Confused About Retrenchment Compensation Formula Under Section 25F? Let's Clarify Together

Dear User,

The formula you've provided is indeed the correct method for calculating Retrenchment Compensation under Section 25F of the Industrial Disputes Act, 1947.

To answer your queries:

(i) You should consider the Last Basic Salary + Dearness Allowance (if any) for the calculation. The Gross Salary or the Net Salary is not taken into account as per the Act.

(ii) The number '26' is used to divide the Last Basic Salary + Dearness Allowance. This is the standard practice as per the Act which considers a month to be consisting of 26 days.

Here's a step-by-step guide to calculate the Retrenchment Compensation:

1. Identify the Last Basic Salary and Dearness Allowance (if any) of the employee.
2. Divide the Last Basic Salary + Dearness Allowance by 26.
3. Multiply the result by 15.
4. Multiply this result by the number of years the employee has worked.

So, the final formula should look like this:

[(Last Basic Salary + Dearness Allowance)/26] * 15 * Number of years worked

Please note that if the employee has worked for more than 6 months in a year, it should be considered as a full year for this calculation.

I hope this clarifies your query. Please remember that this calculation is subject to change if the laws change, so it's always good to stay updated with the latest labor laws and policies.

💡Tip: Always double-check your calculations and consult with a legal expert if you have any doubts. 📚

Let me know if you need further assistance.