Glossary
Retrenchment
Termination of a permanent workman's service for reasons other than misconduct. Government permission is now required only for establishments with 300+ workers, up from 100.
The Industrial Relations Code raised the threshold at which retrenchment, layoff or closure requires prior government permission from 100 to 300 workers. This is a major deregulation for mid-sized manufacturing and services employers.
Retrenchment compensation (typically 15 days’ average pay per completed year) is still payable regardless of establishment size; only the permission requirement changed. Terminal retrenchment-type payments stay excluded from the wages-deeming calculation.
Why it matters now: employers between 100 and 300 workers who previously needed government sign-off for restructuring no longer do — a real change to workforce-planning timelines.