By: Staff Writer
August 09, Colombo (LNW): The winding-down of Hela Apparel Holdings PLC and two of its subsidiaries has raised questions about the future of thousands of workers, but a restructuring completed before the latest corporate crisis appears to have insulated 3,674 employees from the immediate consequences.
The Board of Investment of Sri Lanka (BOI) said yesterday that employees formerly attached to Hela Clothing Ltd. and Foundation Garments Ltd. remain in employment after being fully absorbed into Emerald Clothing Ltd.
The timing of the transfers is central to understanding why the latest developments at Hela Apparel have not directly translated into job losses for these workers.
Hela Apparel Holdings PLC, together with Hela Clothing and Foundation Garments, has filed applications in the Commercial High Court seeking court-ordered winding up, citing sustained liquidity constraints. Yet the BOI stressed that the affected employees had already moved to Emerald Clothing before those filings were made.
According to official confirmation provided by Emerald Clothing to the BOI, 3,674 workers were absorbed into the company in two phases. The group consisted of 251 executives, 393 staff members and 3,030 team members.
The first transfer, effective May 1, 2026, involved 2,504 employees from the Palapathwela and Thihariya facilities as well as the Emerald Head Office. A second transfer, effective June 1, covered another 1,170 employees from the Naula and Ukuwela facilities and the Head Office.
Taken together, the two phases effectively separated the employment status of these workers from the subsequent winding-up proceedings involving Hela Apparel and its subsidiaries.
Emerald Clothing’s confirmation also states that all transferred employees continued their employment with continuity of service, subject to the applicable terms and conditions of employment. That detail is significant because it indicates that the restructuring was not simply a transfer of workers between entities, but was intended to preserve their employment relationship.
The BOI said its Industrial Relations Department facilitated and monitored the restructuring. The agency has now indicated that it will continue engaging with Emerald Clothing and other stakeholders to monitor employment conditions.
The immediate issue, therefore, is not whether the 3,674 employees were caught in Hela’s latest financial difficulties. According to the BOI, they were not. Their transfer had already been completed.
The larger question is what happens next.
With Hela Apparel and its subsidiaries seeking court-ordered winding up amid liquidity constraints, scrutiny is likely to remain on how the restructuring affects the broader group, its remaining operations and other stakeholders.
For the 3,674 employees covered by the transfer, however, the key protection was established before the winding-up applications emerged: their employment had already moved to Emerald Clothing.
