Retrenchment compensation

The Section 25F(b) of Industrial Disputes Act provides for payment of retrenchment compensation equivalent to 15 days average pay for every completed year of continuous service or any part thereof in excess of six months.

For this purpose, average pay will be calculated as explained underneath.

• a.     if the person is getting monthly salary, then on the basis of the salary of last three calendar months

OR

• b.     If the person is getting weekly wages, then on the basis of wages of last four completed weeks

OR

• c.      If the person is getting daily wages, then on the basis of wages of last twelve full working days.

Under the Industrial Disputes Act, for this purpose salary or wages mean all remuneration capable of being expressed in terms of money, which would be payable to a person in respect of the his employment or work done in such employment, including the value of benefits mentioned in the Explanation to such Act.