What is the procedure for transferring a few employees from one company to another branch company, including statutory? Both the directors and the business are the same. It's just a company name change and statutory. Please suggest the process legally, too.
From India, New Delhi
From India, New Delhi
Dear Hema Latha,
If the company is different, then why not send the employees on deputation to another company? Let them remain on the rolls of your company. You may continue to pay for social security (like PF, ESI, etc.) as per the attendance. However, your company may raise the debit note to the other company to recover the expenses incurred due to the deputation.
As far as the local expenses are concerned, the employees may ask for the reimbursement of them from the deputed company. They need not send the bills to your company.
I am recommending the above solution because if the employees are transferred to the new company, then they will have to resign from the existing company and the new company will have to issue a fresh appointment letter. This will create unnecessary breaks in the employees' careers.
While deputing the employees to a new company, issue a proper letter to the employees on company letterhead. Clearly state the procedure for paying their salaries and who will clear their reimbursement claims. Additionally, you can mention about authority of the new company to handle the matters of discipline, performance appraisal, promotion, etc.
This is my opinion. Other senior members may provide their opinions as well.
Thanks,
Dinesh Divekar
From India, Bangalore
7883If the company is different, then why not send the employees on deputation to another company? Let them remain on the rolls of your company. You may continue to pay for social security (like PF, ESI, etc.) as per the attendance. However, your company may raise the debit note to the other company to recover the expenses incurred due to the deputation.
As far as the local expenses are concerned, the employees may ask for the reimbursement of them from the deputed company. They need not send the bills to your company.
I am recommending the above solution because if the employees are transferred to the new company, then they will have to resign from the existing company and the new company will have to issue a fresh appointment letter. This will create unnecessary breaks in the employees' careers.
While deputing the employees to a new company, issue a proper letter to the employees on company letterhead. Clearly state the procedure for paying their salaries and who will clear their reimbursement claims. Additionally, you can mention about authority of the new company to handle the matters of discipline, performance appraisal, promotion, etc.
This is my opinion. Other senior members may provide their opinions as well.
Thanks,
Dinesh Divekar
From India, Bangalore
Yes, Mr.Dinesh Divekar's observations and his suggestions are fine in the circumstances explained by Ms.Hema-Latha. It's obvious, for all purposes they are two different entities (you may call either as sister-companies or subsidiaries, affiliates etc., but not a branch of your company.). The change of Co's name itself suggests you are two companies. When few of your existing employees are transferred as you described, it's not to be construed as simple 'transfers, temporarily or permanently' in effect it's 'severance' of employer-employee relationship. If this is not the case, if they'll repatriated after a few months or years services in a different co./entity then it can be treated as 'deputation' and if yes, then their service condition should be amended/modified suitably giving the 'lien' or loan service rights w.r.t. 'continuity of service' and associated benefits etc to the employees involved. In any case, a properly described document duly authenticated by the appropriate authority/authorised signatory which is to be 'unconditionally accepted' by those employees should be arranged.
From India, Bangalore
From India, Bangalore
The legal procedure is existing under law for transferring employees from one company to another branch of the company.
You did not provide the details of your company I.E, whether manufacturing or service oriented, total strength of employee and it's registration. You have not tell, why do you want to transfer them. It doesn't stand legal even the directors for the both the business are the same without a common balance sheet. Further, whether the appointment letter carry the clause of transfer to other branches company across the country. In nut shell, employees can be sent on deputation by providing monetary loss.
From India, Mumbai
You did not provide the details of your company I.E, whether manufacturing or service oriented, total strength of employee and it's registration. You have not tell, why do you want to transfer them. It doesn't stand legal even the directors for the both the business are the same without a common balance sheet. Further, whether the appointment letter carry the clause of transfer to other branches company across the country. In nut shell, employees can be sent on deputation by providing monetary loss.
From India, Mumbai
If suppose any employer is taking resignation and issuing fresh appointment letter to a group of employees from one company to another company within a radius of one kilometer under same controlling for all other practical purpose and legal identity is different of each other factories
The transfer is only to exempt the social security responsibility. In existing company there is no P F, ESI Bonus etc. Only to regularize a fresh employer wish to do all these exercise
Under these circumstances whether this exercise is correct on part of employer or not?
If not, what reparation employer has to face before the authority (other than the local dispute among the employer and employee
From India, New Delhi
The transfer is only to exempt the social security responsibility. In existing company there is no P F, ESI Bonus etc. Only to regularize a fresh employer wish to do all these exercise
Under these circumstances whether this exercise is correct on part of employer or not?
If not, what reparation employer has to face before the authority (other than the local dispute among the employer and employee
From India, New Delhi
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