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BY SERVICE · Exit & Retrenchment

Termination, retrenchment, gratuity & final settlement

The permission threshold rose from 100 to 300 workers, but notice, compensation, the reskilling fund and final-pay deadlines got tighter.

Applies to: every workplace (factories and mines with 300+ need prior government permission)

What you must do

Conditional

Official

Industrial establishments averaging 300+ over the past 12 months. Apply 90 days before a closure

Source: Shiftee · 2026-10-05 ↗
Required

Official

On average pay, for staff with 1+ year of service

Source: factoHR · 2026 checked ↗
Required

Official

Paid separately by the company on retrenchment (on top of compensation)

Source: factoHR · 2026 checked ↗
Required

Where the 300-worker chapter applies: 3 months' written notice or pay in lieu. Elsewhere reported as 1 month

Source: Shiftee · 2026-10-05 ↗
Required

Official

After 5+ years (except death, disability or end of fixed term): last wage × 15/26 × years of service, capped at ₹20 lakh

Source: Kredily · 2026 checked ↗
Required

Official

Whether resignation, dismissal or retrenchment

Source: Shiftee · 2026-10-05 ↗
Conditional

Termination on expiry is not treated as retrenchment

Source: factoHR · 2026 checked ↗

Steps & deadlines

Documents to prepare

  • Employment contracts and appointment letters
  • Service and wage records
  • Disciplinary and performance records
  • Headcount (12-month average)

Time & fees Example

Duration
1–3 months (by size, example)
Fees
Quote per case
Deliverables
Process plan, notices, settlement statement and agreement (English)

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Recent cases

2024-09 · Deccan Herald News

In September 2024, Samsung India's HR team reportedly emailed striking staff that wages would not be paid for the illegal strike period and asked them to explain why they should not be dismissed if they did not return. The hard line deepened the conflict with the union.

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Exit & Retrenchment · Adullam HR & Legal