My company in Gurugram is planning to retrench a group of workers; what is the procedure and what compensation must I pay?

Detailed Legal Analysis

Under the Industrial Disputes Act, 1947, retrenchment of workmen requires one month's notice or pay in lieu, and retrenchment compensation of fifteen days' wages for every completed year of service. The employer must give notice to the appropriate government or authority, and follow the last-in-first-out principle among comparable categories.

The retrenched worker is entitled to be re-employed for one year in preference to new appointees. No retrenchment is permissible without following Section 6N (for establishments with 100+ workers, three months' notice and government permission).

The Punjab and Haryana High Court may be approached to quash illegal retrenchment and order reinstatement with back wages. The Haryana Rent Control Act 1973 on retrenchment may have additional state-specific requirements.

Failure to comply renders the retrenchment void, and the worker is entitled to reinstatement and full wages from the date of retrenchment until the court's order.