"Employee Issue Regarding Compensation"

Dear Seniors,

I have a query about compensation. I want to know the eligibility of compensation. I am working in a manufacturing company in Delhi. One of our staff employees joined our organization one year back with a gross salary of 15k. Now, he wants to resign. So, I want to know if compensation would be included in his full and final settlement according to the Compensation/Labour Act. If yes, what would be the basic formula to calculate the same?

Please, seniors, share your knowledge.

Thanks & Regards, Abhishek Bhardwaj

If he resigns, where is the question of compensation? What exactly is your question? The question is not clear.

Sivasankaran

Dear Abhishek,

In the case of resignation, only the employee has to pay for the notice period if he does not serve the notice period. You need not pay anything (Notice Pay, Retrenchment Compensation) except the leave pay that is in his credit and his normal salary for the period he served until the last day of work.

A person with one year of service, who opts to resign, is not eligible to claim any compensation from his employer. He is quitting of his own volition. Hence, there will be no employer's liability on this issue.

Compensation arises only in the following circumstances:
- Retrenchment by the employer;
- Retirement on superannuation;
- Death of an employee while in service;
- Disablement due to an accident arising out of and in the course of employment.

The above cases are covered under the ID Act, WC Act, ESI Act, Gratuity Act, etc. You may refer to the relevant provisions in those laws.