Compensation to workers in case of transfer of establishment
Section 73 of the Industrial Relations Code, 2020 deals with compensation to workers in case of transfer of establishment. 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 befor The Act was enacted on 28 Sep 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.
Section 73, The Industrial Relations Code, 2020 (Act 35 of 2020).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Maruti Udyog LTD vs Ram Lal
Court's Decision & Legal Precedent
The re-employment right under section 25H of the Industrial Disputes Act, 1947 does not extend to workmen whose employment ended on closure of an undertaking or on its statutory transfer to a successor; sections 25FF and 25FFF give compensation only, and the deeming fiction in those provisions must be read narrowly rather than expanded by sympathy into a re-employment right.
On this section: Construes the compensation-on-transfer right this section carries: it is a money entitlement computed as on retrenchment, not a right to continuity of employment with the new employer.
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G. Durai vs Management of Wavin India LTD
Court's Decision & Legal Precedent
Re-employment under section 25H of the Industrial Disputes Act, 1947 is available to a retrenched workman as a matter of right, but the Labour Court must first decide the foundational question whether the closure relied on by the employer was bona fide; the Court set aside the orders below and remanded for that sequential consideration of sections 25FF, 25FFF and 25H.
On this section: Puts the burden on the employer to establish a genuine transfer of ownership or management before the compensation regime of this section is engaged.
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 73
What have the courts held on Section 73 of the Industrial Relations Code?
Maruti Udyog LTD vs Ram Lal is the leading judgment on this section among those set out below: Construes the compensation-on-transfer right this section carries: it is a money entitlement computed as on retrenchment, not a right to continuity of employment with the new employer. Another 1 judgment on this section is set out below, all of them from the Supreme Court.
How do I find court cases under Section 73 of the Industrial Relations Code?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Industrial Relations Code 73, section 73 Industrial Relations Code, section 73 of the Industrial Relations Code. People searching for it also type section 73 of industrial relations code. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Maruti Udyog LTD vs Ram Lal.
What should I read with Section 73 of the Industrial Relations Code, and has it changed?
Its own text turns on section 70 (Conditions precedent to retrenchment of workers), so none of them can safely be read on its own. 2 other provisions in this corpus refer back to it.
When was Section 73 of the Industrial Relations Code enacted?
Section 73 of the Industrial Relations Code, cited as Industrial Relations Code 73, was enacted on 28 Sep 2020 as Act 35 of 2020. It is in force as at the date shown on this page.
Other sections of this Act
- 2. Definitions3327 words
- 99. Power of appropriate Government to make rules1827 words
- 86. Penalties1320 words
- 30. Preparation of draft standing orders by employer and procedure for certification942 words
- 78. Prohibition of lay-off858 words
- 79. Conditions precedent to retrenchment of workers to which Chapter X applies706 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.