The States Reorganisation Act,1956
Section 111. Special provision relating to retrenchment compensation in certain cases
Where on account of the reorganisation of the States under this Act, any body corporate constituted under a Central Act, State Act or Provincial Act, any co-operative society registered under any law relating to co-operative societies or any commercial or industrial undertaking of an existing State, is reconstituted or reorganised in any manner whatsoever or is amalgamated with any other body corporate or undertaking, or is dissolved, and in consequence of such reconstitution, reorganisation, amalgamation or dissolution, any workman employed by such body corporate or in any such undertaking is transferred to, or re-employed by, any other body corporate or undertaking, then, notwithstanding anything contained in section 25F of the Industrial Disputes Act,1947 (1 of 1947), such transfer or re-employment shall not entitled him to any compensation under that section:
(a) The terms and conditions of service applicable to the workman after such transfer or re-employment are not less favourable to the workman than those applicable to him immediately before the transfer or re-employment; and
(b) The employer in relation to the body corporate or the undertaking where the workman is transferred or re-employed, is by agreement or otherwise legally liable to pay to the workman, in the event of his retrenchment, compensation under section 25F of the Industrial Disputes Act,1947, on the basis that his service has been continuous and has not been interrupted by the transfer or re-employment.