Section 25FF of IDA : Section 25Ff: Compensation To Workmen In Case Of Transfer Of Undertakings

Explanation using Example

Imagine a scenario where a textile manufacturing company, 'WeaveAll Textiles', has been sold to another company, 'FabricFusion Ltd.' In this transition, Raj, who has been working at WeaveAll Textiles for three years, is concerned about his job security. According to Section 25FF of The Industrial Disputes Act, 1947, Raj is entitled to notice and compensation, similar to a retrenchment package, because he has been in continuous service for more than one year and the ownership of the company is changing hands.

However, FabricFusion Ltd. assures Raj that his employment will continue without interruption, his terms of service will not be less favorable than before, and they will honor his continuity of service in case of any future retrenchment. In this case, the provisions for compensation under Section 25FF would not apply to Raj because all the conditions provided in the act are met by the new employer, ensuring that Raj's service conditions remain secured despite the transfer of the company.