Coats Thread Lanka (Pvt.) Limited v. Samarasundara – sllr 2010 volume 2 page 001

In Coats Thread Lanka (Pvt.) Limited v. Samarasundara, the court addressed the enforceability of a contractual clause restricting secondary employment (Clause 16(c)), the interpretation of employee repudiation when alternative employment is accepted, and the legality of suspension without pay during disciplinary proceedings. The decision held that dismissal was ultimately justified following a proper inquiry, but wages must be paid to the employee during the suspension period. The ruling reaffirmed the principle that reasonable limits may be placed on restrictive covenants only when proportionate to the employee’s role and interests of the employer, and emphasized that suspension pending inquiry cannot lawfully be without pay unless specifically permitted by contract or statute. Precedents