Dear All Seniors,
Greetings of the day! I'm seeking clarification regarding the transfer of undertaking from the old owner to the new owner, where the business continues under the new owner's name but remains unchanged from the previous operation. In this context, I understand that trade union members retain the right to re-employment in the new company.
Could you please confirm this understanding and provide any relevant landmark judgments or obligations under the Industrial Disputes Act, 1947, that apply to the new owner in this scenario?
From India, Noida
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Greetings of the day! I'm seeking clarification regarding the transfer of undertaking from the old owner to the new owner, where the business continues under the new owner's name but remains unchanged from the previous operation. In this context, I understand that trade union members retain the right to re-employment in the new company.
Could you please confirm this understanding and provide any relevant landmark judgments or obligations under the Industrial Disputes Act, 1947, that apply to the new owner in this scenario?
From India, Noida
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Transfer of undertaking under Section 25FF of the Industrial Disputes Act, 1947
The transfer of undertaking should be carried out after complying with Section 25FF of the Industrial Disputes Act, 1947. Accordingly, no employee who has been in continuous service for at least one year shall be terminated without a notice of at least one month and paying compensation equal to 15 days' wages for every completed year of service. However, if the purchaser is ready to take on the employees without any change in their service conditions regarding their length of service, then no compensation is required to be given.
At the same time, if the employees are retained by the new employer, the purchaser, then there should be a bilateral undertaking among the two employers and the workers regarding their service conditions, treatment of service when there is another requirement to calculate any compensation payable on retrenchment in the future, treatment of gratuity, etc. Therefore, it is advisable that there should be proper documentation of agreements, and the process should be as per Section 25FF of the ID Act.
From India, Kannur
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4526The transfer of undertaking should be carried out after complying with Section 25FF of the Industrial Disputes Act, 1947. Accordingly, no employee who has been in continuous service for at least one year shall be terminated without a notice of at least one month and paying compensation equal to 15 days' wages for every completed year of service. However, if the purchaser is ready to take on the employees without any change in their service conditions regarding their length of service, then no compensation is required to be given.
At the same time, if the employees are retained by the new employer, the purchaser, then there should be a bilateral undertaking among the two employers and the workers regarding their service conditions, treatment of service when there is another requirement to calculate any compensation payable on retrenchment in the future, treatment of gratuity, etc. Therefore, it is advisable that there should be proper documentation of agreements, and the process should be as per Section 25FF of the ID Act.
From India, Kannur
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Industrial Disputes Amendment Act 2010.doc
INDUSTRIAL DISPUTES ACT.pdf