How Do I Calculate Retrenchment Benefits and Gratuity for 21 Years of Service?

Calculation of Retrenchment Benefits and Gratuity

My query pertains to the method of calculation employed in determining the retrenchment benefit along with gratuity payable to a worker with the following service details:

- Total service: 21 years
- Gross salary: Rs 24,487
- Leave encashment for 76 days
- Bonus amount: Rs 3,454
- Notice period pay for three months: ?
- Retrenchment Benefit/severance pay: ?

Given the above information, I would be grateful if an exact amount could be determined.

Thank you.

Please provide complete details of the worker/employee, including the nature of their job and the wage/salary breakdown. Additionally, information about your industry would be helpful.

The worker is entitled to leave encashment, gratuity, and notice pay as per the Standing Orders or Appointment letter.

Kindly share all relevant details so we can provide accurate assistance to our members.

Thank you.

Dear Bhaskar, Thank you for the prompt reply. Now, he was employed as a driver in a school, ferrying the schoolchildren for a period of 21 years, so his nature of the job amounts to permanent employment. His net salary (last payable) was ₹22,272 in 2013. The salary slip I have is from 2008, which includes remittances under various heads like D.P, D.A, H.R.A, and C.C.A, besides the basic pay and deductions under P.F (in tune with 2008 wages). Lastly, there is no appointment letter, so I presume it is as per the Standing Orders. Regards

Further, he has been given three months' salary in lieu of notice, which is Rs. 73,461/-.

Regards

I do not know who has given you the impression that you are eligible for payment of retrenchment compensation/benefit. Let me make it clear that teachers are not covered under the definition of workmen stipulated in the Industrial Disputes Act, and as such, they are not eligible for retrenchment compensation/benefit. One should understand that this benefit does not automatically accrue based on long service or termination, like the payment of gratuity. Rather, it carries a number of conditions before resorting to retrenchment. Of course, you will be eligible for other benefits as per the school's policy.

Regards,
BS Kalsi