Dear All, Would you please let me know the difference between termination of employment and retrenchment with example.
From India, New Delhi
From India, New Delhi
Hi,
Simply speaking termination of employment means "to put an end to the contract of service for whatsoever reason" . While retrenchment is merely an instance of termination. It is related to the concept of surplus of workforce. If the company justifiably feels that it has got more manpawer than required and can not provide work to all employees the retrenchment can be effected. It has to adhere to the principle of "last come first go". These are the very broad outlines.
Ravindra Pund
From India, Pune
5Simply speaking termination of employment means "to put an end to the contract of service for whatsoever reason" . While retrenchment is merely an instance of termination. It is related to the concept of surplus of workforce. If the company justifiably feels that it has got more manpawer than required and can not provide work to all employees the retrenchment can be effected. It has to adhere to the principle of "last come first go". These are the very broad outlines.
Ravindra Pund
From India, Pune
All cessation of service are termination of employment whereas retrenchment is a term used in the Industrial Disputes Act, 1947 (section 2(oo)to denote such kinds of termination of employment for any reason other than dismissal or discharge from service as a measure of punishment, retirement on reaching the age of Superannuation or voluntary retirement, non renewal of fixed time contract on its expiry or termination of the service of a workman on the ground of continued ill-health. Therefore, if an employee's service is terminated finding that he is surplus, he is said to have been retrenched. Similarly, if the FTC is not renewed, his employment comes to an end and that is termination of employment. If an employee is found guilty of any misconduct his services will be 'terminated' and not retrenched and so on.
Regards,
Madhu.T.K
From India, Kannur
Regards,
Madhu.T.K
From India, Kannur
Dear Mr. Anil Kumar Sharma
Normally Termination is for Disciplinary grounds, in which the company will send the person on the same day of issue of letter and pay for the Notice Period. The Retrenchment means sending out a person from the employement with notice period service, may be on completion of work, on redundancy, on slow down, etc.
In both the cases the expelled person will get all the Financial benefits as per their eligibility and length of service. Whereas in case of Resignation, they will not get Notice Pay and Retrenchment Compensation but eligible to get the Leave encashment (Leave Pay), Gratuity, Bonus.
From India, Kumbakonam
Normally Termination is for Disciplinary grounds, in which the company will send the person on the same day of issue of letter and pay for the Notice Period. The Retrenchment means sending out a person from the employement with notice period service, may be on completion of work, on redundancy, on slow down, etc.
In both the cases the expelled person will get all the Financial benefits as per their eligibility and length of service. Whereas in case of Resignation, they will not get Notice Pay and Retrenchment Compensation but eligible to get the Leave encashment (Leave Pay), Gratuity, Bonus.
From India, Kumbakonam
Dear all,
Retrenchmnent is a statutory termination of service of workmen under ID Act. I agree with Mr.T.Madhu as regards the gist of sec.2 (oo) of I.D. Act, which defines the parameters of 'retrenchment'.
Basically, any termination of the workmen other than by way of punishment by way of disciplinary action and the four excemted situations, any termination of workmen will be contrued as retrencment only regardless of the nomenclature.
What is relevant as regards retrenchment is that a workman retrenched on completion of one year (240 days) is entitiled to compensation as required under sction 25 F of the I.D. Act. In the event of the employer not paying retrenement compensation as requierd u/s 25 F of the Act, the relief for the terminated employee is reintstament with back wages.Hence employers and HR Managers be on gaurd !
As regards termination, it is applicable both for workmen covered under ID Act and also any other employee not coverend under ID Act.
Termination could be of two kinds viz.(i) termination simplicitor and (ii) termination consequent to disci;plinary action.
As regards, termination simplcitor, notice pay must be given by the emplyer as per the Terms of Appointment / Service Contract / Company Standing Orders together with statutory benefits such as Gratuity, EPF as applicable and leave enchansment, if any.
If an employee is terminated consequent to disciplinary action, normally he is forefieted of gratuity. In such a situation it would be prudent for the employer / HR managers to consuult legal experts before issuing termination orders, as any terminated emplyee consequent to discplinary action is bound to approach courts. Even a procedural mistake in terminating an employee consequent to disciplianry action will be having a nullfying effect in the court.
A.Irudayam
Advocate- High Court- Madras
9940686632
From India, Madras
Retrenchmnent is a statutory termination of service of workmen under ID Act. I agree with Mr.T.Madhu as regards the gist of sec.2 (oo) of I.D. Act, which defines the parameters of 'retrenchment'.
Basically, any termination of the workmen other than by way of punishment by way of disciplinary action and the four excemted situations, any termination of workmen will be contrued as retrencment only regardless of the nomenclature.
What is relevant as regards retrenchment is that a workman retrenched on completion of one year (240 days) is entitiled to compensation as required under sction 25 F of the I.D. Act. In the event of the employer not paying retrenement compensation as requierd u/s 25 F of the Act, the relief for the terminated employee is reintstament with back wages.Hence employers and HR Managers be on gaurd !
As regards termination, it is applicable both for workmen covered under ID Act and also any other employee not coverend under ID Act.
Termination could be of two kinds viz.(i) termination simplicitor and (ii) termination consequent to disci;plinary action.
As regards, termination simplcitor, notice pay must be given by the emplyer as per the Terms of Appointment / Service Contract / Company Standing Orders together with statutory benefits such as Gratuity, EPF as applicable and leave enchansment, if any.
If an employee is terminated consequent to disciplinary action, normally he is forefieted of gratuity. In such a situation it would be prudent for the employer / HR managers to consuult legal experts before issuing termination orders, as any terminated emplyee consequent to discplinary action is bound to approach courts. Even a procedural mistake in terminating an employee consequent to disciplianry action will be having a nullfying effect in the court.
A.Irudayam
Advocate- High Court- Madras
9940686632
From India, Madras
Termination after a disciplinary action need not necessarily result in forfeiture of gratuity but only dismissal as a result of those kinds of misconduct , rather severe misconduct, which has caused loss to the company by means of riotous act of the employee or act involving moral turpitude as described in section 4(6)(b) of the Payment of Gratuity Act only will lead to forfeiture of gratuity. In all other termination or discharge of service not within the meaning of section 4(6)(b) gratuity is payable.
Madhu.T.K
From India, Kannur
Madhu.T.K
From India, Kannur
I agree with Madhu. Under Section 4(6)(b) (ii) if gratuity is to be forfeited for any act of moral turpitude, which he committed during the course of his employment, the employee should have been convicted for that offence ( Karnataka SRTC v. Mahadeo, 2009, LLR 978 (Kar HC)
From India, Madras
From India, Madras
a company is going through a slow down with losses in its operation for a period of a year plus however, the management did not fire any of its employees. recently a major client has terminated his contract with the company and due to further financial strangulation, now the management is in no condition to sustain certain employees on its payroll. can the services of selected employees be terminated by paying them their dues and one months notice period salary.
if yes what should it be considered termination or retrenchment and how should it be worded in his final letter.
please advise
From India, Chandigarh
if yes what should it be considered termination or retrenchment and how should it be worded in his final letter.
please advise
From India, Chandigarh
In such cases the termination will be retrenchment only. As such in addition to notice pay compensation at the rate of 15 days pay for every completed year of service is required to be paid. Moreover, intimation or permission depending upon the number of employees employed is also required.
In a service letter it is always desirable to show that the employee was retrenched due to reasons beyond the control of the management.
Madhu.T.K
From India, Kannur
In a service letter it is always desirable to show that the employee was retrenched due to reasons beyond the control of the management.
Madhu.T.K
From India, Kannur
This is a case of retrenchemnt only.
to make it a legal retrenchment, the employer is required to follow the following conditions viz.
1. Comply with the Procedure under section 25 G of ID Act, in as much as the retrenchemnt of workmen must be in the order of employment in a particular category. Essentially, the longnest served workmen must be the last to be retrenched.
2.Comply with the three conditions under section 25 F of ID Act.
Non compliance of the above provisions will lead to a remedy of reinstment and hence emplyer beware.
A.Irudayam
From India, Madras
to make it a legal retrenchment, the employer is required to follow the following conditions viz.
1. Comply with the Procedure under section 25 G of ID Act, in as much as the retrenchemnt of workmen must be in the order of employment in a particular category. Essentially, the longnest served workmen must be the last to be retrenched.
2.Comply with the three conditions under section 25 F of ID Act.
Non compliance of the above provisions will lead to a remedy of reinstment and hence emplyer beware.
A.Irudayam
From India, Madras
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