Sections 391 to 394 of the Companies Act, 1956 deal with schemes related to corporate reorganizations. As approval of a majority of a company’s creditors and members is a precondition for obtaining court sanction for any scheme under the Companies Act, both members and creditors have a stake in corporate mergers. However, the Act does not envisage any role for employees.
Senior partner
Titus & Co
The Industrial Disputes Act, 1947 (IDA) contains certain important provisions in this regard.
Section 25FF provides that in the case of transfer of ownership or management, every workman – which includes workers but not management – who has been in continuous employment for more than a year, is entitled to benefits and compensation as if he has been retrenched.
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Diljeet Titus is a senior partner at Titus & Co, Advocates and may be contacted at: dtitus@titus-india.com. Niranjan Raj is an associate at Titus & Co, Advocates and may be contacted at nirajanraj@titus-india.com
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