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I am working at effluent treatment plant having 3 years and 7 months continuous service. Due to the introduction of RO system, a contractor company who completed the work in our plant is going to take over the plant for operation and maintenance as per the contract agreement. Since i am the junior most employee of the company i am going to be retrenched. What are the retrenchment compensation that i am eligible for.

Note: Company employee on role - 80 contractor employee - 50, factory license is for 150 employee.

My salary details:

Basic - 6000 / DA - 2400 / HRA - 1800 / Conveyance - 800 / Special Allowance - 1000

1. How many months notice pay will I get 3 or 1 month?

2. Compensation for how many years?

3. Shall I get gratuity?

Kindly provide me an answer.


Victor (On behalf of an employee)

From India, Madras
Dear Mr.Victor What is the nature of work done by the employee likely to be retrenched? With regards
From India, Madras
Dear Harikrishnan,
The employee who is likely to be retrenched is a mechanic, but he is not qualified for the same. Only with his experience he has been appointed to do mechanical work in the company.

From India, Madras
Dear Mr.Victor
The indidivudal is entitled to get one month's notice pay and retrenchment compensation at 15 days pay for every completed year of service. He is not entitled to get gratutity as he has not put in five years of continuous service.
With regards

From India, Madras
Dear Mr.Soumik

Please read the post of Mr.Victor. He had stated that the workmen employed by the company are as follows:

Company employee on role - 80 contractor employee - 50, factory license is for 150 employee. Mr.Victor had further posted that the company is an effluent treatment plant. Therefore it has to be a factory as defined under the Factories Act. But the number of company employees is only 80 as stated by Mr.Victor. Therefore, the provisions of Chapter V B of the Industrial Disputes Act 1947 will not apply to this case as the number of workmen employed by the company is less than 100(based on the information furnished by Mr.Victor) Therefore the provisions of Chapter V A will apply. As Chapter V A is applicable prior notice to or permission from Government is not necessary in this case. I am again repeating that my view is based on the facts as furnished by Mr.Victor. For the purpose of Chapter V B the contractor employees need not be taken into consideration and the workmen employed by the company has to be taken into consideration. This is because the retrenchment is done by the Company and not by the contractor

With regards

From India, Madras
Dear Mr.Pon
Gratuity is a legal entitlement different from retrenchment compensation. If a person who is qualified to get gratutity is retrenched from service, he will get both gratuity and retrenchment compensation. The rates are almost the same. In the case referred to by Mr.Victor, the employee is not entitled to get gratuity because he had not worked for five years. Therefore he is entitled to get retrenchment compensation only
With regards

From India, Madras
Dear Mr. Pon
Whatever Mr. Hariharan said is correct. The Gratuity will be paid for those who served 5 years continuous service and the Retrenchment Compensation will be paid for those who served minimum of 1 year service and if retrenched only he is eligible. For Resignation cases the Gratuity will be paid but Retrenchment Compensation & Notice Pay will not be paid.

From India, Kumbakonam
hi, this is sumit .
i am working with broking house, and they ask me for resign without any notice.i am working with this company last 3year and 6 month. so pls help me out.
what could i do in this case.

From India, Delhi
Dear Mr.Harikrishnan,
Mr.Victor has not completed his 5 years and hence he is not eligible for gratuity.
My question is where his gratuity amount will be acumulated which is accountable for his 3 years of service.

From India, Madras
Dear Mr Shankar
The gratutity amount of any worker does not get accumulated anywhere physically. His employer might have shown the gratuity liability for every year in the "liabilities" column of his books of account. This liability might have been deducted from the "gross profit" and the net profit or net loss would have been arrived at. What happens to this accounting transaction after the retrenchment of the worker who is the subject matter of this discussion I do not know. I request any expert in Accounting principles to say whether my views are correct.
With regards

From India, Madras

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