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Hello
Need help to understand the Severance Law
Does an Internet Company(software services) who has more than 20 employees, liable to pay Severance package to an employee whom they ask to put in a resignation, instead of laying them off. The reason being slow down in work, to control loss and hence redundancy of the resource.
Also, in the above case if the Contract mentions that "termination from either end will have to give 1 month notice".
I appreciate if I someone could explain me what the Law would be in the above case and if the employee has completed 2 yrs in the organization.

From India, Mumbai
Pls read below the rules.

In case of retrenchments, employees with more than one year’s service, and other than temporary or casual employees, are entitled to compensation equivalent to 15 days’ pay for each completed year of service (sec. 25F(b), IDA).

However, a distinction is made for cessation of business for reasons beyond the control of the employer. This might include force majeure, frustration of contract, etc., but does not include financial difficulties or loss of stock. In such circumstances, the employee is still entitled to a redundancy payment, but the amount is less than that given for termination of employment due to other reasons, being a sum equivalent to no more than the average of three months’ pay (sec. 25FFF, IDA).

Under the Payment of Gratuity Act, 1972, a worker continuously employed for five years or more is entitled to a gratuity payment upon termination of service, except where such termination has been as a result of his or her wilful omission or negligence resulting in damage or loss of the employer’s property, in which case the gratuity is forfeited to the extent of the damage caused. Where the employee has been dismissed on account of his or her riotous, violent or disorderly conduct or for an offence involving moral turpitude committed in the course of employment, the gratuity shall be wholly or partly forfeited. The sum is calculated at 15 days’ average pay for every completed year of service.

From India, Lucknow
Does this mean that even if its not mentioned in the employees contract, in addition to the 1 month notice, the employer has to pay the employee 15(days) x 2(yrs) salary?
From India, Mumbai
In your case, one month salary is sufficient whether it is notice pay or compensation for retrenchment. This is my interpretation.
From India, Lucknow
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