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Retrenchment compensation

A worker with at least one year of continuous service who is retrenched gets 15 days' average pay for each year counted, and one month's notice or wages instead.

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For a monthly-paid worker, the average of the wages for the three complete calendar months before retrenchment (IR Code s.2).
The Code defines average pay but not this divisor; 26 matches the Central Rules' 1/26th daily wage. Change it if your terms differ.

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This calculator follows IR Code s.70. In establishments covered by Chapter X (not less than three hundred workers, or a higher number the appropriate Government notifies), s.79 applies instead: three months' notice or wages in lieu, and the prior permission of the appropriate Government.

The employer must also contribute 15 days' wages last drawn to the worker re-skilling fund for each retrenched worker (IR Code s.83).

Central sphere. Official text reproduced from the Gazette of India, India Code and State Government sources. This is not legal advice; check the source PDF before relying on any provision.