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

Ms. Rao was an employee of the existing Securities and Exchange Board immediately before the statutory Board was established. She did nothing about her employment and was absorbed. Which statement is correct under Section 10?

Ms. Rao holds her office in the Board on the same tenure and terms as before, and cannot claim compensation under the Industrial Disputes Act, 1947 for being absorbed. Section 10 protects her service conditions and expressly bars such compensation claims.

  1. AShe holds office in the Board on the same tenure and terms, and cannot claim compensation under the Industrial Disputes Act, 1947 for the absorptionCorrect
  2. BShe must be re-appointed on fresh terms decided by the Board
  3. CShe can claim retrenchment compensation under the Industrial Disputes Act, 1947 because the employer changed
  4. DShe ceases to be an employee after six months unless the Board confirms her

Explanation

Section 10(1)(g) says the employee holds office in the Board by the same tenure and on the same terms of service, unless she opts out within six months. Section 10(2) says absorption into regular service does not entitle her to compensation under the Industrial Disputes Act or other law. Retrenchment compensation is therefore wrong, and no re-appointment or confirmation is required.

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