Section 22: Continuance in service of employees on transfer to a corporation

22. Continuance in service of employees on transfer to a corporation.—(1) Where the management of a managed establishment is transferred to a corporation under section 13, every whole time employee of the establishment who was employed by the establishment immediately before the date of such transfer shall, on and from the date of such transfer, become an employee of the corporation and shall hold his office therein on the same terms and conditions, including remuneration, tenure of office, rights and privileges as to pension and gratuity and other matters, as were applicable to him immediately before the date of transfer, until his employment in the corporation is terminated or his terms and conditions of service are altered by the corporation. (2) Where any employees of a managed establishment have, under the provisions of sub­section (1), become the employees of a corporation, the corporation may, for the purpose of rationalising the pay scales of such employees or for any other good and adequate reason, alter the terms and conditions of service of the employees as to their remuneration, in such manner as it thinks fit and, if the alteration is not acceptable to any employee, the corporation may terminate his employment by giving him compensation equivalent to his remuneration for three months or, if his contract of service provides for a shorter notice for termination of employment, for the period so provided. . Explanation.—The compensation payable to an employee under this sub­section shall be in addition to, and not inderogation of, any of his rights as to pension, gratuity, provident fund money or other benefit to which he may be entitled under his contract of service. (3) If any question arises as to whether any person was a whole time employee of an establishment immediately before its management was transferred to a corporation under section 13, the question shall be referred to the Federal Government whose decision shall be final. (4) The transfer of the services of any employee of an establishment to a corporation shall not, except as provided in this section, entitle any such employee to any compensation and no such claim shall be entertained by any court, tribunal or other authority.

Effective date: 1973-01-01

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