Separate entity for support team
Arun
(Querist) 21 January 2015
This query is : Resolved
Dear Experts,
Our company has a team of 20 persons to Support the Business ( IT, ADMIN, HR, Finance). Our Company is taken over by other company recently.( Not the company only the staff and business)
Most of employees are working here more for than 8 years. They haven't settled our Gratuity yet.
Now they want to start a new company with new directors and support team will come under that company and as if the support is outsourced.
Kindly clarify at this stage the support Team will be treated like Vendors in this case what happens to our settlement.
What kind of undertaking should we get for this type.
Kindly clarify.
Isaac Gabriel
(Expert) 21 January 2015
If the services are taken without any break,the settlement terms will continue notwithstanding the change in name.
Kumar Doab
(Expert) 21 January 2015
Include such terms in the settlement/takeover/agreement that you sign...........in explicit terms that Gratuity shall be paid by M/s.......of all employees taken over from M/s........
It shall be appropriate if such agreement is drafted in consultation with an able labor Law Consultant/Service matters lawyer/Law firm........
If settlement on your terms fail obtain FnF wages,Gratuity,PF ,Bonus,etc from previous company , join any other establishment and be happy......
If past company becomes defunct and new company does not have monies to pay then even in case of liquidation what would you get?
Assess all pros and cons...
RAJU O.F.,
(Expert) 22 January 2015
The answer depends upon the service conditions in which you were employed in the former company and also the service conditions offered in the new company for which you may not have much options, other than to agree to their terms; otherwise risk of termination.
Kumar Doab
(Expert) 22 January 2015
If it is takeover then one line that your service conditions shall remain unaltered and you are taken over with full continuity of service may suffice..................however it is reiterated that all of you may show the past service conditions and new service conditions to your able labor Law Consultant/Service Matters lawyer/Law firm......before you sign....
If you have any doubt on financial health and intentions of the owners it shall be better to claim and obtain payouts from current employer.........
There are threads that indicate after the takeover the new employer raised its hands , claimed there are no funds to pay and expressed inability to pay.........
Some states have issued notification on Mandatory Insurance for Gratuity as per payment of Gratuity Act...........you may check if the company (past) has obtained such mandatory insurance say from LIC.......and P&S section of LIC can confirm if new company can continue in the same policy........or on receiving intimation of closure........LIC may disburse funds of Gratuity........
As far as other matters are concerned e.g. payment of monthly wages,leave encashment,bonus,PF,ESIC.......reimbursements,Medical Insurance,Mediclaim,LTA...etc the past company can disburse it to all employees by its sweet will on last day ......and it can be mentioned in settlement .........that balance and in future it shall be paid by M/s .......
It is reiterated that your lawyer should examine everything and you should proceed under expert advise of your lawyer...
Arun
(Querist) 22 January 2015
Thank You so much Experts for your Advice.
