the decision properly.
The principles of natural justice and procedural fairness are important considerations in disciplinary matters.
Can an Employee Challenge a Termination?
Yes, depending on the circumstances and the applicable law, an employee may have legal avenues to challenge a termination.
In Sri Lanka, employment disputes may involve institutions and mechanisms such as the Labour Tribunal, Labour Commissioner, Industrial Disputes machinery, or courts, depending on the nature of the dispute and the applicable legislation.
The available remedy can depend on factors such as the employee’s status, the employer, the reason for termination, applicable legislation, and the facts of the individual case.
What Should Employers Do?
Before ending an employment relationship, HR and management should carefully consider:
- The reason for ending employment
- The employee’s contract and applicable policies
- Whether disciplinary procedures are required
- Whether TEWA applies
- Applicable notice requirements
- Statutory payments and benefits
- Proper documentation
- The principles of natural justice
- Potential legal consequences
What Should Employees Do?
Employees who are considering resignation should carefully review their employment contract and understand any applicable notice requirements.
If an employee believes that a resignation was obtained through pressure or that a termination was unlawful or unjustified, they should preserve relevant documents and seek appropriate professional or legal advice.
Final Note
Resignation and termination are not simply two different words for leaving employment. The circumstances in which employment ends can have important legal consequences.
For employers, proper HR procedures, documentation, and knowledge of Sri Lankan employment law can help reduce disputes. For employees, understanding their rights and obligations can help them make informed decisions when leaving employment.
This article provides general information and should not be treated as legal advice. The applicable law and legal remedies depend on the facts of each individual case.
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