Standup Workers Union strongly condemns the sudden and inhumane closure of the Next Garment Factory in the Katunayake Investment Promotion Zone, which has resulted in the sudden loss of jobs for over 1,400 employees employed at the factory without proper consultation or adequate prior notice. The helpless employees have been left in a state of great confusion and mental stress due to this emergency.
This decision, communicated via a WhatsApp message on the night of May 19, 2025, has left hundreds of employees in a state of uncertainty about their future. The employees who went to work that day were unable to bear this sudden message and faced severe mental distress. Employees who have been loyal to the company for over three decades are facing severe economic and emotional distress after losing their job security.
NEXT cited rapidly increasing operating costs as the main reason for the closure, and said the factory had not been profitable for years. While the company said it had considered alternatives, the manner in which the sudden closure announcement was communicated and the failure to properly engage and inform unions and employees prior to the closure can be described as a disregard for ethical business practices and international labor standards.
The following conditions must be met when closing a factory located in an investment promotion zone.
01. Prior written notification to authorities
The investor must notify the Board of Investment in writing (usually at least 3 months before the closure).
02. Employee Awareness
Under the Termination of Employment of Workers (Special Provisions) Act No. 45 of 1971, employees cannot be dismissed unilaterally.
An application must be made to the Commissioner General of Labour for prior written approval before dismissing more than one employee.
The reasons for dismissal (closure, dismissal, etc.) must be clearly stated.
03. Termination Benefits / Compensation
Employees are entitled to compensation based on their length of service. The Labour Department Guidelines (2005) may be used to determine the amount of compensation.
04. All outstanding wages and allowances must be paid.
i.e. EPF and ETF, gratuity, payment for holidays, contractual benefits
05. Collective Bargaining and Trade Union Participation – If a trade union exists, negotiations should be held with the trade union representatives before the closure.
06. Dispute Resolution
If employees or trade unions do not agree on the termination of service, they can file a complaint with the Labour Tribunal, Industrial Court or the Human Rights Commission regarding violations of rights.
Considering these facts, Deputy Minister of Labour Mahinda Jayasinghe stated in Parliament that the Department of Labourdid not inform the management of Next that the factory would be closed, as the government claims, and that it was informed on May 20, 2025.
In such a context, it is clear that there is a risk of a large number of other factories closing down in the future. What will we do if other factories follow the example of Next and suddenly start closing down? If we wait for something to be given today, it will remain like this in the future.
StandUp Workers Union stands for the following demands;
• A tripartite dialogue should be held immediately between the Government of Sri Lanka, NEXT and the trade unions.
• Provide fair, transparent and prompt compensation to all workers.
• Accountability for lack of prior notice, as required under Sri Lankan labour laws and International Labour Organization (ILO) standards.
• Government and Board of Investment (BOI) intervention to ensure the protection of workers’ rights and livelihoods in free trade zones.
As Standup Workers’ Union, we are not just fighting for compensation. We are fighting for safety, dignity, justice and accountability. The voices of over 1,400 workers should not be silenced. They built this factory with their labour and their hearts, and they deserve better than being fired in the middle of the night via WhatsApp. They deserve value.
Standup Workers’ Union stands with all affected workers and will continue to pursue legal, advocacy and advocacy measures to ensure their rights are upheld and protected.
