Compensation Under the Industrial Disputes Act
The compensation available under the Industrial Disputes Act will be equal to 15 days' wages for every completed year of service. This is available only to employees who have been in service for at least one year. A fraction of a year amounting to more than six months will be rounded up to one year. In addition to this retrenchment compensation, a notice for two months or pay in lieu of notice (in case you are not given advance notice that the company is closing) is also to be paid to all employees who have completed one year of service.
Definition of One Year of Service
One year of service means 240 pay days. Pay days refer to the days on which the employee has received wages, including wages paid for weekly off days and paid leave days.
Additional Compensation for Larger Companies
If your company had more than 100 workers, the compensation will include three months' pay.
Gratuity Under the Payment of Gratuity Act
Additionally, in the case of establishments to which the Payment of Gratuity Act is applicable, employees with five years' continuous service are entitled to gratuity at the rate of 15 days' pay for every completed year of service or fraction of a year in excess of six months. An establishment with at least 10 employees on any day will be liable to pay this.
Regards,
Madhu.T.K