Can My Friend Ask for a Salary Increase When Moving to a New Organization?

Recently, some of my friends shared with me, "His organization wants to shift him from his current organization to a new one (promoted by them). So, he has to resign from his current organization and will be receiving a new appointment letter from the new organization."

Salary Increase Request

My question is, "Can he request a salary increase?"

Thanks with regards

If the new job has a different profile with a different level of responsibilities and is more important than the present one, and he has the competencies, he can demand a hike. A pay hike is not a ritual to be associated with a change of job.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

One has to refer to the terms of the appointment letter issued to the employee. Normally, it is written in the appointment letter that the job is transferable from one organization to another, whether in existence or likely to come into existence, without any extra or additional remuneration/compensation. In this case, the employee cannot demand any increase in remuneration, and if the employee fails to take charge at new locations, he/she may also be liable for disciplinary action as transferring an employee is the prerogative of the employer.

Thank you, Apoorva, for your response. As the organization has not mentioned anything about internal transfers, he presently has to resign from his current organization. He will receive a new appointment letter the day after his resignation. As you are aware, the HR policy is stringent regarding Annual Increments (AI), which will be based on the work he has done during his tenure.

Thank you once again.

If his present employer wants to transfer him to another sister concern company, he does not need to resign. However, it seems there is something wrong with your query or in the communication between you and your friend. Please ask him again about it. Is he really being asked to resign from the present job? Because if this is correct, then it would not be a transfer of employee case, and he will be a new employee/joinee to this second company. Resignation means the end of employment with a company or organization. Moreover, I wonder why no one has actually noticed this.

Secondly, he certainly can demand a hike in salary as he is going to join a new company (after resigning from the present company). Also, as you said that he is going to be promoted, which means he will be responsible for more and new things, allowing him to request a salary increase.

Anil Arora has informed you correctly. For a transfer, a resignation letter is not required. If he is asked to submit a resignation, then he must request a Full and Final (F&F) settlement with due notice pay, retrenchment compensation, gratuity (if eligible), leave pay/encashment of leave, and other necessary benefits. Then, he can join the new company as a new candidate with a salary hike as per the prevailing market.

Transfer with Promotion

If it is a transfer with a promotion, then obviously they have to provide him with the promotion letter along with the transfer to the new sister concern. In that letter, the employer has to detail his compensation package, retirement benefits, PF amount continuation, and any other benefits existing and revised in the same letter.

Regards

Thank you, Arora. He is going to receive his final settlement from the organization. Next, he will be issued a new appointment letter. His nature of responsibilities and job description will remain the same. An interesting point to note is that his leaves will be carried over to the new position. He mentioned that in the final settlement, he will receive gratuity and can choose to encash all accumulated earned leaves if he desires (no compulsion).

I would like to inform you that he is transitioning his career from the developmental sector to the corporate sector. He is particularly interested in gaining experience that encompasses both sectors. However, his job description and other responsibilities will remain unchanged from what he was previously doing.

Thank you with regards.

The question is not simple, and no simplistic answers will do! Kindly consider the following:

1. New Location or New Company?

- Please confirm if the question is of a new location or of a new company and a new location.

2. Ownership Changes

- Is the ownership going to remain the same?

3. Reason for Arrangement

- Do we know why this arrangement is being worked out?

4. Continuity of Employment

- Why is no "continuity of employment" being offered, as the arrangement offered is likely to adversely affect the "Gratuity" eligibility, "Bonus" eligibility, etc.?

5. New Appointment Terms

- If F & F is affected here and then a new appointment letter for a new job (in a new organization and/or new location) would be issued, what would be the terms & conditions (particularly the emoluments) offered in the new situation? What about the disturbance/relocation compensation, especially regarding, where applicable, children's education, living accommodation, transportation of household effects, old parents staying with the atypical employee?

In the absence of any knowledge or details in response to these and similar questions, it would appear to me that the employer would like to continue to receive the benefits of the knowledge and experience of the present employees and clearly avoid responsibilities toward even the probable difficulties employees may face due to the shift to a new location. Some of them may feel compelled to accept the terms being offered due to the absence of a choice or possibility of a job change, which will take some time anyway!

So much for the HR orientation of the organization's culture! I accept I have no right to sit in judgment, especially in the absence of knowledge of all pertinent facts, yet I fear my apprehensions could as well be well-founded!

Respond, ladies and gentlemen!

Regards,
Samvedan

September 19, 2012

The case you have referred to seems to involve a combination of a transfer and a new appointment! So, if it's not too late, he can ask for a pay hike or a higher salary—whatever you prefer to call it.

Regards,
V. Raghunathan
Navi Mumbai

Thank you for your valuable suggestions. I have learned that he has received another appointment letter with the same job description and a minimal salary increase. Due to the new organization, they are presently not providing PF and other benefits that are mandatory for employment. He also mentioned that he is receiving his salary in installments without the deduction of the ab.

Please let me know if you need any further information.

Thank you.

Best regards