Employees’ Rights in Case of a Transfer of Undertaking
here the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, every workman who has been in continuous service for not less than 1 year in that undertaking would be entitled to 1 month notice or payment in lieu thereof and to compensation calculated at the rate of 15 days wages for every completed year of service.
Requirements for Predecessor and Successor Parties
The requirements mentioned above relate to the obligations of the old employer (i.e. one whose business undertaking is being transferred). However, if said law does not apply to the transfer of the undertaking in question (i.e. for instance, the services of the employee are not ‘interrupted’ on account of the transfer or alternatively, employees resign and join the new employer), then the successor entity would have to ensure that the salary and benefits that the employees were entitled to under the old employer (such as provident fund, employee state insurance, gratuity) are continued to be paid.