There are two firms owned by the same employer. One is a consulting firm, and the other one is a training and certification institute. If an employee has been working for the parent firm as a consultant for many years, and the employer needs the same employee to be part of the sister firm for the position of trainer, what documents should be provided by the employer to that employee? Should a separate offer letter be provided that includes the CTC breakup? Should the employer deposit the salary into the respective companies' bank account?
I need help with a legal documentation checklist.
From India, Bengaluru
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1I need help with a legal documentation checklist.
From India, Bengaluru
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What are your intentions you wants to check out of this queries? What are the things you want to find out of the information?
From India, Pune
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From India, Pune
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Sir, it is just a deputation as per your words. If you want to send him to another company, ensure all formalities are completed as if he were a person retiring and issue the formalities of appointment in the new company. He will lose seniority in the past company and become a fresher in the new company.
Everything depends on the tricky idea behind this proposal. The parent company does not want to retain the services of the gentleman, so it has come up with the idea for a new separate Administrative Officer, etc.
Generally, what will you do to send an employee to work for some time in a company in a foreign country? Issue a deputation order, keeping that employee as part of your company, sponsoring the work on a contract basis. Issue the deputation order and follow the usual procedures, please.
From India, Nellore
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Everything depends on the tricky idea behind this proposal. The parent company does not want to retain the services of the gentleman, so it has come up with the idea for a new separate Administrative Officer, etc.
Generally, what will you do to send an employee to work for some time in a company in a foreign country? Issue a deputation order, keeping that employee as part of your company, sponsoring the work on a contract basis. Issue the deputation order and follow the usual procedures, please.
From India, Nellore
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Dear Vivek,
Every firm, irrespective of its ownership, is a separate legal entity. Therefore, the usage of nomenclature like group company, parent company, or sister concern is colloquial only and has no legal validity. Inter-company/firm transfer of employees would be valid only in the case of explicit agreement between the firms and the willingness of the employees concerned.
Therefore, if the employee is willing, obtain his resignation from the Consulting Firm and pay him all the terminal benefits for the service he has rendered so far. Then, appoint him afresh in the Training and Certification Institute as a Trainer. This approach would protect the interests of the employee and the firms concerned as well.
From India, Salem
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Every firm, irrespective of its ownership, is a separate legal entity. Therefore, the usage of nomenclature like group company, parent company, or sister concern is colloquial only and has no legal validity. Inter-company/firm transfer of employees would be valid only in the case of explicit agreement between the firms and the willingness of the employees concerned.
Therefore, if the employee is willing, obtain his resignation from the Consulting Firm and pay him all the terminal benefits for the service he has rendered so far. Then, appoint him afresh in the Training and Certification Institute as a Trainer. This approach would protect the interests of the employee and the firms concerned as well.
From India, Salem
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Dear Vivek,
If the appointment letter of the concerned employee contains a clause stating that his services are transferable to any of the sister companies, then you only have to issue a transfer letter with either the existing service conditions or revised conditions. In such a transfer, continuity of service is granted, and no reduction in salary or benefits should be resorted to. The new job description, job title, and revised terms should be clearly laid down.
If there is no such transfer clause, obtain his resignation and make a full and final settlement. After this process, a fresh appointment letter on mutually agreed terms may be issued on the rolls of the sister company.
Regards,
Vinayak Nagarkar
HR Consultant
From India, Mumbai
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If the appointment letter of the concerned employee contains a clause stating that his services are transferable to any of the sister companies, then you only have to issue a transfer letter with either the existing service conditions or revised conditions. In such a transfer, continuity of service is granted, and no reduction in salary or benefits should be resorted to. The new job description, job title, and revised terms should be clearly laid down.
If there is no such transfer clause, obtain his resignation and make a full and final settlement. After this process, a fresh appointment letter on mutually agreed terms may be issued on the rolls of the sister company.
Regards,
Vinayak Nagarkar
HR Consultant
From India, Mumbai
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Dear all,
I am extremely grateful for your time. I also have some additional clarifications. Both companies are keeping the employment status active. Mr. X is an employee of both entities. The Director is not depositing the salary through the bank in either case. He is playing a safe game in terms of evading IT & TDS that have to be filed. The employee strength of both companies is less than 10. Payslips are sent via mail with no reflection in the bank. The salary is 48,000 per month. From an employee's perspective, what could be the possible actions that can be taken? Please help.
Regards, Vivek
From India, Bengaluru
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I am extremely grateful for your time. I also have some additional clarifications. Both companies are keeping the employment status active. Mr. X is an employee of both entities. The Director is not depositing the salary through the bank in either case. He is playing a safe game in terms of evading IT & TDS that have to be filed. The employee strength of both companies is less than 10. Payslips are sent via mail with no reflection in the bank. The salary is 48,000 per month. From an employee's perspective, what could be the possible actions that can be taken? Please help.
Regards, Vivek
From India, Bengaluru
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Dear Vivek,
It is not known whether you are an independent HR Consultant or a paid employee of the twin organizations mentioned. Similarly, we are also not aware of the fact of whether it is your mere academic thirst just to know or professional interest to protect someone that prompts these queries.
Whatever it may be, the first point is that this is a case of dual employment or double employment, though the two organizations are owned by the same person and it is done at his behest. Except for section 60 of the Factories Act and some of the State Shops and Establishment Acts, it is neither prohibited nor considered illegal unless one of the two employers takes objection to it. The Income Tax Law's concern would be the levy of tax on both sources of income only. As such, the question of illegality, if any, arises only from the point of income tax evasion alone.
The second and most important point is whether this is whole-heartedly accepted by the employee. Normally, such dual employment under the same employer or elsewhere would reduce the individual's efficiency in both jobs for one cannot ride on two horses simultaneously and can create a high degree of work-life imbalance.
The third point is that it amounts to the deprivation of another person's employment.
If the person is yourself, it is only for you to decide.
From India, Salem
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It is not known whether you are an independent HR Consultant or a paid employee of the twin organizations mentioned. Similarly, we are also not aware of the fact of whether it is your mere academic thirst just to know or professional interest to protect someone that prompts these queries.
Whatever it may be, the first point is that this is a case of dual employment or double employment, though the two organizations are owned by the same person and it is done at his behest. Except for section 60 of the Factories Act and some of the State Shops and Establishment Acts, it is neither prohibited nor considered illegal unless one of the two employers takes objection to it. The Income Tax Law's concern would be the levy of tax on both sources of income only. As such, the question of illegality, if any, arises only from the point of income tax evasion alone.
The second and most important point is whether this is whole-heartedly accepted by the employee. Normally, such dual employment under the same employer or elsewhere would reduce the individual's efficiency in both jobs for one cannot ride on two horses simultaneously and can create a high degree of work-life imbalance.
The third point is that it amounts to the deprivation of another person's employment.
If the person is yourself, it is only for you to decide.
From India, Salem
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(Fact Checked)-The situation you're facing is challenging, but it's essential to understand your rights clearly. Seeking legal advice is wise in this scenario. Thank you for sharing your concerns. (1 Acknowledge point)