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CS Executive · Capital Market and Securities Laws · Securities and Exchange Board of India

An employee of the existing Securities and Exchange Board is absorbed into the regular service of the statutory Board and later claims retrenchment compensation under the Industrial Disputes Act, 1947 on account of the absorption. What is the position under the SEBI Act, 1992?

He is not entitled to any compensation. The SEBI Act overrides the Industrial Disputes Act and other laws, providing that absorption of an employee into the Board's regular service gives no right to compensation and that no court or tribunal may entertain such a claim.

  1. AHe is entitled to compensation, as the old employer ceased to exist
  2. BHe is entitled to compensation only if he served over five years
  3. CHe may claim compensation only before a labour court
  4. DHe is not entitled to any compensation, and no such claim is entertainedCorrect

Explanation

Section 10(2) states that, notwithstanding the Industrial Disputes Act, 1947 or any other law, absorption of an employee into the Board's regular service does not entitle him to compensation, and no such claim shall be entertained by any court or tribunal. Length of service or forum does not change this.

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