Employees moved to sister company of a dissolving company.

Guidance Needed for Employee Transfer During Company Dissolution

My company is dissolving, and I have been asked to move all the current employees to our sister concern. Should the employees be given a relieving letter from the dissolving company and then an appointment letter from the new company, or can I share a transfer certificate with them stating that they are being moved? Also, if anyone can share a format for the transfer certificate, it would be very helpful. In the case of issuing a transfer certificate, should the employee number be kept the same?

Kindly share your guidance.

Thank you in advance.

Miss Radhika, the same thing happened in my previous company. We moved the employees to the sister concern by giving them transfer letters, and the employee numbers remained the same as they were in the same business. I don't have any format at the moment; let me check and send it to you at the earliest.

Regards,
V.G. Praveen Kumar

Miss Radhika,

Please find attached the transfer letter format for your kind information.

Hi Radhika, both options are acceptable. You can provide a relieving letter from the dissolving company and a new joining letter from the new company. However, from the employee's perspective and considering their future career prospects, it is beneficial to migrate them to the new company with a transfer certificate. This way, their entitlements to various benefits would continue.

In most cases, disputes arise later when a fresh appointment is given, as the employee does not qualify for gratuity, which requires five years of continuous service. The previous service becomes void upon accepting the new appointment.

Hello Harpreet and Praveen,

Thank you very much for your prompt reply on the above matter. Your suggestions are definitely helping in making the documentation process very smooth. Thank you once again.