HR Gen
1 year ago
If an employee, who has worked for more than a year in an organization, is laid off or retrenched, is the company legally obligated to pay them a severance pay?
The employment contract says in case the company terminates the contract for a just cause, the employee will be offered a 30-days notice. However, if the employee declines the offer, will the company still be obligated to pay a 1-month severance pay? The Industrial Disputes Act outlines that an employer is required to give at least one month's advance notice or payment in lieu thereof to an employee who has completed at least one year of continuous service before termination.
Yes you are enough eligible for the same.
The retrenchment compensation will be 15 days of last drawn salary multiplied with number of years of service completed in the company. The Honorable Supreme Court of India held that retrenchment compensation is intended to give relief for sudden and unexpected elimination of employment.
Thanks and Regards
Simi Paul
Anonymous
Replied 1 year ago
Thank you Ma'am! In case of a private organization, are the employers bound to follow the Industrial Disputes Act, 1947 or the Shops & Commercial Establishments Act (or other similar Act) of the state they are registered in? The ID Act stipulates at least 15 days of severance pay for employees who have worked for more than a year, whereas considering that the company is registered and based in Gujarat, The Gujarat Shops And Establishments Act, 1948 outlines 30 days of severance pay to an employee who has worked for more than a year, and 14 days of severance pay to an employee who has worked for less than a year but more than 3 months.
Source: https://paycheck.in/labour-law-india/employment-security/notice-and-severance#NoticeGujarat
Anonymous
Replied 1 year ago
Also, if the company is willing to offer the employee a 14-days/30-days notice period (as applicable and in accordance with the labor law), can the employee decline to serve the notice period and still claim severance pay?
Yes, you can claim severance pay for 15 days ad you are elegible for it and if they do not pay then you can serve legal notice.
Hope it helps
Anonymous
Replied 1 year ago
Thank you Sir. In the context of the above question, is there an applicability of severance pay for an employee who has worked for less than a year but more than 3 months?
layoff as BU is closing
Termination
FnF amount not received
No Leave Encashment - Worked for 18 plus years in the organization
Salary FnF not done
