New Labour Codes Update: A New Safety Net For Retrenched Workers
So, if the word retrenchment or lay off sends a chill down your career spine, we have got you some useful news that might actually make you breathe a little easier and secure your finances.
Under the historic new labour codes, which is effective November 21, 2025, losing your job now will not feel a random push from the cliff. Why? Because the government has finally handed workers a safety net through new labour law that actually catches them, the Re-skilling Fund.
Here is how it works: if you ever find yourself retrenched, your employer must now deposit an amount equal to 15 days’ wages straight into your account within 45 days. Yes, directly into your account, no chasing HR, no “please check next week,” and no forms disappearing mysteriously.
And the best part? This amount sits on top of your regular retrenchment compensation.
Think of it as the universe saying, “Okay, your job ended, but here’s a boost to help you rise again.”
What Is The Re-Skilling Fund And Why It Matters?
The Re-Skilling Fund refers to a completely original system of financial support that is meant to assist workers in standing again after losing their jobs. This fund will not only leave you with retrenchment compensation but will also bring you extra money, paid directly by your employer, to acquire new skills and re-enter the job market quickly.
Why Is It important?
The reason is that the workplace is transforming rapidly, and along with it, job security has changed too. The fund guarantees that you are not left with the option of waiting and wondering what to do next. It actually provides you with a legitimate opportunity to enhance your skills, switch industries, or even take up roles that are not only in demand but are also being offered in plenty. In a nutshell, it turns job loss from a dead end into a new beginning.
How Retrenchment Compensation Is Calculated
Under the new regime:
- Workers get 15 days’ average pay for every completed year of service as statutory retrenchment compensation.
- Employers must separately pay 15 days’ last-drawn wages into the Re-skilling Fund.
This dual-payment model ensures financial cushioning for workers during the transition period.
How This Makes Termination Less Painful
- Immediate Relief, Right When You Need It: Think of it as a financial life jacket, money lands in your account within 45 days, giving you breathing room instead of panic.
- Long-Term Support That Actually Supports You: Instead of jumping into the first job available, you get funds to upgrade your skills, switch industries, or aim for a higher-paying, future-proof role.
- A Safety Net That Works Like a Springboard: You’re not just being cushioned from the fall, you’re being pushed back up, better trained and more employable.
- No More “What Now?” Moments: With mandated employer contributions, you have a clear path forward, not a guessing game.
Re-Skilling Fund Does Not Substitute For Compensation
Here comes the best part: the Re-Skilling Fund does not mean that your retrenchment compensation will be reduced. You will still receive your full payment, the fund is in addition to it. Just consider it as your “second parachute” when the job market pushes you down from the plane.
Why it exists? The reason is that in the present-day world, money is not the only thing that can keep you from going under. The speed of the changes in the industries is incredible, think of it as, for example, automation, restructuring, cost-cutting, etc. The purpose of this fund is to let you not only survive the fall but also come up with new skills, new opportunities, and a smart way of dealing with the changing job market.
(With Inputs)
Also Read: India’s Labour Market Boom 2025: SBI Forecasts 77 Lakh Jobs…
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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