Retrenchment compensation for employee working for 3 years

Hello All,

One of the workers who has been serving in his employment for the last three years; however, the company has decided to retrench him. Please guide me on how much compensation the employee is entitled to receive in the event of retrenchment. The employee's salary is 30,000/- per month.

Regards, Nikul

Is he a worker or an employee? Blue-collar workers have different pay rates than knowledge workers or white-collar workers. Which state are you in and what is your sector? Ideally, it's three months' pay, but that's a broad statement. Looking forward to hearing from you so that we can guide you appropriately.

Sir,

He is an employee, and our organization is a Uttar Pradesh-based footwear manufacturing company.

Please clarify how much retrenchment compensation we have to pay to the employee.

There should be a genuine reason, and without that, you cannot remove a staff. If he/she approaches the labor court, the company will have to pay for every day until the judgment date. After the judgment, he/she will again be joining the company. That is the rule in India. Talk to that person, get a resignation from him/her, and amicably solve your issue.

Sir,

As per the law, can a company retrench its employees on the grounds of financial crises? If yes, then how much compensation does the company have to pay?