New Contractor Hired: Are There Legal Obligations to Retain Old Employees?

Dear Senior, please suggest if the principal employer has changed contractors. A new contractor has been hired to do the same work through a tender process as they have quoted a lower price for the same job. The total number of employees working under the contractor is more than 600, and they (contract workers of the old contractor) have a recognized labor union. The union is requesting to absorb the old employees with the new contractor. Is there any legal obligation to retain the old contract employees on the same terms and conditions with the new contractor?

Regards, Ashe

No; the new contractor engaged by the Principal Employer in the same work has no legal obligation to take the contract labor of the previous contractor. When the previous contractor could not provide employment to the contract labor engaged by him so far due to non-renewal of the contract, it cannot be treated as retrenchment also.