Dear All,
As per the section 25 FF of ID Act 1947 in case of any change in management by whatsoever means, workmen of the exiting entity should be service with Notice and shall be entitled compensation as if he has been retrenshed in terms of section 25F.
However if the employees/workmen has been transfered with similiar or better benefits n terms of service condition, gratuity etc than no notice shall be given.
"Where the ownership of management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to or that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F, as if the workman had been retrenched:
Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if—
(a) the service of the workman has not been interrupted by such transfer;
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and
(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.]
So, the written consent of employee shall be mandatory in absence of written consent and acceptance there shall be industrial dispute.
In case employee don't want to transfer to new establishment or management, he shall be entitled to all compensation as if he has been retrenched from services. But it shall be subject to that employee should have completed 240 days as continous service in establishmen of transforer.
Though the liability and other compensation payment from management point of view has to be inserted into agreement to seting out liability of both parties.
During M&A exercise, its an important point to be taken care.
As stated above, an acquirer has to ensure continuity of service. The benefits that any worker is entitled to are linked to the total number of days the individual has worked in the organization. For example,a workman is entitled to receive gratuity after completing five years of continuous service. Section 2A of the Payment of Gratuity
Act, 1972 defines continuous service as an uninterrupted period of an employee’s service.