Companies Act Section 378N — Provisions in respect of officers and other employees of inter-State co-operative society
CHAPTER XXI
Commercial / Corporate
Summary
Sub-section (1) says that despite anything in section 378-O, all the directors of the inter-State co-operative society who were in office before the Producer Company was incorporated will continue in that office for one year from the date of transformation, and they will do so according to the provisions of this Act.
Sub-section (2) says that every officer or other employee of the inter-State co-operative society, except a director of the Board, Chairman, or Managing Director, who was employed by the society immediately before the date of transformation, will become an officer or other employee of the Producer Company from that date, but only if that person's employment is connected with the part of the society that has vested in the Producer Company. Such a person will hold their office or service on the same tenure, at the same remuneration, and on the same terms and conditions, with the same obligations, rights, and privileges regarding leave, leave travel concession, welfare schemes, medical benefits, insurance, provident fund, other funds, retirement, voluntary retirement, gratuity, and other benefits, exactly as they would have had under the old society if its undertaking had not vested in the Producer Company, and they will continue in this way as an officer or employee of the Producer Company.
Sub-section (3) says that if an officer or other employee of the inter-State co-operative society chooses under sub-section (2) not to be in the employment or service of the Producer Company, that officer or employee will be considered to have resigned.
Sub-section (4) says that despite anything in the Industrial Disputes Act, 1947, or in any other law in force, the transfer of an officer's or other employee's services from the inter-State co-operative society to the Producer Company will not give that officer or employee any right to compensation under this Act or under any other law, and no such claim will be entertained by any court, tribunal, or other authority.
Sub-section (5) says that officers and other employees who retired from the service of the inter-State co-operative society before the date of transformation and are entitled to any benefits, rights, or privileges will receive the same benefits, rights, or privileges from the Producer Company.
Sub-section (6) says that the trusts of the provident fund or gratuity fund of the inter-State co-operative society, and any other bodies created for the welfare of officers or employees, will continue to perform their functions in the Producer Company in the same way they did in the inter-State co-operative society, and any tax exemption granted to the provident fund or gratuity fund will continue to apply to the Producer Company.
Sub-section (7) says that despite anything in this Act, in any other law in force, or in the regulations of the inter-State co-operative society, no director of the Board, Chairman, Managing Director, or any other person entitled to manage the whole or a substantial part of the business and affairs of the inter-State co-operative society will be entitled to any compensation from the society or the Producer Company for the loss of office or for the premature termination of any management contract they had with the society.
Official Text
(1) Notwithstanding anything contained in section 378-O, all the directors in the inter-State co-operative society before the incorporation of the Producer Company shall continue in office for a period of one year from the date of transformation and in accordance with the provisions of this Act.
(2) Every officer or other employee of the inter-State co-operative society (except a director of the Board, Chairman or Managing Director) serving in its employment immediately before the date of transformation shall, in so far as such officer or other employee is employed in connection with the inter-State co-operative society which has vested in the Producer Company by virtue of this Act, become, as from the date of transformation, an officer or, as the case may be, other employee of the Producer Company and shall hold his office or service therein by the same tenure, at the same remuneration, upon the same terms and conditions, with the same obligations and with the same rights and privileges as to leave, leave travel concession, welfare scheme, medical benefit scheme, insurance, provident fund, other funds, retirement, voluntary retirement, gratuity and other benefits as he would have held under the erstwhile inter-State co-operative society if its undertaking had not vested in the Producer Company and shall continue to do so as an officer or, as the case may be, other employee of the Producer Company.
(3) Where an officer or other employee of the inter-State co-operative society opts under sub-section (2) not to be in employment or service of the Producer Company, such officer or other employee shall be deemed to have resigned.
(4) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947) or in any other law for the time being in force, the transfer of the services of any officer or other employee of the inter-State co-operative society to the Producer Company shall not entitle such officer or other employee to any compensation under this Act or under any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority.
(5) The officers and other employees who have retired before the date of transformation from the service of the inter-State co-operative society and are entitled to any benefits, rights or privileges, shall be entitled to receive the same benefits, rights or privileges from the Producer Company.
(6) The trusts of the provident fund or the gratuity fund of the inter-State co-operative society and any other bodies created for the welfare of officers or employees shall continue to discharge functions in the Producer Company as was being done hitherto in the inter-State co-operative society and any tax exemption granted to the provident fund or the gratuity fund would continue to be applied to the Producer Company.
(7) Notwithstanding anything contained in this Act or in any other law for the time being in force or in the regulations of the inter-State co-operative society, no director of the Board, Chairman, Managing Director or any other person entitled to manage the whole or substantial part of the business and affairs of the inter-State co-operative society shall be entitled to any compensation against the inter-State co-operative society or the Producer Company for the loss of office or for the premature termination of any contract of management entered into by him with the inter-State co-operative society. PART III MANAGEMENT OF PRODUCER COMPANY 378-O. Number of directors.—Every Producer Company shall have at least five and not more than fifteen directors:
Provided that in the case of an inter-State co-operative society incorporated as a Producer Company, such company may have more than fifteen directors for a period of one year from the date of its incorporation as a Producer Company.