Labour outsourcing has emerged as a popular practice in the business sector, offering flexibility and cost-efficiency to organizations. In Sri Lanka, this practice has been prevalent for over three decades, yet remains an evolving and under-regulated concept in the labor market. Outsourcing involves delegating specific business processes to external service providers, enabling organizations to save on hiring and training costs while focusing on core operations. However, when entrepreneurs source manpower without obtaining the necessary skills, expertise, or tools, they face heightened risks of non-compliance with labor regulations.
This study critically examines the legal and practical dimensions of labor outsourcing in Sri Lanka. It investigates the existing labor laws that govern outsourced workers and the adverse effects of organizational practices on this workforce. The absence of specific legislation regulating the sector allows businesses to manage labor flexibly but creates ambiguity regarding the rights and protections of outsourced employees. These workers, employed by third-party suppliers and deployed under the supervision of entrepreneurs, operate outside the traditional employer-employee framework, leaving their labor rights inadequately addressed under current laws.
The study undertakes a comparative analysis of labor outsourcing frameworks in Malaysia, Indonesia, and the Philippines to highlight best practices and statutory provisions that could address the gaps in Sri Lanka's legal framework. By exploring the impact of these legal structures, the study identifies actionable insights for developing a robust regulatory framework that balances organizational efficiency with worker protections. Ultimately, this research endeavors to propose a comprehensive legal framework that ensures lawful business operations while safeguarding the rights of outsourced workers in Sri Lanka.
Keywords: Labour Outsourcing, Sri Lanka, Legal Framework, Outsourced Workers, Labour Rights, Labour Laws, Business Organizations, Flexibility in Labour Handling, Third-Party Manpower Suppliers, Employer-Employee Relationship, Comparative Analysis, Malaysia, Indonesia, Philippines, Worker Protections, Legislative Gaps, Regulatory Framework, Entrepreneurship, Cost-Efficiency, Labour Regulations