What are the rights of a workman as to compensation on being retrenched?

How is retrenchment compensation calculated?

Severance pay – a retrenched employee must at least be paid 1 week’s pay for each completed year of ongoing service. … if the employee was employed for more than 6 months but less than 1 year, s/he must be paid 2 weeks’ notice pay; if the employee was employed for more than 1 year, s/he must be paid 4 weeks’ notice pay.

Who is entitled to retrenchment compensation?

Employees who have served the company for at least 2 years are eligible for retrenchment benefit. Those with less than 2 years’ service could be granted an ex-gratia payment out of goodwill.

What is average pay for retrenchment compensation?

Amount of severance pay is equal to 15 days’ wages for each completed year of service. Under the Industrial Disputes Act, retrenched workers are entitled to 15 days’ wages for each completed year of service.

What are the rights of workmen for compensation during layoff?

According to Section 25 C of the Industrial Disputes Act, a workman who is laid-off is entitled to compensation equivalent to 50 per cent of the total basic wages and dearness allowance for the period of lay-off.

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What is unfair retrenchment?

It is a process wherein the employer reviews the business needs, profitability and other operational factors in order to increase profits or limit losses. … However, if an employer doesn’t provide the proper reasons and doesn’t follow the proper procedures, the CCMA or Labour Court can consider the retrenchment unfair.

What are the legal requirements for retrenchment?

The retrenchment package

The employer is legally obligated to pay retrenched employees “severance pay”, being one week’s pay for each completed year of service. This amount may be higher if the employee’s contract says so, or if the industry rate is higher due to a Collective Agreement.

When must a retrenchment package be paid out?

if the employee was employed for less than 6 months, s/he must be paid 1 weeks’ notice pay; if the employee was employed for more than 6 months but less than 1 year, s/he must be paid 2 weeks’ notice pay; if the employee was employed for more than 1 year, s/he must be paid 4 weeks’ notice pay.

What is retrenchment notice period?

If employed for less than six months – one week’s notice; if employed for more than six months but not more than one year – two weeks’ notice and if employed for more than a year – four weeks’ notice. Domestic and farm workers, who have been employed for more than six months, must receive four weeks’ notice.

Can a company hire after retrenchment?

In summary, there is no duty on an employer to re-employ a retrenched employee, nor is there a duty to enter into an agreement that provides for preferential re-employment. The employer is, however, obliged to discuss the possibility of re-employment during the consultation process.

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What is retrenchment bonus?

Retrenchment is the termination of an employee by an employer for reasons other than a punishment meted out by disciplinary action. Employees terminated in such a manner are financially compensated by the employer. This kind of compensation is known as retrenchment compensation.

What is the maximum limit of retrenchment compensation?

Exemption for retrenchment compensation

If retrenchment compensation is received by a ‘workman’ defined under Industrial Disputes Act, then it is exempt up to Rs 5 lakh as per Section 10(10B).