Dear Seniors,
Our Company is planning to transfer operations of our factory to another Company. On roll Workers who are working at present with us will also be transferred to a new company. We are neither selling nor merging our company with the new company. Now my query is does this transfer of management will come under Section 25FF of the Industrial Dispute Act, 1947 and also want to know the interpretation of Transfer of Undertaking as per Section 25FF of the Industrial Dispute Act, 1947.
Request for your advice on the same.
Thank you in advance.
Regards,
Tonmoy Dutta
From India, Bengaluru
Our Company is planning to transfer operations of our factory to another Company. On roll Workers who are working at present with us will also be transferred to a new company. We are neither selling nor merging our company with the new company. Now my query is does this transfer of management will come under Section 25FF of the Industrial Dispute Act, 1947 and also want to know the interpretation of Transfer of Undertaking as per Section 25FF of the Industrial Dispute Act, 1947.
Request for your advice on the same.
Thank you in advance.
Regards,
Tonmoy Dutta
From India, Bengaluru
Dear Tonmoy Dutta,
This does fall under Section 25FF of the Industrial Dispute Act, 1947. Section 25FF pertains to the transfer of undertaking, which includes situations like this where the management changes hands but the company itself isn't sold or merged. This section outlines the rights and protections of employees during such transfers, ensuring their continuity of employment and safeguarding their terms and conditions of service. If you have any further questions or need clarification, please feel free to ask.
From India, Mumbai
20This does fall under Section 25FF of the Industrial Dispute Act, 1947. Section 25FF pertains to the transfer of undertaking, which includes situations like this where the management changes hands but the company itself isn't sold or merged. This section outlines the rights and protections of employees during such transfers, ensuring their continuity of employment and safeguarding their terms and conditions of service. If you have any further questions or need clarification, please feel free to ask.
From India, Mumbai
How are you going to transfer your employees to the new company? They should either resign or you should terminate them. If they resign and join the new company, then neither 25F, 25Ff nor 25FFF will be applicable and you can later on close down the establishment easily. The employees who have completed five years of service would be paid gratuity as per Payment of Gratuity Act. They will continue with their PF with a new PF id generated at the new company where they join.
If the employees think that they should get protection of salary and service conditions including the length of service, then they will not resign. Then you will have to make some settlement (preferably a tri partite settlement involving the new employer also) and decide on the part of service and payment of gratuity by the new company considering their dates of joining at the present company as the date of joining with the new company.
In the absence of such a settlement, the present employer will have to terminate the employees paying the retrenchment compensation and following section 25F of the ID Act. If this is the case there is no need to form a new company nor is required that a settlement is made among the employees and the owners of the two companies. These are the various possibilities available to you. Without a new company with new registration number in the picture, however, you cannot do anything.
From India, Kannur
If the employees think that they should get protection of salary and service conditions including the length of service, then they will not resign. Then you will have to make some settlement (preferably a tri partite settlement involving the new employer also) and decide on the part of service and payment of gratuity by the new company considering their dates of joining at the present company as the date of joining with the new company.
In the absence of such a settlement, the present employer will have to terminate the employees paying the retrenchment compensation and following section 25F of the ID Act. If this is the case there is no need to form a new company nor is required that a settlement is made among the employees and the owners of the two companies. These are the various possibilities available to you. Without a new company with new registration number in the picture, however, you cannot do anything.
From India, Kannur
As my understanding goes in term of your posting attracts "closure" of an establishment. This it comes under Section 2(cc) of the I.D. Act.
It means the permanent closing down of the factory, remains place of employment.
The management should retrench all and appoint afresh as many wants to relocate to new establishment.
If, they don't do now a lot of problem would arise in terms of tenure of service and payment of Gratuity while doing the F&F settlement.
From India, Mumbai
It means the permanent closing down of the factory, remains place of employment.
The management should retrench all and appoint afresh as many wants to relocate to new establishment.
If, they don't do now a lot of problem would arise in terms of tenure of service and payment of Gratuity while doing the F&F settlement.
From India, Mumbai
Thank You Prabhat, Madhu & Raghunath Sir for your valuable inputs.
Prabhat Sir,
We are not closing down our factory but we are transferring our operations related work like manufacturing and maintenance of factory to another company and we are also transferring our on roll workmen to that company.
My query is what is the process and how can we transfer our workmen smoothly.
Thanks & Regards
Tonmoy Dutta
From India, Bengaluru
Prabhat Sir,
We are not closing down our factory but we are transferring our operations related work like manufacturing and maintenance of factory to another company and we are also transferring our on roll workmen to that company.
My query is what is the process and how can we transfer our workmen smoothly.
Thanks & Regards
Tonmoy Dutta
From India, Bengaluru
That means your company will exist but no manufacturing activities will take place for the time being. At the same time, you will transfer your employees to another company where they will work, earn salary and once your company becomes operational they will come back and resume their service. If this is the cade, there can be different arrangements, like, declaring lay off in your present organisation and providing the employees alternative work by asking the employees to work in the other company. But law stipulates some restrictions like the other company should be within a radius of five miles, the period of lay off shall be 45 days etc. If the travel cost is reimbursed, the same can be taken care of. But if the company declaring lay off has 100 employees, then approval from the authorities under the ID Act should be taken. Obviously, the reason for lay off should be genuine and as per the provisions of the Act.
Now, if you do not want to declare lay off, but want to temporarily close down the unit, then you can depute the employees to the other company for a certain period. For this, there is no need to comply with any legal formalities but you can do so after taking the employees in to confidence. This can be achieved by offering deputation allowance which shall compensate the travel and other expenses at the other plant. Deputation being a temporary arrangement, they should be called back once you start operations. If you do not want them to come back, then the only solution is to retrench the employees from the last employee to the first employee in turn and paying whatever compensation is payable as per section 25F or 25N.
From India, Kannur
Now, if you do not want to declare lay off, but want to temporarily close down the unit, then you can depute the employees to the other company for a certain period. For this, there is no need to comply with any legal formalities but you can do so after taking the employees in to confidence. This can be achieved by offering deputation allowance which shall compensate the travel and other expenses at the other plant. Deputation being a temporary arrangement, they should be called back once you start operations. If you do not want them to come back, then the only solution is to retrench the employees from the last employee to the first employee in turn and paying whatever compensation is payable as per section 25F or 25N.
From India, Kannur
Mr Tanmay,
You mentioned in your post that employees shall be transferred to another the company. How is that possible? You can send them on deputation. In reality they are absorbing in another company, may be your subsidiary or sister concern. It is illegal, if the new company is not featured in the company's balance sheet. It is your prudence to do as considered best for the concern.
From India, Mumbai
You mentioned in your post that employees shall be transferred to another the company. How is that possible? You can send them on deputation. In reality they are absorbing in another company, may be your subsidiary or sister concern. It is illegal, if the new company is not featured in the company's balance sheet. It is your prudence to do as considered best for the concern.
From India, Mumbai
Madhu Sir,
We are outsourcing our management of operations and manufacturing to another company.
We have around 100 on - roll workmen on our company's pay roll and we want to transfer on - roll workmen to outsourced company.
I want to know the process and procedure to transfer our on - roll workmen to the outsourced company.
Thanks & Regards,
Tonmoy Dutta
From India, Bengaluru
We are outsourcing our management of operations and manufacturing to another company.
We have around 100 on - roll workmen on our company's pay roll and we want to transfer on - roll workmen to outsourced company.
I want to know the process and procedure to transfer our on - roll workmen to the outsourced company.
Thanks & Regards,
Tonmoy Dutta
From India, Bengaluru
The organization is not closing rather transferring the operations and maintenance activities to some other organization along the transfer of manpower. It can be done in different ways. If the employees resign and join to new organization , then the service has been interrupted by such transfer and SEC-25FF will be applicable. If the transfer is uninterrupted , the conditions of service applicable is not less favorable than existing and in case of retrenchment the compensation will be paid considering uninterrupted service, then Sec-25 FF will not be applicable.
In the later case the three parties present employer, employee and new employer will agree by agreement / exchange of letter that under the new employer the service condition will be as good as it is present - salary, perks etc as well as gratuity to be paid from the date of joining of 1st employer.
In my career I have applied later case for one requisition in 2000 and it is smoothly operating.
The business agreement between two employers must be crystal clear about the above terms and conditions.
S K Bandyopadhyay ( Howrah, WB)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
www.usdhrs.in
From India, New Delhi
In the later case the three parties present employer, employee and new employer will agree by agreement / exchange of letter that under the new employer the service condition will be as good as it is present - salary, perks etc as well as gratuity to be paid from the date of joining of 1st employer.
In my career I have applied later case for one requisition in 2000 and it is smoothly operating.
The business agreement between two employers must be crystal clear about the above terms and conditions.
S K Bandyopadhyay ( Howrah, WB)
CEO-USD HR Solutions
+91 98310 81531
skb@usdhrs.in
www.usdhrs.in
From India, New Delhi
Tonmoy Dutta,
Outsourcing the manufacturing operations to another company is okay but you cannot put your on roll employees under an outsider's pay roll. This is legally not possible unless the employees resign and join the other company or you initiate a closure and retrenchment. On the other hand, if the Union/ the employees decide to resign and join the other company, the process would be less complicated. In this case, you will have to offer gratuity for their service with your company. Otherwise, you have to negotiate with the other company and take a call on their service.
From India, Kannur
Outsourcing the manufacturing operations to another company is okay but you cannot put your on roll employees under an outsider's pay roll. This is legally not possible unless the employees resign and join the other company or you initiate a closure and retrenchment. On the other hand, if the Union/ the employees decide to resign and join the other company, the process would be less complicated. In this case, you will have to offer gratuity for their service with your company. Otherwise, you have to negotiate with the other company and take a call on their service.
From India, Kannur
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