Section 73 of The Industrial Relations Code, 2020
Where the ownership or management of an establishment is transferred, whether by agreement or by operation of law, from the employer in relation to that establishment to a new employer, every worker who has been in continuous service for not less than one year in that establishment immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of section 70 as if the worker had been retrenched: Provided that nothing in this section shall apply to a worker in any case where there has been a change of employers by reason of the transfer, if---
- (a)the service of the worker has not been interrupted by such transfer;
- (b)the terms and conditions of service applicable to the worker after such transfer are not in any way less favourable to the worker than those applicable to them immediately before the transfer; and
- (c)the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the worker, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.
Summary
- When a business changes owners or management, workers with at least one year of service are usually entitled to notice and pay as if they were being fired.
- However, the worker does NOT get this pay if three specific conditions are met.
Practical examples
FAQ
1. I still have my job after the company was sold. Do I get a payout?
Usually no, as long as your pay stays the same and your total years of service are still counted by the new boss.
2. What if the new boss wants to cut my pay?
If the terms are "less favourable," you are entitled to notice and compensation from the old employer under Section 70.
Test yourself
Q1.Under Section 73 of The Industrial Relations Code, 2020, if a business transfer occurs and the new owner refuses to recognize the worker's previous years of service for future compensation, what must happen?
Q2.Section 73 of The Industrial Relations Code, 2020, states that a worker with how much service is entitled to protections during a transfer?
Q3.Under Section 73 of The Industrial Relations Code, 2020, if a worker's wages are reduced by the new owner during a transfer, are they entitled to Section 70 compensation?
Q4.According to Section 73 of The Industrial Relations Code, 2020, which other section's rules define the amount of compensation a worker gets if the transfer conditions are not met?
Q5.Under Section 73 of The Industrial Relations Code, 2020, if the new employer agrees to keep all terms the same and count previous service, but the worker is forced to take a two-week break between the old and new job, what happens?