Dear Seniors,
Would like to know, whether an employee is eligible for getting both gratuity benefit and retrenchment benefit, if the company retrenches an employee after his/her continuous 5 years of services.
If so, kindly help me out by providing the exact section as per Gratuity Act and Industrial Dispute Act.
If not, he/she will be eligible only for gratuity.
Awaiting for your response.
Regards,
Anitha B
From India, Madras
Would like to know, whether an employee is eligible for getting both gratuity benefit and retrenchment benefit, if the company retrenches an employee after his/her continuous 5 years of services.
If so, kindly help me out by providing the exact section as per Gratuity Act and Industrial Dispute Act.
If not, he/she will be eligible only for gratuity.
Awaiting for your response.
Regards,
Anitha B
From India, Madras
Dear Anitha B,
The employee will be getting both the benefits. Plz refer to section 4 & 25F/25N as the case may be under the Payment of Gratuity Act, 1972 & The Industrial Disputes Act, 1947 respectively.For retrenchment compensation you may go through chapter VA & VB of the I D Act.
[SIZE=1]R.N.KHOLA
[B][COLOR=#3366FF][FONT=Verdana]
From India, Delhi
363The employee will be getting both the benefits. Plz refer to section 4 & 25F/25N as the case may be under the Payment of Gratuity Act, 1972 & The Industrial Disputes Act, 1947 respectively.For retrenchment compensation you may go through chapter VA & VB of the I D Act.
[SIZE=1]R.N.KHOLA
[B][COLOR=#3366FF][FONT=Verdana]
From India, Delhi
Dear Anitha,
Follow this:
Payment of gratuity.
4. (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, —
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease :
INDUSTRIAL DISPUTES ACT, 1947
Conditions precedent to retrenchment of workmen.
25F. No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
45[***]
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 46[for every complet¬ed year of continuous service] or any part thereof in excess of six months;
and
(c) notice in the prescribed manner is served on the appropriate Government 47[or such authority as may be specified by the appropriate Government by notification in the Official Gazette].
[Conditions precedent to retrenchment of workmen.
25N. (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,—
(a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and
(b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneous¬ly on the workmen concerned in the prescribed manner.
(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicat¬ed to the employer and the workmen.
(4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not commu¬nicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub¬section, it shall pass an award within a period of thirty days from the date of such reference.
(7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such period as may be specified in the order.
(9) Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.]
These provisions have been altered by states that u have to search for and then u come to the ultimate conclusion regarding Retrenchment Compensation,
Regards,
KIRAN KALE
From India, Kolhapur
Follow this:
Payment of gratuity.
4. (1) Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, —
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease :
INDUSTRIAL DISPUTES ACT, 1947
Conditions precedent to retrenchment of workmen.
25F. No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—
(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
45[***]
(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay 46[for every complet¬ed year of continuous service] or any part thereof in excess of six months;
and
(c) notice in the prescribed manner is served on the appropriate Government 47[or such authority as may be specified by the appropriate Government by notification in the Official Gazette].
[Conditions precedent to retrenchment of workmen.
25N. (1) No workman employed in any industrial establishment to which this Chapter applies, who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until,—
(a) the workman has been given three months' notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; and
(b) the prior permission of the appropriate Government or such authority as may be specified by that Government by notification in the Official Gazette (hereafter in this section referred to as the specified authority) has been obtained on an application made in this behalf.
(2) An application for permission under sub-section (1) shall be made by the employer in the prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such application shall also be served simultaneous¬ly on the workmen concerned in the prescribed manner.
(3) Where an application for permission under sub-section (1) has been made, the appropriate Government or the specified authority, after making such enquiry as it thinks fit and after giving a reasonable opportunity of being heard to the employer, the workmen concerned and the persons interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons stated by the employer, the interests of the workmen and all other relevant factors, by order and for reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order shall be communicat¬ed to the employer and the workmen.
(4) Where an application for permission has been made under sub-section (1) and the appropriate Government or the specified authority does not commu¬nicate the order granting or refusing to grant permission to the employer within a period of sixty days from the date on which such application is made, the permission applied for shall be deemed to have been granted on the expiration of the said period of sixty days.
(5) An order of the appropriate Government or the specified authority granting or refusing to grant permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties concerned and shall remain in force for one year from the date of such order.
(6) The appropriate Government or the specified authority may, either on its own motion or on the application made by the employer or any workman, review its order granting or refusing to grant permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred, to a Tribunal for adjudication:
Provided that where a reference has been made to a Tribunal under this sub¬section, it shall pass an award within a period of thirty days from the date of such reference.
(7) Where no application for permission under sub-section (1) is made, or where the permission for any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on which the notice of retrenchment was given to the workman and the workman shall be entitled to all the benefits under any law for the time being in force as if no notice had been given to him.
(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate Government may, if it is satisfied that owing to such exceptional circumstances as accident in the establishment or death of the employer or the like, it is necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in relation to such establishment for such period as may be specified in the order.
(9) Where permission for retrenchment has been granted under sub-section (3) or where permission for retrenchment is deemed to be granted under sub-section (4), every workman who is employed in that establishment immediately before the date of application for permission under this section shall be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months.]
These provisions have been altered by states that u have to search for and then u come to the ultimate conclusion regarding Retrenchment Compensation,
Regards,
KIRAN KALE
From India, Kolhapur
Sir/Madam,
I would like to know the eligibility of both "Retrenchment Compensation" and "Gratuity"....
One of my friend asked to resign (as there were no projects) and he has been given 2months of notice period.
In this situation will he be eligible for both "Retrenchment Compensation" and "Gratuity"???
Thank you in advance.
From United States, New York
I would like to know the eligibility of both "Retrenchment Compensation" and "Gratuity"....
One of my friend asked to resign (as there were no projects) and he has been given 2months of notice period.
In this situation will he be eligible for both "Retrenchment Compensation" and "Gratuity"???
Thank you in advance.
From United States, New York
Dear Seniors,
Please let me know that if any employee who has not completed 5 years service in the company and his services are terminated, will he be eligible for the gratuity amount (i.e. 15 days pay for every completed year of service) along with the other retrenchment benefits like15 days salary for every completed year of service and 1 month salary against notice pay.
From India, Hyderabad
Please let me know that if any employee who has not completed 5 years service in the company and his services are terminated, will he be eligible for the gratuity amount (i.e. 15 days pay for every completed year of service) along with the other retrenchment benefits like15 days salary for every completed year of service and 1 month salary against notice pay.
From India, Hyderabad
Subject - Re: Retrenchment and gratuity benefits - Both are eligible or not
Dear Mahio
1. Retrenchment is specified in Industrial Disputes Act 1947. As per Retrenchment clause Employer has to pay Retrenchment compensation to workman @ 15 days wages for per completed year of service
2. Gratuity is specified in Payment of Gratuity Act 1972. As per gratuity act employee who has completed contineous 5 years service is eligible to receive gratuity @ 15 days wages for per completed year of service.
In case of Resignation of your friend, retrenchment compensation is not payable. Gratuity is payable @ 15 days salary for per completed year of service, provided he has completed 5 years or more service
Regards
SDP
From India, Kolhapur
Dear Mahio
1. Retrenchment is specified in Industrial Disputes Act 1947. As per Retrenchment clause Employer has to pay Retrenchment compensation to workman @ 15 days wages for per completed year of service
2. Gratuity is specified in Payment of Gratuity Act 1972. As per gratuity act employee who has completed contineous 5 years service is eligible to receive gratuity @ 15 days wages for per completed year of service.
In case of Resignation of your friend, retrenchment compensation is not payable. Gratuity is payable @ 15 days salary for per completed year of service, provided he has completed 5 years or more service
Regards
SDP
From India, Kolhapur
In case of death of an employee while in service, there is no provision to pay Retrenchment Compensation to the legal heirs of the deceased.
From India, Kolhapur
From India, Kolhapur
Dear Seniors, I would like to know the process of retrenchment and who carries out the entire procedure? Awaiting your reply. Regards, Mizbah Maymon.
From India, Pune
From India, Pune
Dear Mizbah Maymon
The process/steps to follow for Retrenchment are specified in I D Act 1947. If your establishment employing less than 100 workman then 1) Prepare seniority list & display 2) While retrenchment you have to follow the principle "Last come First Go" 3) Pay one month Notice pay in lieu of Notice of Retrenchment/You have to give one month Notice 4) You have to pay compensation @ 15 days wages for per completed year of service or part in excess of 6 months. 5) You have to serve notice to Govt in the prescribed format. If you have employed 100 or more than 100 workman then you will have to obtain the permission from Govt ,before retrenchment.
The Employer/company's HR/ IR dept is suppose to carry out such legal issues in consultation with their Consultant. If you fail to complete the above any one or all, the retrenchment, if challenged in the court , will be illegal.
Regards
SDP
From India, Kolhapur
The process/steps to follow for Retrenchment are specified in I D Act 1947. If your establishment employing less than 100 workman then 1) Prepare seniority list & display 2) While retrenchment you have to follow the principle "Last come First Go" 3) Pay one month Notice pay in lieu of Notice of Retrenchment/You have to give one month Notice 4) You have to pay compensation @ 15 days wages for per completed year of service or part in excess of 6 months. 5) You have to serve notice to Govt in the prescribed format. If you have employed 100 or more than 100 workman then you will have to obtain the permission from Govt ,before retrenchment.
The Employer/company's HR/ IR dept is suppose to carry out such legal issues in consultation with their Consultant. If you fail to complete the above any one or all, the retrenchment, if challenged in the court , will be illegal.
Regards
SDP
From India, Kolhapur
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Gratuity Benefits-pOINTS TO BE NOTED.docx