Retrenching Staff Due to Overstaffing: What Are the Legal and Financial Steps?

What happens if we want to retrench a few staff due to an excess of employees?

1) How many months do we have to pay them?

2) Is there anything else besides the compensation pay?

Dear All,

What happens is we want to retrench a few staff due to an excess of employees?

1) How many months do we have to pay them?
2) Is there anything else without the compensation pay?

Regards,
ZT

Faizati,

Retrenchment of employees can be a problematic issue.
1. You need to justify why your company needs to retrench those employees (e.g., Overstaffing, Downsizing, Poor Business, etc.).
2. How do you select employees to be retrenched?
3. The retrenchment conditions and compensation amount should have been included in the company's handbook.
4. To avoid complications and comply with local labor law, it is always advisable to seek advice before taking any action.

Hi,

Under the Industrial Disputes Act of 1947, all legal dues need to be cleared, such as:

1. Retrenchment Compensation
2. Notice Period
3. Leave Wages
4. Gratuity (if applicable)
5. Bonus
6. Ex-Gratia payment (if management desires)

Regards,
Komal