Is Retrenchment Compensation Due When a Job Contract Naturally Ends? Seeking Advice

Our manufacturing unit is a large facility located in West Bengal. A significant number of contractor workmen are engaged in our organization. If a contractor retrenches any of their workmen, retrenchment compensation is provided to them. Recently, a welding job contract concluded on April 16, where the contractor had employed 30 of their workmen. However, the contractor refused to provide retrenchment compensation, citing the end of the job contract and not a mid-contract retrenchment. Referring to the definition of retrenchment in the ID Act, Section 2(oo)(bb) clarifies that it includes "termination of the service of the workman as a result of the non-renewal of the contract of employment between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation in that behalf contained therein; or] (c) termination of the service of a workman on the ground of continued ill-health."

Please advise on whether retrenchment compensation is applicable in the case of the natural expiration of any job contract where a worker's job tenure ends due to the contract's natural conclusion.

Regards,
DG

Contractual Employment and Retrenchment Compensation

If the contractor, at the time of employing the welders, had made a contract with the workers (welders) stating that the employment is for a particular project and will come to an end upon completion of the project, naturally no compensation is required to be paid to the workers if the reason for termination is the completion of the project. On the other hand, if there is no communication from the employer (contractor) at the time of appointment regarding termination of employment upon completion of the job at the Principal employer's plant, then he will be in trouble.

Regards,
Madhu.T.K