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to provide a clearer understanding of the existing shortcomings in Sri Lanka's legal framework.The study will ultimately offer valuable insights that can inform and shape reforms in Sri Lanka, helping lawmakers create a more robust and equitable legal framework that ensures outsourced workers are better protected and have access to the same rights and benefits as their permanent counterparts. Understanding the Current State of Outsourced Labor in Sri LankaIn Sri Lanka, businesses increasingly adopt outsourcing, freelancing, and subcontracting to manage costs and maintain flexibility.Both private and public sectors use outsourcing as a strategy to reduce human resource expenses and focus on core activities.Outsourced workers, employed through third-party agencies, often face poor working conditions, low wages, and limited rights, as they are not protected by the same labor laws as direct employees.This results in exploitation, with many outsourced workers unaware of their rights (ILO, 2016a;Jumabhoy et al., 2022).Fernando (2007) highlights the growing use of outsourced labor to reduce costs, but this trend raises concerns about workers' rights and job security.Jayawardena (2016) discusses how companies like Sri Lanka Telecom hire outsourced workers, who often work longer hours with fewer benefits.These workers' lack of accountability can also undermine productivity.Sri Lanka's labor laws regulate employer-employee relationships but do not extend to outsourced workers (Sarveswaran, 2011).Outsourced workers face fewer protections, as businesses reduce liabilities through external labor suppliers.The High Court case Bandara v. Commercial Bank of Ceylon PLC (2015) marked a critical ruling on labor outsourcing.The court ruled that outsourced workers could be considered employees of the principal organization, even if hired through a supplier.The case highlighted issues around unjustified termination and compensation for outsourced employees.In Sri Lanka Telecom PLC v.All Employees' Union of Information and Telecommunication (2014), the court issued an injunction preventing outsourced workers from striking, ruling they were not directly employed by the company.Similarly, in SLT Human Capital Solutions v.All Ceylon Telecommunication Employees Union (2017), an injunction was granted to prevent a strike by outsourced workers demanding absorption into the principal employer.
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Diwan Ruwanpura Dr. Diwan Ruwanpura (2025) studied this question.