Legal Consultancy
Sunil Kumar Bhandari
Hr & Operation
Manager Accounts
+4 Others

Thread Started by #CherryEP

We have a firm of under 50 employees, which we need to close down as a result of non-renewal of store leases and the owner/sole proprietor being unable to run the business due to old age.
We need clarity in terms of what all an employee needs to be compensated with at the time of close down of the firm.
Following are the things we are aware of so far:
1. One month\'s notice or salary in the absence of notice
2. Bonus
3. Leave pay upto a maximum of 45 days carried forward
4. Gratuity
Could someone clarify if we need to also include retrenchment or is that a part of gratuity ? In other words, do we need to pay gratuity and retrenchment OR just one of them ?
21st May 2012 From United States, Eden Prairie
Dear Cheery
Reference to your Posting Retrenchment Compensation , Gratuity and Bonus are different enactments.Retrenchment Compensation is different from Notice period,Employee who complete 240 days in a year he/she is entitle Retrenchment Compensation calculated as follows:
Last drawn salary /30 *15 *No:of years
Seniors postings on this appreciated.
21st May 2012 From India, Hyderabad
three/two months before the closoing date, u have to give notice to labour office regarding the closing of ur establishment. Then same as communicated to ur all employees(Individually). With this practice, u are giving 3 months salary as compensation to them.. Try to maintain good relation with labour office.. They will sit and clear the issue of closing matter. As u are submitted the notice to them 2/3 months before.
If, your workmen aware about leaves & Gratuity then have to settle as per law..
21st May 2012 From India, Mathura
Dear Cheery
Kindly refer to the Offer Cum Appointment Letter terms and conditions of individual workmen Termination,reference to that pay salary in the lieu of notice ,if it is factory/Establishment send closure notice to appropriate authority of jurisdiction prior month no need to take confirmation from Labour department because your strength is 50 workmen ,settle all dues to the Workmen as they entitled.
Refer to your posting, Yes- Retrenchment Compensation is different from amount in the respective saving account.
Question to Ms.Authutha 'If workmen not aware of his/her leaves and other benefits entitlement is not justifiable to pay ? .please don't give such kind of advices to the Employers being a HR-Person ,don't make others to suffer.
21st May 2012 From India, Hyderabad
Thanks so much, nareshgadde. I understand that retrenchment compensation is different from the notice amount, which is equal to one month's salary. We are paying both notice amount and gratuity to our employees. I wanted to clarify if we need to pay both gratuity amount and retrenchment or just gratuity because this isn't really laying off an employee since we are closing down the business itself. Also, you mentioned that "send closure notice to appropriate authority of jurisdiction". Who would be the appropriate authority of jurisdiction ?
21st May 2012 From United States, Eden Prairie
Dear Cherry
Retrenchment compensation not one month salary Calculation as follows:Last drawn salary/30*15 days &No.Of Years(It's 15 days salary for each completed year) either your closing it or not the matter here is your are laying Off the Workmen reason whatsoever so the in the context of industrial dispute raises in the court of Law ,then you have to pay Retrenchment compensation as above said calculation.Here appropriate Authority means "nature of operation if it under factories then you have to send Inspector of Factories,Other than this covered in the Shops and Commercial Establishment then "Joint Commissioner of Labour/Deputy Commissioner of Labour "
Gratuity(Continuation of Five Years of Service) ,Bonus(Workmen drawing wage below 10,000/-P.M) ,Retrenchment Compensation , Salary in the lieu of notice,Leave with wages proportionate to daily average wage shall be paid.
I hope you got clarity to extent.
Naresh Gadde
21st May 2012 From India, Hyderabad
dear sir, my friend terminated today , Company says his to his full & final settlements after 01 month pls reply
22nd May 2012 From India, Bhuj
Dear Rajgor
What is the reason of your friend termination?just go through the terms and conditions of his/her appointment letter.Then up to my extent i can give your kind advice.
22nd May 2012 From India, Hyderabad
Dear Rajgor,
I understood now days it is common in the present Employment World,is they paid one month salary /terminated with out notice? how many years of experience in the Company and industry type?
23rd May 2012 From India, Hyderabad
Dear Sir, Please advice me if Our company not pay us the bounus in last year and they are also not paying us the salary from march-2012 plz help us what we do in this matter.
23rd May 2012 From India, New Delhi
Dear Sunil ,
Please specify Bonus year ? incase 2011-2012 then Employer can pay with in eight months from the close accounting year( i.e NOV).Bonus will be paid to the Employees who are drawing less than or Equal to BASIC PLUS DA Rs.10,000/-P M .
SALARY NOT PAYING:Talk to your HR-Team reason of not crediting the salary ,if reason is justifiable to you then wait until their commitment and you can get your salary legally but results unemployment in that Company.

25th May 2012 From India, Hyderabad
I would like to have your personal advise in below scenario.

We have 6 small various companies in at one campus and same location with different name deploying less than 50 manpower on daily basis since more than one year. We have two union at work place. We have made settlement with majority of Union.The other union have not accepted the said settlement hence they have given separate charter of demand and later this dispute referred to labor court for adjudication. Meanwhile they have resorted to illegal strike in April 2007 and till date they are abstaining from the work. By the way we have submitted an application to Labour court to declare this act as illegal strike and case is now on leading evidence from our end.In such situation can we close our sister concern ?Do we need to seek permission from Labour court where dispute of illegal strike is pending.What is the procedure for applying closure of establishment?What reason we can lead to justify the closure?What can we do with the employees who are with majority of union and are working in this sister concerns

Would appreciate your help and reply.
8th May 2014
sir I was worked chita jute mills from 1990 to 2008 after company closed but not given the any notice or closer also not get the grauty with provid fund what can I do now
11th March 2015 From India, Kolkata
Hey.. can you pls help.. if company is shutting down due to union or strike reason.. whether company is liable to pay gratuity to all employees or only to whom who have completed 4 years and 8 months?
5th September 2015 From India, Mumbai
In case of closure of firm you have to pay the closure compensation to the employees @ 15 days of salary per completed year of service and 1 months notice pay also. in addition, you have to pay gratuity to those employees who have completed 5 years of service in the organisation, plus earned salary, outstanding bonus and leave wages also.
11th September 2015 From India, Pune
dear sir, my company is a private ltd company and it is closing down. I am only employee remaining in the company apart from 2 directors. They have given me one month notice. Does retrenchment is applicable in my case too. Looking forward to your valued suggestions.
2nd December 2015 From India, Mumbai
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