Transitioning Payroll to a New Company: Do We Need Re-Appointment Letters for Employees?

Dear All Concerned,

Consider our company name as ABC. We have established a new company, XYZ, to market our software. Due to certain issues with ABC bank loans, we are transitioning employees' salary payroll from ABC company to XYZ company. The existing employees will continue, and the management will remain the same.

Transitioning Employee Payroll to XYZ Company

How should we include these details in the relieving letters for both companies? Is it necessary to provide re-appointment letters to employees with the new company name, or can we proceed with just the relieving letter? Your assistance on this matter is greatly appreciated.

Thank you.

Service Continuity or Fresh Appointment?

First of all, please clarify whether you are providing continuity in service or if the service in XYZ Company starts on a clean slate with no continuity. If there is a total break, employees resign from ABC Company, their full and final settlement is made, and they are relieved from service. Subsequently, they are appointed in XYZ Company, and for all intents and purposes, it is considered a fresh appointment. This can occur even if the management, physical location, and service conditions remain the same.

However, if there is continuity in service, an order could be issued indicating the date from which the employees are taken on the rolls of XYZ Company.