Legal Concerns: Can We Make Employees Move to a New Company Against Their Will?

Hi Seniors, my company is outsourcing the optical business to an organization that is also willing to absorb the employees currently running the optical business in my organization. The employees are not willing to move to the new organization but are willing to work in any other department. However, management has decided to move them to the new organization. Are there any legal implications if we force employees to join the new organization?

The new organization is willing to hire them at their current salary and follow all the policies as we do.

I request advice.

Thanks,
Harish Kumar (AM - HR)

Dear Harish,

Your company has outsourced a certain section of the business. There could be business merits while doing so; nevertheless, please remember that employees are your assets, and their forceful transfer to the outsourced company could generate resentment. This, in turn, could reduce business productivity itself. Therefore, proceed cautiously on this matter.

A possible solution to this problem could be to inform the employees that even though they are required to work in the outsourced company, their service in your company will be considered for the computation of gratuity upon leaving employment. See if this eases their concerns. However, in such a scenario, their new employer must provide them with a letter on the company letterhead accepting the liability for the gratuity.

If the employees still do not accept your proposal, another solution could be to retain them on the payroll of your company but assign them to work at the outsourced company. Under these circumstances, they will be under the administration of that company, but their salary will be processed through your company.

Thank you,
Dinesh Divekar

You are reminding us of the famous lines from "The Godfather," with Don Corleone saying, "I'm gonna make him an offer he can't refuse," perhaps the best movie quote in history. It appears you are trying to sell the targeted employees on the idea of shifting to the transferee organization, but is there a matching effort from the new organization to entice the target employees? Unless both efforts go hand in hand, the results may not be as desired. The options available to you have been outlined by Dinesh Divekar Sir. In addition, the new company can consider offering incentives like a salary increment or attractive financial benefits to the optees.

Worst case scenario, you may have to patiently explain that there is no place elsewhere for them within the organization. They may feel there is some room for adjustment in your setup, which you will have to categorically deny.