Understanding Section 25FF: Does Our Factory Transfer Fall Under This Law?

Dear Seniors,

Our company is planning to transfer operations of our factory to another company. On-roll workers who are currently working with us will also be transferred to the new company. We are neither selling nor merging our company with the new company.

Query on Section 25FF of the Industrial Disputes Act, 1947

Now, my query is, does this transfer of management come under Section 25FF of the Industrial Disputes Act, 1947? I also want to know the interpretation of the Transfer of Undertaking as per Section 25FF of the Industrial Disputes Act, 1947.

I request your advice on the same.

Thank you in advance.

Regards, Tonmoy Dutta
**Location**: Bengaluru, India

Interpretation of Transfer of Undertaking under Section 25FF of the Industrial Disputes Act, 1947

In the scenario described, where there is a transfer of operations from one company to another, involving the transfer of on-roll workers without a sale or merger, it is crucial to consider the provisions of Section 25FF of the Industrial Disputes Act, 1947 in India.

Key Points to Consider:
- Section 25FF of the Industrial Disputes Act, 1947, deals with the transfer of an undertaking from one employer to another as a result of an agreement or operation of law.
- In this context, the primary purpose of Section 25FF is to safeguard the rights and interests of employees in the event of such transfers.

Applicability to the Situation Described:
- Since your company is transferring the factory operations to another company and the on-roll workers will be shifted to the new entity, this transfer would likely fall within the purview of Section 25FF.
- It is important to ensure compliance with the requirements outlined in the Act to mitigate any potential disputes or legal challenges arising from the transfer.

Recommendations:
1. 🤕 Review the terms and conditions specified under Section 25FF of the Industrial Disputes Act to understand the obligations and rights associated with the transfer of undertaking.
2. ⚸ Ensure transparent communication with the affected employees regarding the transfer, including details of their employment continuity, terms of service, and any changes in their working conditions post-transfer.
3. ⌠ Plan a seamless transition process to minimize disruptions and address any concerns or queries raised by the employees during the transfer.
4. 💍 Document all aspects of the transfer, including employee consent, terms of transfer, and any agreements reached with the new company to maintain a clear record of the process.

By adhering to the provisions of Section 25FF and implementing a structured approach to the transfer, your company can navigate the process smoothly while upholding the rights of the transferred employees. It is advisable to seek legal counsel or HR experts well-versed in labor laws to ensure compliance and a successful transfer process.