Our company gave full and final settlement to a senior employee (at age of 60) in 2015 and hired him again in mid 2017 (at age 62).
Because of pandemic it is not possible for us to employee him any more. We have some confusion on how to calculate the full and final settlement.
1. Should we treat this case as a "retirement" at age 65 wherein we don't have to pay him retrenchment?
2. Shoule we treat this case as a layoff and pay him retrenchment for the 2.5-3 years he has served in the 2nd inning?
From India, Gurgaon
Because of pandemic it is not possible for us to employee him any more. We have some confusion on how to calculate the full and final settlement.
1. Should we treat this case as a "retirement" at age 65 wherein we don't have to pay him retrenchment?
2. Shoule we treat this case as a layoff and pay him retrenchment for the 2.5-3 years he has served in the 2nd inning?
From India, Gurgaon
Dear Chetan,
Reemployment of a retired employee on regular basis in the same establishment is only a new lease of service for all employment purposes. I think that you would have issued orders to that effect only when you rehired him. Better talk to him about your difficulty in retaining him any more and request him to resign in which case no question of terminal benefits like gratuity, retrenchment compensation will arise. If his financial condition is poor, you can pay him some amount equivalent to such benefits. On the contrary, if he happens to be an employee belonging to the "workman" category and you retrench him, you will have to observe all the formalities prescribed u/s 25-F of the IDA,1947; if he belongs to managerial category, you have to act according to the unilateral termination clause of the contract of employment made on his reappointment.
From India, Salem
6016Reemployment of a retired employee on regular basis in the same establishment is only a new lease of service for all employment purposes. I think that you would have issued orders to that effect only when you rehired him. Better talk to him about your difficulty in retaining him any more and request him to resign in which case no question of terminal benefits like gratuity, retrenchment compensation will arise. If his financial condition is poor, you can pay him some amount equivalent to such benefits. On the contrary, if he happens to be an employee belonging to the "workman" category and you retrench him, you will have to observe all the formalities prescribed u/s 25-F of the IDA,1947; if he belongs to managerial category, you have to act according to the unilateral termination clause of the contract of employment made on his reappointment.
From India, Salem
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