Retrenchment of workers requires notice or pay, prior government permission, and statutory compensation on retrenchment.

Retrenchment of a worker with one year's continuous service requires three months' written notice or wages in lieu and prior permission of the appropriate Government obtained via a prescribed application served on affected workers. The Government may inquire, hear parties, grant or refuse permission (reasons to be recorded), and if no order is communicated within sixty days, permission is deemed granted. Grant or refusal is generally final for one year but may be reviewed or referred to a Tribunal. Failure to obtain permission renders retrenchment illegal; granted or deemed permission triggers statutory compensation of fifteen days' average pay per completed year or part beyond six months.

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