Amruthkumar (IT engineer) 04 August 2011

Employer closing company and settlement

My wife was working in a small IT company (about 20 people). One day employer suddenly announced that he is going to merge the company with other and fitment expercise will start from tomorrow.

his exact words in email were, "Our fitting team members shall be hired on XXXXX payroll post the fittment exercise conducted by XXXXX in next 2 days"

In few days he (old employer) told her that new company is willing to take her with reduced pay. This offer was rejected by my wife as she already secured another job meanwhile. She officially sent an email of resignation and told him that she is not willing to work for notice period. Now employer is not giving her relieving letter and giving all sort of processes reasons. Is there any legal protection available in such case?

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3 Replies

H. S. Thukral (Lawyer) 04 August 2011

Your wife ceases to be employee of earstwhile employer on change of employer. However if the employees are transferred to new undertaking on same conditions, they are considered employees of new employer. ( section 25FFF) of the ID ACt. In this case since employment conditions are altered to her prejudice she can refuse transfer. There is no need to resign. The employer is supposed to pay compensation as per law on closure of an undertaking. If she has already resigned, send a notice to employer for terminal benifits as well as relieving/experince certificate.

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Amruthkumar (IT engineer) 04 August 2011

Thanks you for reply.

Does she bound to complete the notice period?

V. VASUDEVAN (LEGAL COUNSEL) 04 August 2011

No. She can further claim compensation as per ID Act as advised. She can issue a notice to at least slience the company from the harassment on notice period.