Navigating Company Transfers: Is It an Internal Move or a New Job?

Dear Seniors, I need your help with a transfer query. One of the XYZ US companies has acquired 51% of our stakes (Company A) and also the stakes of another company in Mumbai (Company B). They now wish to transfer some of the staff from Company A to Company B, where the XYZ company holds a 50% stake.

Transfer Query: Internal Transfer or New Employment?

Should this be treated as an internal transfer requiring the issuance of a transfer letter, or would it entail resigning from Company A and joining Company B as a new employee?

Your prompt response would be greatly appreciated. Regards

If the group is the same and both companies are considered to belong to the same group (i.e., group companies), then a transfer is possible. If the other company has a different name and is not a group company or sister concern, in such a case, an internal transfer is not possible.

Hope I am on the right track.

Regards

Agreeing with Mr. Rajeev's suggestion, there are some tricky problems when transferring people from one group company to another in terms of statutory payments like PF transfer and gratuity.

Considerations for PF Transfer

Consider a scenario where an employee has recently joined and is contributing to PF. In some cases, we can ask them to withdraw their PF from the previous group company or transfer it to the new company. Please prepare a list of people who have completed less than 6 months in the company because they will only have to transfer the PF and not withdraw it.

Handling Gratuity Transfer

Similarly, in the case of gratuity, we need to transfer the gratuity from the existing company to the new company and ensure the proper transfer of the amount by keeping all necessary statutory authorities informed.

A letter of transfer regarding this matter should be sent to the employees, mentioning the reasons for inter-company transfer briefly, and the same should be filed in their personal files for record.