Type:Trigger Frequency: Quarterly

Action to be taken:
Where the ownership or management of an undertaking is transferred, all workmen in the undertaking will have to be paid retrenchment compensation unless
(a) The services of the workmen have not been interrupted by the transfer
(b) The terms and conditions of service applicable to the workmen are not less favourable than those immediately before the transfer
(c) the employer to whom the undertaking is transferred is, under the terms of the transfer, legally liable to pay the workmen on their retrenchment, compensation as if their service was continuous and not interrupted by the transfer

Audit Requirement:
Where an undertaking is transferred, have workmen been paid retrenchment compensation if the conditions specified in Rule 6-O are not satisfied ?

Supporting Documents:
Written Confirmation of Compliance

Related Triggers:
Temporary Closure or Reopening Of An Establishment
Transfer Of Establishment/Undertaking

Related Keywords:
Dispute, Industrial Dispute
Remuneration/Wages/Compensation
Retrenchment
Transfer of Undertaking

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Related Sections:
Industrial Disputes Act, 1947
Chapter:Lay-off and Retrenchment| 25-FF:Compensation to workmen in case of transfer of undertakings:
Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of Section 25-F, as if the workman had been retrenched :

Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if -