Termination letter to staff due to company closed down - gratuity act
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norazizah_s Started The Discussion:

Pls. kindly help me to write a sample termination letter to all staff due to company closed down. What is the entitlement for all staff due to this termination?

Your guidance is very help full for me. Thanks anyway!!!

boss2966 - Member Since: Jan 2009
Dear Norazizah_s

If the company closed down, then the terminology 'termination' should not be used.

It is Retrenchment. I feel it can be mentioned as Retrenchment due to redundancy.

Please give your opinion in above terminology.

With warm regards

S. Bhaskar
9099024667

Madhu.T.K - Member Since: Sep 2007
For closing down a company which has had an employment strength of 50 or more employees, a 'simple' letter will not be sufficient but it is to be prepared in accordance with the provisions of the Industrial Disputes Act. Since by closure of the company the employees will become jobless they will have to be given notice in advance (at least one month) or paid notice pay in lieu of notice and they should also be paid retrenchment compensation at the rate of 15 days pay for every completed year of service. This is in addition to gratuity payable under the Payment of Gratuity Act.

Attached please find the form Q which is to be sent to Labour Authorities informing the closure of the company. The same is used to inform the employees also. Hope the same would be useful to you.

Regards,

Madhu.T.K


Attached FilesProvided by community member Madhu.T.K. Join us to learn and grow with your peers.
File Type: doc Form Q (Notice of Closure).doc (28.0 KB, 1978 views)
norazizah_s - Member Since: Jan 2011
Dear boss2966 & Mr. Madhu, Thanks for the reply and knowledge would be useful for me to overcome this situation. Best Regards!!!

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