ANURAG LAKHOTIA
Practicing Advocate
+1 Other

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I work in an IT company under HR Department. The management has decided to issue new appointment letter to every employee under another company. For example, All employees of X, Y, Z are appointed under X company. There are are other Y and Z company. The X company is going to be abolished and some employees will be under Y and some will be under Z company. Should I issue new appointment letter to all the employees? What will be the right way to solve the problem. Please suggest me.
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Please give further inputs e.g. how old is your X company as well as their employee, what is the reason of closing down the company X, whether Y & Z company are sister concerns of company X, whether company X falls under which statutory or registered with PF, ESIC, etc.
The services can be taken over from X company with continuity of service and same terms and conditions. However you can also think of giving full and final in X company and the issuing fresh appointment in other company for this you should take an application for employment from the employee in name of fresh company stating clearly that they have taken there full and final in previous company.
Lexlabour.com
Dear Saji,
Thanks for your reply and query. The age of the company is 8 years. But last two years, the business extended and 95% employees are working here for 2 to 1 years. The company X is going to abolished because govt. will not select the company X for various work. The company X only involves the govt. work.Y and Z are sister concern of X.
Best Regards,
Kamrul
You said that 95% of the employees are 1 or 2 year old, which means other 5% are over 2 years with the company, since your X company is 8 year old all statutory like PF, ESIC, POB, Gratuity, MB Act etc. are applicable, hence it is advisable to merge company X with company Y or Z or take over the company with all dues applicable for employee benefit. You can also transfer all employees to the new company without affecting their privilege or statutory dues.
To the best of my knowledge if merger is not happening then a transfer letter, If the merger is happening then a fresh appointment letter with detailed terms and conditions.
Dear Saji,
Your suggestion helps me lot. Merger is happening. I am very close to reach a decision. When I am issuing a fresh appointment letter, Should I copy the previous appointment letter following the same terms and conditions and date. Should I change the various types of letters issued to employee time to time, for example, increment letter, promotion letter, etc.
Thanks,
Kamrul
You do not need to change every letter issued by the previous company, the letter should be subsequent to all the previous letters issued by the company, the letter will be afresh
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