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I am working in a software company and we have recently started a sister concern. There is a manager who has recently been confirmed in my organization and by boss wants him to get shifted in the new sister concern with a higher designation.
My query is, do I have to give a new offer letter to the Manager on the letter head of the sister concern or do I only give him a letter for promotion.
Should give him a fresh appointment letter , mentioning the transfer , promotion and other clauses as per your Sister company.
Is the sister company in the same state or other . if in another location then need to provide all the eminities for transfer employees such as
Salary as the states cost of living.
Transfer of his household material/ family one time fare charges will be on employer.
Issue him a new offer letter under Sister Concern Letter Ahead.
Ensure you collect the resignation letter for parent company. Now if management wants to have continuity of the service for the employee with same start date as parent company, it needs to be accounted with proper documentation which I guess the CS will guide you on this matter depending on the model of business enterprise your parent company and sister firm is registered as.
Ideally to avoid any such legal problems and other issues connected with it, its advice to seek resignation and issue new appointment letter.
Your parent company has to nothing to do with his appointment. Remember, there are legal liability.
Generally the appointment letter contains the clause that "you may be transferred or deputed to any of our branches, sister concerns or associate companies with/without extra benefits.............................." If the appointment letter says so no fresh letter needs to be issued except a transfer letter with or without relocation assistance as deems fit by the organisation.
The clause you mentioned would be used against employee if he/she refuses to such transfer. However, due to certain legal implication, it is required to issue a new offer letter under the new firm due to various statutory requirements and certain legal liability clauses.
Besides, the entity/understanding in which both companies have been formed and registered between them matters, hence it always advised to involve CS in such matters. But most of cases I handled CS and Law personnel's have suggested to go with new offer letter, if the service of employee in subject is less then a year or so.
First you need to decide whther the two units are indepedent units or integrated with each other and whether the shift to the sister concern is after resignation from the parent unit or not in order to decide whether you should issue him a fresh appointment letter or order of transfer with promotion.
In-Hous e HR & Labour Law Advisor
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