Employees laid off will receive additional funds for skill enhancement, complementing their severance pay. With the new labor codes set to launch on November 21, 2025, employers are required to allocate 15 days' worth of wages for each affected employee.
The new labour codes that have come into effect from November 21, 2025, have brought in a lot of benefits for both fixed-term and permanent employees. One of these perks include giving re-skilling funds to employees.
In a press release dated November 21, 2025, the government said: “Re-skilling Fund: To train retrenched employees, this fund has been set up from the contribution to be made by industrial establishments for an amount equal to 15 days' wages for every worker retrenched. This is in addition to retrenchment compensation. The amount will be credited to workers’ accounts within 45 days of retrenchment.”
Pranav Bhaskar, Senior Partner, SKV Law Offices, said to ET Wealth Online that the re-skilling fund is a new provision in Indian labour law, which was introduced through the Industrial Relations Code, 2020, and came into effect on November 21, 2025.
According to Bhaskar, it is a mandatory fund, set up through contributions from employers (15 days' wages for each retrenched worker), which are designed to help them learn new skills and find new employment.
Bhaskar says: “Unlike older labour laws, the re-skilling fund recognises that workers need support beyond just compensation when jobs...
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