Under the Industrial Relations Code, 2020, a worker who has been retrenched in accordance with the provisions of the Code is entitled to retrenchment compensation. The retrenchment compensation payable to such a worker is equivalent to:

Explanation: Section 70 (and correspondingly Section 72 for establishments not requiring prior permission) of the Industrial Relations Code, 2020 lays down the conditions precedent to retrenchment of a worker. A worker who has been in continuous service for not less than one year is entitled to retrenchment compensation equivalent to fifteen days' average pay for every completed year of continuous service, or any part thereof in excess of six months. In addition, the worker must be given one month's notice in writing indicating the reasons for retrenchment, or wages in lieu of such notice. The retrenchment must also follow the principle of "last come, first go", whereby the worker who was employed last is ordinarily retrenched first. These safeguards ensure that retrenchment is carried out fairly and that the affected worker receives adequate compensation.