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Kindly confirm is company bound to pay all benefits to retired employees?
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Dear Gaurav,
In fact I am not able to understand your question exactly for it is analogous to the question whether the employer is bound to pay salary to his employees for their services.
Therefore, can I infer that what you really want to know is the various terminal benefits payable to employees and the factors making the employer liable to pay them?
" Terminal benefit" refers to the benefit payable by the employer to the employee on the termination of his employment subject to certain conditions. Again, they can be statutory benefits like gratuity, retrenchment compensation based on certain minimum length of qualifying service or non statutory benefits like pension as per the specific terms of the contract of employment.
Termination of employment actually means the termination of the contract of employment between the employer and the employee concerned. It can be anyone of the following viz., retirement, voluntary retirement, resignation, retrenchment, discharge or dismissal.
Other than dismissal, discharge, resignation and retirement, the employer has to pay retrenchment compensation to the employee if he happens to be a " workman" as defined u/s 2(s) of the Industrial Disputes Act,1947 on the date of termination of employment or in any other case any sum if so fixed under the contract of employment.
In addition, the employee should be paid gratuity under the Payment of Gratuity Act,1972 subject to the applicability of the Act to the establishment and the completion of the qualifying service by the employee on the date of termination. In case of dismissal, gratuity can be forfeited to the extent mentioned u/s 4(6) of the PG Act.
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