Question

Distinguish between retirement and retrenchment.

Answer 1

	Basis of Difference	Retirement	Retrenchment
1.	Meaning	Permanent separation from service when an employee reaches the retirement age.	The employer may permanently terminate an employee due to surplus staff or economic reasons.
2.	Nature of Occurrence	The process is both natural and expected.	Occurs when the business no longer needs the employee due to lack of work.
3.	Timing	Happens when an employee quits after reaching a certain age.	Happens before the employee reaches retirement age.
4.	Nature of Action	Not a penalty; it’s a normal exit from service.	Considered a penalty, though not for employee misconduct.
5.	Trade Union Reaction	Trade unions generally do not oppose these measures.	Trade unions frequently oppose policies, particularly when they are large-scale or unfair.