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The Ministry of Labour's 21 November 2025 release bringing the four Labour Codes into force, with the before-and-after table: mandatory appointment letters for all workers, and gratuity for fixed-term employees after one year.
From
pib.gov.in
by Press Information Bureau
- Appointment letters are mandatory for all workers.
- Fixed-term employees get the same benefits as permanent ones, gratuity after one year.
- Minimum wages now apply to all workers.
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The government's explainer on what each Code changes. For an employer letting people go, it states the re-skilling fund (15 days' wages per retrenched worker, on top of retrenchment compensation, credited within 45 days) and the higher threshold of 300 workers for needing approval to lay off, retrench or close.
From
static.pib.gov.in
by Press Information Bureau
PDF backgrounder
- Retrenching a worker now costs 15 days' wages into the re-skilling fund, in addition to retrenchment compensation.
- Prior government approval for lay-off, retrenchment or closure applies only from 300 workers, up from 100.
- Allowances above half of pay are added back to wages for gratuity and social security.
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The ministry's single page for the four Codes: the text of each Code, the Central Rules notified in 2026, the Industrial Relations Code (Amendment) Act 2026, and the ministry's compiled FAQs, updated through October 2026. This is where to check a rule rather than a summary of it.
From
labour.gov.in
by Ministry of Labour and Employment
Official page
- Read the Code on Wages and the Industrial Relations Code here before relying on a blog's summary.
- The compiled FAQs answer common employer questions on notice, wages and settlement.
- States notify their own rules, so check your state's position alongside the central ones.
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This is the legal spine for doing it cleanly under Indian rules. It spells out why parting during probation is the cleanest exit (lighter notice, no retrenchment machinery), the full-and-final settlement clock (exit wages due within 2 working days of the last day under the Code on Wages), and exactly what to document: termination letter, settlement statement, payment records, and the employee's acknowledgment. It also flags state-by-state notice differences (Maharashtra, Karnataka, Delhi), so a Bengaluru fire follows different paper than a Mumbai one.
From
India Briefing
by Dezan Shira & Associates
15 min read
- Firing during probation is materially cleaner than firing a confirmed employee, so move inside the 60-to-90-day window if you can
- Full-and-final settlement (salary, leave encashment, statutory dues) is legally due within 2 working days of the last day, so pay fast and issue the relieving letter
- Keep the paper trail: termination letter, settlement statement, payment proof, and a signed acknowledgment protect you if it is ever disputed
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This is the India-specific breakdown you owe your team: what full-and-final actually includes (unpaid salary, leave encashment, pro-rata bonus, gratuity after five years for permanent staff and one year for fixed-term staff, EPF), what you can and cannot deduct, and the hard new timeline under the Code on Wages, 2019 (wages within two working days of exit, gratuity within 30 days). It turns your good intentions into a correct, on-time payout.
From
Wisemonk
by Wisemonk
15 min read
- Under the new labour codes, final wages are due within two working days of the last day, not the old 30 to 45
- FnF spans salary, leave encashment, pro-rata bonus, gratuity, and EPF, minus only reasonable contractual deductions
- Gratuity has its own 30-day statutory clock (the Payment of Gratuity Act now sits inside the Code on Social Security); run IT, finance, and admin clearances in parallel to meet it
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An employer's guide, from an Indian payroll company, to the four Labour Codes that took effect on 21 November 2025 and replaced 29 older laws, covering the new wage definition, fixed-term gratuity, appointment letters and gig-worker social security.
From
greytHR
by Prachi S
15 min read
- Allowances cannot exceed 50% of total remuneration, so the wage base for PF and gratuity rises and take-home pay may fall.
- Fixed-term employees become eligible for gratuity after one year instead of five, with parity with permanent staff.
- Employers must issue a formal appointment letter to every employee.
- Many state rules were still being finalised, so follow existing rules in the transition while preparing for the new regime.
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Lopp ran People Ops at Palantir and Pinterest, and his one non-negotiable rule is the one that saves a five-person team: a firing should never be a surprise. He walks the exact sequence, immediate feedback in the first 90 days, an informal pre-PIP conversation, then the formal talk, so by the time you part ways the person has already heard every concern. This is the mechanics behind being direct and kind, and it keeps the four people watching from concluding you fire without warning.
From
First Round Review
by Michael Lopp (Rands)
18 min read
- The longer you avoid a performance problem, the less likely you can ever fix it, so raise it the week you notice it
- Never delegate the hard conversation to HR or a manager; own it directly, that is what the rest of the team is watching
- By the firing day the person should already know every concern, no surprises, because you documented and voiced them along the way
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Dalgaard, who founded SuccessFactors and sold it to SAP for 3.7 billion dollars, makes the case you need to actually pull the trigger: he has never fired anyone too early. His sharpest point is exactly your five-person problem, junior people spot the mis-hire before you do, and every week you tolerate it they lose faith in your judgment and the best ones start eyeing the door. Read it when you are still hoping it works itself out; it will not.
From
Andreessen Horowitz (a16z)
by Lars Dalgaard
12 min read
- Most performance problems are visible within about two weeks, so your gut at 60 days is not premature, it is late
- Your team sees the bad hire before you admit it; tolerating it signals weak leadership and pushes your best people out
- Do it with dignity, but the cost of waiting (lost momentum, eroded trust) always exceeds the discomfort of acting now
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