Navigating Employee Retrenchment: Rules, Procedures, and Compensation

Hi all,

Can you please share your experience with regard to the retrenchment rule? Over the last three years, our company has been facing financial crises. Please guide me - can we retrench some employees from our organization? If yes, what is the procedure or rule?

Regards,
Akhil

Dear Akhil,

Please provide more details about your organization, such as the number of employees, the nature of work, etc., so that our members can respond accordingly.

Some general rules to be followed during employee retrenchment are as follows:

1. The most recently hired employees should be retrenched first, while retaining those who were hired earlier.
2. If the newly hired employee possesses a skill that the more senior employee does not have, the senior employee may be retrenched in favor of the newer hire.
3. Ensure that retrenched employees receive proper notice period/pay, leave encashment/pay, retrenchment compensation, etc., in accordance with their eligibility.

Thank you.

Sir,

Total of 46 employees are working in our organization. Could you please clarify if we can retrench any employees? If so, what is the procedure?