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

Meena was an employee of the existing Securities and Exchange Board when the statutory Board was established. She did nothing and continued to work. She was later absorbed in the Board's regular service. Which statement is correct under the Act?

Meena continues on the same tenure and terms as before, since the default is continuation unless an employee opts out within six months. Absorption into regular service does not entitle her to compensation under the Industrial Disputes Act, 1947 or any other law.

  1. AShe holds office on the same tenure and terms, and absorption gives no compensation claim under the Industrial Disputes Act, 1947 or other lawCorrect
  2. BShe must be given retrenchment compensation under the Industrial Disputes Act, 1947 on absorption
  3. CHer service terms are reset to the new Board's terms from the date of establishment
  4. DShe ceases to be an employee unless she opts in within six months

Explanation

Section 10(1)(g) keeps the same tenure and terms of service for employees, who continue unless they opt out within six months. Section 10(2) says absorption into regular service gives no compensation under the Industrial Disputes Act or other law. The opt-in option reverses the rule: the opt-out is what takes effect only if exercised.

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