Retrenchment: Learn about the meaning

Learn about the meaning, exceptions, reasons, requirements, procedure and criteria of retrenchment in labour law in India. Retrenchment is the termination of an employee's service for economic or business reasons, not for disciplinary action. Understanding the differences between layoff and retrenchment to understand the basic concepts related to labour laws. The processes of dismissal and retrenchment play a crucial role in shaping employer-employee relations, particularly in maintaining a balance between managerial discretion and worker protection. Retrenchment refers to the termination of an employee’s service due to business reasons, such as cost-cutting, restructuring, or downsizing. It is different from other forms of termination because retrenchment is primarily driven by economic or operational needs rather than employee performance.