Retrenchment compensation to worker working for 20 years - CiteHR
Educator, Management Consultant & Trainer
Rajesh Kumar Dubey
Manager - Hr
+2 Others

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Dear Senior,
This is atul. I have a query regarding retrenchment compensation payable to employees who works more than 20 years in our organization. Instead of Bonus & gratuity , what will be the compensation for retrenchment ?

Dear Atul
Retrenchment benifts differ from person to person according to their status and employment category.
Suppose any person who have been engaged in Workers Category in any establishments, His retrenchment will be governed by Standing Orders if applicable and under the provisions of Industrial Dispute Act.
As in normal practice he will be entitled for 15 days Salary for each completed years of service except gratuity and other payable dues till the date of termination.
If the person are appointed in Staff / Supervisory Category and governed by appointments clause, he will be paid Notice Pay Amount What so ever mentioned in Appointment Letter with all dues including reimbursement of LTA also payable on such date.

Dear Mr. Atul,
Retrenchment compensation under ID act is @15 days per completed year. However, it is in addition to all dues like Bonus , Gratuity, Leave encashment etc not instead of retrenchment compensation.
The provision of retrenchment has been explianed under Act.Please refer carefully Permission for retrenchment clause and from its application point of view to develop proper understanding in totality.
RDS Yadav
Director-Future Instt. of Engg. and Management Technology
Labour Law Advisor

Mr Dubey
Who is a staff?If you mean clerical employees ,remember that they are also workmen entitled for all protection of Industrial Dispute Act.Even a person designated as Manager is also workmen if his predominant nature of work is clerical.

Dear Atul
At the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.
The calculation of compensation is to be based from the date of appointment and in case an employee has completed 240 days, he will be entitled to 15 days retrenchment compensation besides one month’s notice or salary in lieu thereof as if he has worked for one year. 240 days includes Sundays or off days as well as festival or national holidays. In case an employee has worked for more than one year, the procedure is that in case the subsequent period of one year is less than six months then it will be counted as one year for calculation of compensation. While making calculations the period of notice is also to be taken into consideration.

Mr Mathew
Clarification given in general to Mr Atul regarding his quarry, why are u so worry ?
Give ur input any thing has been written wrong direction, Try to be specific on any
problem unless it wants more clarification in issue raised.

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