Partnership firm dissolved. Can ex employee ask gratuity. What rights?

In Labour & Service Law

I dissolved my partnership firm recently. We were 3 partners. We have all gone our separate ways and doing similar businesses as we were doing before. Our employees of dissolved firms have gone with one of the 3 partners in their new businesses.

However 2 of them have filed cases in labour court stating they are unemployed and claiming other benefits such as gratuity, ESI etc from dissolved firms partners. How should I proceed to tackle the issue. Do they have any rights?

Answers (1)

406 votes

As far as the workmen are concerned, they are entitled to be paid for the work done by them. The liability for such payment is on their immediate employer, irrespective of the complicated arrangements that may exist between him and the legal owner of the assets or business of firm.

The realities of this case bring out two relevant factors. Firstly, that you, as one of the partner were employing the workmen during the relevant period, in whatever capacity. Secondly, that you yourelves purported to enter into a new arrangment may be by using the name of the erstwhile firm and also purported to sign all documents as the new owner of the previous arrangment.

In the face of these facts, it is difficult to accede to the statment that despite doing all this, the liability towards workmen must be foisted only upon the legal owner of the business which is as per your version non-existent now. You may very well take defence which may not hold water. You may seek impleadment of the other partners or their firms and try to settle the matter through court annexed mediation.

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