Feeling Stuck: Should We Resign to Join the New Company Run by the Same Directors?

Sending greetings to all seniors.

Sir, I have been working in a construction firm for the last 12 years as a Liaison Executive. I receive my salary directly into my bank account. Last year, they started another construction firm to handle slum rehabilitation projects.

Yesterday, our HR called us into her cabin and informed us that the company had mistakenly deposited cheques from the new firm into our accounts since April 2018. She instructed all of us to submit our resignations to the company, and then we would be reappointed to the new firm.

Sir, we are all feeling confused and unsure about what to do next. Both companies are family-run by a North Indian Marwari family, with the same four directors, registered office, and operating under one roof. It is worth noting that they have never paid any gratuity to previous staff who worked for more than 5 years.

I am eagerly awaiting your valuable advice.

Understanding the Implications of Resignation and Reappointment

Whose check was deposited in your salary bank account is immaterial for you. What is important for you to ensure is why this resignation, and that also for a "mistake" committed by the employer? When you say that there are different entities but under the same management team, you can smell a tricky act by the management to avoid payment of gratuity, etc. This happens wherever these kinds of family-run establishments are there.

From the legal point of view, and for the purpose of deciding the applicability of various laws like the Provident Fund Act, ESI Act, Bonus Act, Gratuity Act, Industrial Disputes Act, etc., the employees in all the concerns under the same management will be clubbed together. Therefore, there is no meaning in saying that a few are in the new company and therefore should resign from the old company and the new company will issue a new appointment order, etc.

Clarifying Provident Fund and Service Length

Please tell us under which company's member ID your PF is being deposited. If you were under the new company since April 2018, they should have remitted your PF in the new company, and you should have got a new member ID. Again, the employer or the HR should have initiated the transfer of the PF from the old one to the new one. Above all, there should be clarity on the length of service and how it is going to be treated at the time of your superannuation or resignation.

Dear B Rajesh,

Prima facie, this smells like some deception. If a cheque is wrongly issued, then you may ask for a refund of the amount or inform the bank. No stretch of imagination justifies asking for resignation.

Shailesh Parikh
99 98 97 10 65
Vadodara

Thanks to Madhu sir & Shailesh sir.

Referring to Madhu sir's reply, I have to add that for the past 12 years, the company has neither generated our PF Account nor deducted any amount for PF, ESIC, or any other perks. We just received a neat salary and bonus at Diwali without any other perks.