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Industrial Relations Code, 2020 · CHAPTER IX — LAY-OFF, RETRENCHMENT AND CLOSURE

Section 73: Compensation to workers in case of transfer of establishment

Reviewed by Finin2min Editorial Desk · Last reviewed 9 September 2026

Section 73 — Governs compensation to workers in case of transfer of establishment and the rights, duties, powers or procedure expressly stated in this section. Key operative text: 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…

Full official textSource checked: 20 August 20260 direct Central Rule link(s)

Current-law status

All provisions were brought into force from 21 November 2025 under S.O. 5320(E); use the current India Code consolidation because the Code also reflects the 2026 amendment/transition framework.

Primary sources

Provision / India Code ↗ · Official Act PDF ↗ · 2026 Central Rules ↗

2-minute answer

Section 73: Compensation to workers in case of transfer of establishment should be read as an operative legal provision, not just a heading. Use the statutory text, effective-date/amendment status, connected rules/forms and the factual checklist below before applying it.

Commencement status: The Industrial Relations Code, 2020 is no longer merely prospective: the Central Government implemented all four Labour Codes with effect from 21 November 2025. Section 73 must therefore be read as an operative transfer-of-establishment compensation provision from that commencement date, subject to the Code and applicable rules.

What this page answers

Finin2min analysis — what the section actually does
Operative clauses
Provisos, explanations & qualifications
Thresholds and timelines in the text
Actors expressly appearing in the text

Practical checklist

Read the operative text and amendment/effective-date status first.
Map the provision to connected rules, forms, notifications and exceptions.
Apply the provision to the actual facts rather than relying on the section heading alone.
Keep the document trail that proves dates, amounts, approvals and compliance steps.

Official sources

Related Finin2min guidance

Reviewed for currentness and usability on the date shown on this page. Where facts, notifications or portal behaviour differ, the primary authority prevails.

Finin2min analysis — what the section actually does

Operative clauses

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…
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…

Provisos, explanations & qualifications

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…

Thresholds and timelines in the text

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…

Actors expressly appearing in the text

Employer, Worker

Full statutory text — Section 73

Official English text transcribed from the current India Code consolidation; page headers/line breaks are normalised for web reading. The Gazette/India Code PDF remains authoritative for typography, amendment footnotes and schedules.

73. 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 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.

How to apply this provision

Primary statutory test — 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…
Additional operative limb — 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;
Qualification / exception to test — 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…
Numerical or timing control — 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…
Evidence file — retain facts and records proving the role/status of: Employer, Worker.

Why this is section-specific: the operative-clause, exception, threshold and cross-reference panels above are extracted from Section 73 itself rather than a generic “trigger/control/evidence” template.

Rules, forms and cross-references

Direct 2026 Central Rule mapping

None expressly mapped in the current concordance.

Forms mapped

No prescribed form is directly mapped in the current concordance.

Other sections cited in this text

Section 70

Related Labour Hub resources

Model Standing Orders, 2026 Labour litigation

A direct concordance is not exhaustive. Central/State jurisdiction, schemes, authority appointments, saved instruments and later notifications may change the practical route without changing the section wording.

Worked example

Suppose an industrial establishment reaches a step governed by compensation to workers in case of transfer of establishment. HR/IR should create a dated file showing coverage, the competent authority/union status, required notice or application, service proof and the result. One operative text point to test is: “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 con” Also test the express qualification/proviso before concluding the result.

Illustration only; it is not statutory text or a substitute for applying the actual facts, jurisdiction, current rule/scheme and official instrument.

Q&A — Section 73

What does Section 73 of the Industrial Relations Code cover?

What is the main legal requirement or power in Section 73?

The first operative clause identified from the official text is: “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…” Read it with the remaining subsections and any proviso below.

Does Section 73 contain a proviso or explanation?

Yes. A qualification extracted from the official text is: “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…”

What time limit, percentage or amount appears in Section 73?

The provision contains this numerical/time expression: “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…” Apply it only in the clause and context in which it appears.

Which 2026 Central Rules are linked to Section 73?

No direct Central Rule is recorded in the current concordance. That does not exclude a relevant scheme, notification, State rule or enabling provision.

Is Section 73 currently operative?

All provisions were brought into force from 21 November 2025 under S.O. 5320(E); use the current India Code consolidation because the Code also reflects the 2026 amendment/transition framework.

Source & verification trail

Act: Industrial Relations Code, 2020 — official India Code PDF ↗

Central Rules: Industrial Relations (Central) Rules, 2026 — G.S.R. 342(E), 8 May 2026 ↗

Official library: Ministry of Labour & Employment — Labour Codes ↗

Source check: 20 August 2026. Individual professional interpretation should be re-reviewed when the section, rules, notification, scheme, State overlay or controlling judgment changes.

Reliance note: This page is an educational legal-reference layer. Verify the current official text, the applicable Central/State rules, notifications, schemes and judicial decisions before acting on a live matter.