Change in management is very common in business. Both employer & employees get effected with it. The presentation gives reasons,responsibilities of management and rights of an employee.

1. Business Transfer, Termination or
Inability to give work - Obligation of
Employer
Deepa Rafeeque
VLegal

2. Change in Employment
DR 2

3. Protection to Employees
• In general, the employees are protected under
the provisions of following laws:
– Industrial Disputes Act
– Employees State Insurance Act
– Employees Compensation Act
– Employee Provident Funds & Misc provisions Act
– Minimum Wages Act, etc…
DR 3

4. All rights of employees are
the duties of Employer
DR 4

5. Types of Change
Change in
Employment
Transfer of
business
Termination
Inability to
give work
DR 5

6. Transfer of Business
DR 6

7. How it works….
• The transfer of business can happened by
following ways:
–sale of shares, or
–sale of assets.
–outsourcing of Business
DR 7

8. Impact on Employees
• If the transfer of business is by sale of
shares then the employees of entity will not
be impacted directly by the transaction and
will remain employed by their current local
employer and will not transfer.
DR 8

9. Consent of Employees
• If there is an agreement between
employees union & Employer regarding
service conditions, in case of sale of
business, the union is required to be
consulted.
DR 9

10. Transfer of Employees
• The transfer of employees can be
categorized into two categories:
–Automatic transfer
–Termination/Rehire
DR 10

11. Automatic Transfer
• Employees can be transferred on the same
terms and conditions of employment by way
of “employer substitution”. The new employer
to step into the shoes of the former employer
and assume all employee-related liabilities
associated with the transferring employees
and recognize all seniority accrued with the
former employer.
DR 11

12. Contd…
• The buyer is not permitted to change an
employee’s remuneration, bonus,
commission, other incentives, employee
benefit plans or fringe benefits/perquisites.
However In most jurisdictions, however, there
is an exception for pension and equity
entitlements
DR 12

13. Contd…
• In some Cases, new employer gives some
extra benefits to the employees to join
him, to retain the expertise with them…..
–E.g – leasing of Delhi & Mumbai
Airports
DR 13

14. Termination/ Rehire
• Employees must be terminated by the current
employer and formally accept a new offer of
employment with the new employer. If no
offer is made to an employee, or is accepted
by the employee, that employee remains
employed by the existing business and does
not transfer with the underlying assets and
liabilities.
DR 14

15. Termination
Nature of
Employment
Regular
Service rules
Contractual
Industrial
Disputes Act
DR 15

16. Regular Employment
• The employees are governed by service rules
of particular organisation.
• The termination of employee must be done in
terms of such governing rules.
• It should be done, following due process of
law.
• The terminal benefits e.g. PF, gratuity etc to be
paid to the employee.
DR 16

17. Contractual Employment
• The termination must be done in terms of the
provisions specified u/s 25 F on ID Act.
• The workman to be given one month's notice
in writing indicating the reasons for
retrenchment and the period of notice has
expired, or the workman has been paid in lieu
of such notice, wages for the period of the
notice.
DR 17

18. Contd…
• The workman to be paid, at the time of
retrenchment, compensation which shall be
equivalent to fifteen days average pay for
every completed year of continuous service;
• notice in the prescribed manner is served on
the appropriate Government.
DR 18

19. Inability to give work
Inability
to give
work
Lay-off
Lock-out
Closing of
undertaking
DR 19

20. Lay-off
• "lay-off" means the failure, refusal or inability
of an employer on account of shortage of coal,
power or raw materials or the accumulation of
stocks or the breakdown of machinery or
natural calamity or for any other connected
reason to give employment to a workman
whose name is borne on the muster rolls of
his industrial establishment and who has not
been retrenched.
DR 20

21. Contd…
• Whenever a workman under an employer is
laid-off, whether continuously or
intermittently, the employer shall pay for all
days during which he is so laid-off, except for
such weekly holidays as may intervene,
compensation which shall be equal to fifty per
cent of the total of the basic wages and
dearness allowance that would have been
payable to him had he not been so laid-off.
DR 21

22. Contd…
• The employer is not bound to pay
compensation to workman if:
– if he refuses to accept any alternative
employment in the same establishment from
which he has been laid-off;
– if such laying-off is due to a strike or slowing-down
of production on the part of workmen in another
part of the establishment;
– if he does not present himself for work at the
establishment at the appointed time during
normal working hours at least once a day.
DR 22

23. Lock-out
• "lock-out" means the temporary closing of a
place of employment or the suspension of
work, or the refusal by an employer to
continue to employ any number of persons
employed by him.
DR 23

24. Contd…
• No employer carrying on any public utility
service shall lock-out any of his workmen—
– without giving them notice of lock-out as
hereinafter provided, within six weeks before
locking out;
– within fourteen days of giving such notice; or
– before the expiry of the date of lock-out specified
in any such notice as aforesaid; or
– during the pendency of any conciliation
proceedings before a conciliation officer and
seven days after the conclusion of such
proceedings.
DR 24

25. Closing of Undertaking
• Where an undertaking is closed down for any
reason whatsoever, every workman be entitled to
notice and compensation in accordance with the
provisions of section 25F, as if the workman had
been retrenched;
• Provided that where the undertaking is closed
down on account of unavoidable circumstances
beyond the control of the employer, the
compensation to be paid to the workman under
clause (b) of section 25F shall not exceed his
average pay for three months.
DR 25

26. Contd…
• An undertaking which is closed down by reason
merely of—
(i) financial difficulties (including financial losses);
or
(ii) accumulation of undisposed of stocks; or
(iii) the expiry of the period of the lease or licence
granted to it; or
(iv) in a case where the undertaking is engaged in
mining operations, exhaustion of the minerals in
the area in which such operations are carried on;
– shall not be deemed to be closed down on account of
unavoidable circumstances beyond the control of the
employer.
DR 26

27. For further queries/ clarification….
Pl be in touch..
www.vlegal.in
or
9810991141
DR 27