EMPLOYEES’ TRUST FUND

(1) With effect from such date as the Minister may appoint by Notification published in the Gazette, there shall be established a Board called the Employees’ Trust Fund Board (hereinafter referred to as the ” Board “).

(2) The Board shall be a body corporate having perpetual succession and a common seal and may in its name sue and be sued.

(1) The Board shall consist of the following nine members appointed by the Minister:

(2) The Chairman of the Board shall be appointed by the Minister.

(3) The Minister may, if he thinks it expedient to do so, remove any member of the Board from office without assigning any reason therefor.

(4) A member of the Board who has been removed from office, shall not be eligible for reappointment as a member of the Board or to serve the Board in any other capacity.

(5) A member of the Board may at any time resign his office by written communication addressed to the Minister.

(6) If the Chairman or any member of the Board is temporarily unable to discharge the duties of his office on account of ill-health or absence from Sri Lanka or any other cause, the Minister may appoint another person to act in his place,

(7) Every member of the Board shall, unless he earlier vacates office by death, resignation or removal, hold office for a period of two years. Any member of the Board who vacates office by effluxion of time, shall be eligible for reappointment.

(8) If any member of the Board vacates his office prior to the expiration of his term of office, his successor shall, unless such successor vacates his office earlier, hold office for the unexpired portion of the term of office of the person whom he succeeds.

(9) No act or proceeding of the Board shall be invalid by reason only of the existence of any vacancy amongst its members or any irregularity in the appointment of a member thereof.

(10) The Board may by rules provide for the conduct of its business.

(a) to promote employee ownership, employee welfare, economic democracy through participation in financing and investment;

(b) to promote the employee participation in management through the acquisition of equity interest in enterprises;

(c) to provide for non-contributory benefit to employees on retirement; and

(d) to do all such other acts or things as may be necessary for, or conducive to, the attainment of the objects specified in paragraphs (a), (b) and (c) of this section.

(a) shall receive all sums paid under this Act as contributions to, and the income from the investment of moneys of, the Fund and shall credit such sums and income to the Fund;

(b) shall have custody of the moneys of the Fund ;

(c) shall pay to the persons certified by the Board, the benefits to which such persons are entitled under this Act;

(d) may invest such of the moneys of the Fund as are not immediately required for the purposes of this Act in such shares or securities as the Board may consider fit and may sell such shares and securities ;

(e) shall maintain a general account in respect of the Fund and a separate account (in this Act referred to as the “individual account “) in respect of each member of the Fund;

(f) shall cause the books of accounts relating to the Fund to be balanced as on the thirty-first day of December in each year ;

(g) shall cause to be prepared in respect of the Fund for each year, a statement of receipts and payments, a statement of income and expenditure, a statement of assets and liabilities and a statement of investments showing the face value, purchase price and market value of each of the investments ;

(h) shall transmit to the Minister a copy of each of the statements prepared under paragraph (g) in respect of each year before the thirtieth day of September of the succeeding year;

(i) shall notify each member of the Fund, before the thirtieth day of September in each year the amount lying to the credit of his individual account at the end of the preceding year;

(j) shall deduct from the income from the investment of moneys of the Fund in respect of each year, the expenses incurred in that year by the Board in carrying out the provisions of this Act;

(k) shall have such other powers and duties in connection with the Fund, not inconsistent with this Act, as may be conferred and imposed on such Board, by regulations made under this Act.

(1) The Auditor-General shall audit the accounts of the Board each year.

(2) Notwithstanding the provisions of subsection (I), the Minister may, with the concurrence of the Minister in charge of the subject of Finance, and in consultation with the Auditor-General, appoint a qualified auditor or auditors to audit the accounts of the Board. Where such appointment has been made by the Minister, the Auditor- General may, in writing, inform such auditor or auditors that he proposes to utilize his or their services, for the performance and discharge of the Auditor- General’s duties and functions in relation to the Board and thereupon such auditor or auditors shall act under the direction and control of the Auditor-General.

(3)

(4)

(5) Every qualified auditor appointed under the provisions of subsection (2) shall submit his report to the Minister and also submit a copy thereof to the Auditor- General.

(6) For the purposes of this section, the expression ” qualified auditor ” means

(7) The Auditor-General shall forward his report to the Board.

(1) There shall be paid out of the Consolidated Fund to the Board such sums as may be determined by resolution of Parliament for defraying a

(2) Every sum paid out of the Consolidated Fund under subsection (1) shall constitute a loan from the Government to the Board and shall be repaid in accordance with such terms and conditions as may be determined by the Minister with the concurrence of the Minister in charge of the subject of Finance.

(1) Where an employer first becomes liable under the provisions of this Act to contribute to the Fund in respect of any employee employed by such employer, such employee shall then become a member of the Fund and continue to be a member of the Fund so long as there is any sum to the credit of his individual account in the Fund.

(2) No member of the Fund or other person claiming on behalf of such member shall have any interest in, or claim to, the moneys of the Fund otherwise than by, and except in accordance with, the provisions of this Act or of any regulations made thereunder.

(3) It shall be a condition of any employee’s right to any moneys under the provisions of this Part of this Act that he or any person on his behalf makes a claim thereto in the prescribed manner.

(1) The employer of every employee to whom this Act applies shall, in respect of each month during which such employee is employed by such employer, be liable to pay in respect of such employee, to the Fund, on or before the last day of the succeeding month, a contribution of an amount equal to three per centum of the total earnings of such employee from his employment under such employer during that month.

(2) The liability of an employer to pay contributions under this section shall commence on the day immediately after the day fixed in relation to such employment by the Minister by Order published in the Gazette.

(3) Any contribution made under the provisions of subsection (1) in respect of any employee shall be credited by the Board to the individual account of such employee in the Fund.

(1) Notwithstanding the provisions of section 29 of this Act, where an employer to whom the Employees’ Provident Fund Act applies, has made an election under the provisions of section 11 of that Act to pay to the Employees’ Provident Fund established under that Act or to a provident fund declared to be an approved provident fund under that Act in respect of each employee employed by such employer a contribution of an amount calculated at a percentage higher than the amount specified under that Act and

(2) Any payment made by an employer to the Fund established under this Act in terms of subsection (1) shall be deemed to have been made in compliance with the provisions of section 16.”.(*Deemed to have come into operation on 1st March, 1981. See section 7 of Act No. 3 of 1982.)

(1) Where the Board receives a notice under the provisions of section 18, it may, for the purposes of this Act, direct in writing any person sending such notice, to furnish to the Board before a date specified in such direction, a return in the prescribed form containing particulars regarding his employment, and such person shall comply with such direction.

(2) Any person furnishing a return under subsection (1), may transmit with such return, a request in writing that the contents of such return should be treated as confidential and, where such a request is made, the contents of such return shall not be disclosed without the consent previously obtained of such person.

(3) Nothing in the preceding provisions of this section shall be deemed to require or permit any person to disclose the contents of, or to produce, any return in any case where such disclosure or production is prohibited by or under the provisions of any written law other than this Act.

(1) Where a person sends a notice under the provisions of section 18 and the Board, after considering the return furnished by such person under the provisions of section 19 accepts such person as a member of the Fund, the Board shall inform such person in writing, of such acceptance,

(2) Where a person becomes a member of the Fund under the provisions of subsection (1), he shall in respect of each month, pay on or before the last day of the succeeding month, a contribution of an amount equal to three per centum of his total earnings from his employment for that month.

(3) Any person making a contribution to the Fund under the provisions of subsection (2) shall, after informing the Board in writing, cease to make such contribution from such date as he ceases to be self-employed.

(1) No monies lying to the credit of the individual account of any member of the Fund shall be paid until the expiry of a period of two years from the date of establishment of the Fund.

(2) On the expiry of the period of two years referred to in subsection (1), a member shall be paid the total amount lying to the credit of his individual account subject to the provisions of sections 23, 24 and 25.

(3) Notwithstanding the provisions of subsections (1) and (2), the total amount of monies lying to the credit of the individual account of any member who is to be repatriated under the [Cap. 249, Indo-Ceylon Agreement (Implementation) Act shall be paid to such member prior to the date of his departure from Sri Lanka.

(1) Interest at such rate, not less than three per centum, as may, from time to time, be fixed by the Board with the concurrence of the Minister and the Minister in charge of the subject of Finance shall be paid for each year, out of the income from the investment of the moneys of the Fund, on the amount standing to the credit of the individual account of each member of the Fund as at the thirty-first day of December in that year:

Provided that for the period commencing on the first day of January of the calendar year on which any sum is paid as a benefit under this Act to or in respect of a member of the Fund and ending on the date of payment of that sum, interest at the rate of three per centum per annum shall be paid on the amount to the credit of the individual account of that member at the end of the month immediately preceding the date of termination of that period.

(1) Where the employment of any employee is terminated on disablement due to accident or disease, the sum standing to the credit of such employee in his individual account shall be payable by the Board to such employee, notwithstanding the proviso to section 23.

(2) For the purposes of subsection (1), “terminated on disablement” means cessation of employment by reason of a permanent and total incapacity for work and certified by a registered medical practitioner to be unfit for work any longer for that reason.

(1) On the death of any employee, the sum standing to his credit in his individual account shall be paid by the Board to his nominee. If there shall be no nominee, such sum shall be paid to the executor of the last will or the administrator of the estate of such employee or to the heirs of such employee.

(2) Where a member of the Fund dies before becoming entitled to the amount standing to his credit in his individual account or where he dies after becoming entitled thereto but before receiving such amount and where no nominee has been appointed under regulations made under this Act to whom such amount should be paid in the event of the death of such member, or where the nominee or nominees appointed under regulations made under this Act is or are dead, then such amount shall

(3) A member of the Fund may at any time nominate any person or persons to whom the amount standing to the credit of the individual account of such member in the Fund may be paid in the event of his death.

(4) A member of the Fund may at any time revoke any nomination made by him.

(5) Every nomination and every document or revocation of nomination shall be in the prescribed form.

(6) Every document of nomination and every document of revocation of nomination made by any member shall be forwarded to the Board through his employer within thirty days of the execution of such document.

(7) Any nomination made by a member prior to his marriage shall be deemed to be revoked upon the marriage of such member.

(8) Every nomination made by a member who is married shall be in favour of one or more members of his family.

(1) Where the Board is satisfied that the employer of any employee has, during the period of one year immediately prior to the date of coming into operation of this Act or at any time on or after such date, reduced the earnings of such employee for the purpose of reducing the amount of any contribution payable under this Act, the Board shall, by written notice, direct such employer to pay to the Fund in such instalments and before such dates as may be specified in that notice, in respect of the entire period during which such employee receives such reduced earnings, the difference between the sum he should have paid during that period as contributions, had such contributions been calculated on the basis of the earnings of such employee before the reduction and the sum actually paid by him as contribution during that period.

(2) Where the Board gives any employer a direction under subsection (1), such employer shall comply with that direction.

(a) where such contribution is in arrear for a period not exceeding ten days, surcharge of five per centum of the amount of such contribution;

(b) where such contribution is in arrear for a period exceeding ten days but not exceeding one month, a surcharge of fifteen per centum of the amount of such contribution;

(c) where such contribution is in arrear for a period exceeding one month but not exceeding three months, a surcharge of twenty per centum of the amount of such contribution;

(d) where such contribution is in arrear for a period exceeding three months but not exceeding six months, a surcharge of thirty per centum of the amount of such contribution;

(e) where such contribution is in arrear for a period exceeding six months but not exceeding twelve months, a surcharge of forty per centum of the amount of such contribution; and

(f) where such contribution is in arrear for a period exceeding twelve months, a surcharge of fifty per centum of the amount of such contribution.

(1) Any money due to the Fund shall be recoverable by an action in which proceedings may be taken by way of summary procedure. The provisions of the Civil Procedure Code relating to actions of which the procedure is summary shall apply to an action under this section, and, for the purposes only of the application of such provisions to such action, section 8 of the Civil Procedure Code shall have effect as if, for the words ” by this Ordinance ** occurring in that section, there were substituted the words ” by this Ordinance or by any other written law “.

(2) Where an employer makes default in the payment of any sum which he is liable to pay under this Act and the Board is of the opinion that recovery under subsection (1) is impracticable or inexpedient, the Board may issue a certificate to the District Court having jurisdiction in any district where the defaulting employer resides or in which any property movable or immovable owned by such employer is situated, containing particulars of the sums due, and the name and place of residence of such employer and the Court shall thereupon direct a writ of execution to issue to the Fiscal authorizing and requiring him to seize and sell all the property movable and immovable of the defaulting employer or such part thereof as he may deem necessary for the recovery of the amount so due, and the provisions of sections 226 and 297 of the Civil Procedure Code shall, mutatis mutandis, apply to and in relation to such seizure and sale.

(3) Where an employer makes default in the payment of any sum which he is liable to pay under this Act and the Board is of opinion that it is impracticable or inexpedient to recover that sum under subsection (I) or subsection (2) or where the total amount due has not been recovered by seizure and sale, then the Board may issue a certificate containing particulars of the sum so due and the name and place of residence of the defaulting employer to the Magistrate having jurisdiction over the place of work of such employer. The Magistrate shall thereupon summon such employer before him to show cause why further proceedings for the recovery of the sum due under this Act should not be taken against him and in default of sufficient cause being shown, such sum shall be deemed to be a fine imposed by a sentence of the Magistrate on such employer for an offence punishable with imprisonment and the provisions of section 291 (except paragraphs (a), (f) and (i) of subsection (1) thereof) of the Code of Criminal Procedure Act relating to the default of payment of a fine imposed for such an offence shall thereupon apply and the Magistrate may make any directions which by the provisions of that section he could have made at the time of imposing such a sentence.

(4) The correctness of any statement in a certificate issued by the Board for the purpose of this section shall not be called in question or examined by the court in any proceedings under this section and accordingly nothing in this section shall authorize court to consider or decide the correctness of any statement in such certificate and the certificate of the Board shall be sufficient evidence that the amount due under this Act from the defaulting employer has been duly calculated and that such amount is in default.

(5) Proceedings for the recovery of any moneys due to the Fund may be instituted by the Board or any officer, authorized in that behalf, of the Board and the Board or such officer may, notwithstanding anything to the contrary in any other written law, conduct such proceedings.

(6) The provisions of the Prescription Ordinance shall not apply to the recovery of any sum payable as contribution or surcharge under this Act.

(1) Any person dissatisfied with the determination of the Board may, by written petition in which every other party to the appeal is mentioned as a respondent, appeal to the Court of Appeal from that determination on a question of law.

(2) The petition of appeal shall state the question of law to be argued and shall bear a certificate by an attorney-at-law that such question is fit for adjudication by the Court of Appeal.

(3) The petition of appeal shall be filed within twenty-one days of the date of the determination of the Board.

(1) The Board may appoint such other officers and servants as it considers necessary -for the efficient discharge of its functions.

(2) The officers and servants appointed under subsection (1) shall be remunerated in such manner and at such rates and shall be subject to such conditions of service as may be determined by the Board.

(3) At the request of the Board, any officer in the public service may, with the consent of that officer and the Secretary to the Ministry charged with the subject of Public Administration, be temporarily appointed to the staff of the Board for such period as may be determined by the Board with like consent, or be permanently appointed to such staff.

(4) Where any officer in the public service is temporarily appointed to the staff of the Board, the provisions of subsection (2) of section 13 of the Transport Board Law (No. 19 of 1978) shall, mutatis mutandis, apply to and in relation to him.

(5) Where any officer in the public service is permanently appointed to the staff of the Board, the provisions of subsection (3) of section 13 of the Transport Board Law (No. 19 of 1978) shall, mutatis mutandis, apply to and in relation to him.

(6) Where the Board employs any person who has agreed to serve the Government for a specified period, any period of service to the Board by that person shall be regarded as service to the Government for the purpose of discharging the obligations of such agreement.

(7) At the request of the Board any member of the Local Government Service or any other officer or servant of a local authority, may, with the consent of such member, officer or servant and the Local Government Service Advisory Board, or the local authority, as the case may be, be temporarily appointed to the staff of the Board for such period as may be determined by the Board with like consent or be permanently appointed to such staff on such terms and conditions including those relating to pension or provident fund rights as may be agreed upon by the Board and the Local Government Service Advisory Board or that local authority, as the case may be.

(8) At the request of the Board any officer or servant of a public corporation may, with the consent of such officer or servant, be temporarily appointed to the staff of the Board for such period as may be determined by the Board with like consent, or be permanently appointed to such staff on such terms and conditions including those relating to pension and provident fund rights, as may be agreed upon by the Board and the said public corporation.

(9) Where any person is temporarily appointed to the staff of the Board in pursuance of subsection (7) or subsection (8), such person shall be subject to the same disciplinary control as any other member of such staff,

(a) a return containing such particulars in respect of all or any of the employees of that employer as may be specified in the direction;

(b) such information or explanation in respect of any particulars stated in any return furnished by that employer as may be specified in the direction; and

(c) a true copy of any register required by this Act to be kept by that employer or any part of such register.

(a) enter and inspect at all reasonable hours by day or by night, any premises or place, for examining any register or record relating to the earnings of any employee;

(b) take copies of any such register or record or part thereof;

(c) examine any person whom he has reasonable cause to believe is an employer or any employee ; and

(d) examine any records or other documents relating to contributions to any provident fund.

(a) contravenes or fails to comply with any of the provisions of this Act or any regulations made thereunder; or

(b) makes default in complying with any direction or order made or given under this Act; or

(c) knowingly furnishes or causes to be furnished any false return, or information required to be furnished under section 37 of this Act, shall be guilty of an offence and shall on conviction before a Magistrate be liable to a fine not exceeding one thousand rupees or to imprisonment of either description for a term not exceeding six months, or to both such fine and imprisonment.

(a) if that body of persons is a body corporate, every director and officer of that body corporate; or

(b) if that body of persons is a firm, every partner of that firm ; or

(c) if that body of persons is a trade union, every officer of that trade union; or

(d) if that body of persons is an unincorporated body, the President, Manager, Secretary and every other officer of that unincorporated body, shall be deemed to be guilty of such offence:

Provided that no such person shall be deemed to be guilty of such offence if he proves that such offence was committed without his knowledge or that he exercised due diligence to prevent the commission of such offence.

(1) The Minister may make regulations

(2) Every regulation made by the Minister under subsection (I) shall be published in the Gazette and shall come into operation upon such publication or on such later date as may be specified in the regulation.

(3) Every regulation made by the Minister under subsection (1) shall as soon as convenient after its publication in the Gazette, be brought before Parliament for approval. Any regulation which is not so approved shall be deemed to be rescinded from the date of such disapproval but without prejudice to anything previously done thereunder.