Employee Transfer - Reasons for employee transfers - Importance of employee transfers - Transfer Policy - Case Laws

A transfer is a horizontal or lateral movement of an employee from one job, section, department, shift, plant or position to another at the same or another place where his salary, status and responsibility are the same.

Yoder and others (1958) define transfer as “a lateral shift causing movement of individuals from one position to another usually without involving marked change in duties, responsibilities, skills needed or compensation”.

Transfer may be initiated either by the company or the employee. It also can be temporary or permanent.

Transfers are generally affected to build up a more satisfactory work team and to achieve the following purposes;

    1. To increase the effectiveness of the organization.

    2. To increase versatility and competence of key positions.

    3. To deal with fluctuations in work requirements.

    4. To correct incompatibilities in employee relations.

    5. To correct erroneous placement.

    6. To relieve monotony.

    7. To adjust workforce.

    8. To punish employees. (Generally in government organisations, employees who commits mistakes or malfeasance will be treated with transfer to other place where he cannot act according to his wish or misuse his job position. )

Reasons for employee transfers:

  1. To avoid favoritism and nepotism.

  2. To avoid gaining capacity of influencing and egocentrism.

  3. To avoid monotony in the work of an employee.

  4. Makes an employee accountable to his seat, so as not to find mistake by his successor.

  5. So as to avoid excess dependency on particular employee, otherwise may affect the purpose of hierarchy and lose control over subordinates.

  6. To create transparency among the employees and their work.

  7. It limits taking advantage and sole control over the seat or section.

  8. To avoid unnecessary influence on others for their own advantage.

  9. To make conversant of different seats work.

  10. To maintain healthy relationship in between all the staff members to retain harmonious environment to avoid unnecessary disputes.

Importance of employee transfers

Transfer of employees is must and essential in an organisation for the purpose of minimizing politics between employees, to ensure cordial relationship between employees, to increase transparency in work, to obviate syndicate of employees for unethical purpose and to obviate nepotism in organisation.

Employee transfers is considerable, as most essential when a position of employee is a top-level in hierarchy. Especially in the governmental organisations employees holding top-level positions are affected with frequent transfers for the reason, to obviate nepotism into increase transparency in the work. Organisations having no transfers for their employees may create their own informal groups for their common interest and their own benefit. Subsequently, this may leads to secrecy in the flow of work, eventually, no transparency in work. Employee transfers less organisation may definitely see organisational politics among employees, that which leads to fall in coordination in between employees, eventually may lead to drop in overall organisational performance.

Drawbacks from employee transfers

Inauguration point of view, transfer of employees will definitely benefit organisation and also keeps away disturbances and misunderstandings in between employees. However, there are a few drawbacks out of employee transfers that effect individuals or employees. Below listed are a few drawbacks due to employee transfers.

    • Employees who are having attachment with the organisation and their morale maybe disturbed due to transfer to some other location.

    • Family members of employee who got transferred maybe psychologically disturbed because they have to shift their entire family to new location for which it may take time to get accustomed to new place.

    • Definitely, employee transfer will financially cost to him by way of shifting of his households and furniture in transportation.

    • In case of your employees, employee transfer may lead to resignation for the reason he may not willing to leave current location if that location is his native place.

It is for the employer to transfer an employee considering the requirement - Supreme Court of India

Read judgment below

The petitioner was working as a Lecturer, requested employer for her transfer to a Post Graduate College, Noida, where she previously worked. Her representation was rejected, on which the petitioner challenged before the High Court. Employee Cannot Insist On Transfer To A Particular Place; It's For Employer To Decide

Court held that

"It is not for the employee to insist to transfer him/her and/or not to transfer him/her at a particular place. It is for the employer to transfer an employee considering the requirement".

It is for the employer to transfer an employee considering the requirement - Supreme Court of India.pdf

Section 9A of the Industrial Disputes Act, 1947 would be attracted if transfer of workmen results in change of service conditions and nature of work.- Supreme Court of India

Read Judgment Below

Caparo Engineering India Ltd. V. Ummed Singh Lodhi And Anr.| Civil Appeal Nos.5829-5830 Of 2021

It was the case on behalf of the workmen that the transfer was done malafidely with the intention to reduce the number of workmen in the Dewas factory; that the employer pressurized the workmen to resign and on refusal, the employer transferred them without any justifiable reason to Chopanki at Rajasthan, which is 900 Kms. away; such a transfer amounts to the illegal change under Section 9A of the Industrial Disputes Act, 1947 (hereinafter referred to as “I.D. Act”); that all the family members and their relatives are residing at Dewas and the facilities which are available at Dewas are not available at Chopanki and at Chopanki within the radius of 40-50 Kms neither there is any residential area nor any means of transport are available; and that their services is also not required at Chopanki factory. It was also the case on behalf of the respective workmen that at Dewas precision pipes are manufactured whereas at Chopanki, the work of manufacturing of nut and bolt is done and the transfer will change the nature of work, therefore, it was prayed to declare the transfer as illegal and void.

Court held that

"It emerge from the evidence on record that the respective respondents – employees were employed at Dewas and working at Dewas for more than 25 to 30 years; all of them came to be transferred suddenly from Dewas to Chopanki, which is at a distance of 900 Kms. from Dewas; they came to be transferred at the fag end of their service career; that the place where they were transferred had no educational and medical facilities and that the place where they were transferred had no residential area within 40-50 Kms. from the plant with no means of transport. It also emerges that the number of workers at Dewas factory has been reduced by nine by transferring the workmen to Chopanki."

" The question is not about the transfer only, the question is about the consequences of transfer. In the present case, the nature of work/service conditions would be changed and the consequences of transfer would result in the change of service conditions and the reduction of employees at Dewas factory, for which the Fourth Schedule and Section 9A shall be attracted."

In view of the above and for the reasons stated above, we see no reason to interfere with the impugned judgment and award passed by the learned Labour Court confirmed by the learned Single Judge of the High Court. We are in complete agreement with the view taken by the learned Labour Court as well as the learned Single Judge holding the order of transfer dated 13.01.2015 transferring the respective workman from Dewas to Chopanki, which is at about 900 Kms. from the place they were working as illegal, mala fide and in violation of Section 9A read with Fourth Schedule of the Industrial Disputes Act.

Section 9A of the Industrial Disputes Act 1947 would be attracted if transfer of workmen results in change of service conditions and nature of work..pdf

Types of employee transfers

Employee transfers may be classified as below.

a) Production transfers:

Such transfers are made to meet the company requirements. The surplus employees in one department/section who are efficient might be absorbed in other place where there is a requirement. Such transfers help to stabilize employment.

b) Replacement transfers:

This takes place to replace a new employee who has been in the organization for a long time and thereby giving some relief to an old employee from the heavy pressure of work.

c) Versatility transfers:

It is also known as rotation. It is made to develop all round employees by moving them from one job to another. It also helps to reduce boredom and monotony.

d) Personnel or remedial transfers:

Such a transfer is made to rectify mistakes in selection and placement. As a follow up, the wrongly placed employee is transferred to a more suitable job.

e) Shift transfers:

This is pretty common where there is more than one shift and when there is regularised rotation.

Facts [+]

Ericsson lays off 22 executives in India,

Feb, 2012. The Indian arm of the world's largest telecoms gearmaker, Ericsson, is trimming and redeploying staff as it faces lukewarm operator spends in a fiercely competitive market.

Nearly 22 executives across categories have been fired on performance grounds and another 100 are likely to be transferred to sister organisations like Ericsson India Global Services, Ericsson Supply Site Jaipur, R&D centres and the regional technical centres (RTCs) to boost efficiencies, a top company executive aware of the development .

Transfer Policy

Every organization should have a fair and impartial transfer policy which should be known to each employee. The responsibility for effecting transfers is usually entrusted to an executive with power to prescribe the conditions under which requests for transfers are approved. Care should be taken to ensure that frequent or large-scale transfers are avoided by laying down adequate selection and placement procedures for the purpose. A good transfer policy should:

  • Specifically clarify the types of transfers and the conditions under which these will be made;

  • Locate the authority in some officer who may initiate and implement transfers;

  • Indicate whether transfers can be made only within a sub-unit or also between departments, divisions/plants;

  • Indicate the basis for transfer, i.e., whether it will be based on seniority or on skill and competence or any other factor;

  • Decide the rate of pay to be given to the transferee;

  • Intimate the fact of transfer to the person concerned well in advance;

  • Be in writing and duly communicated to all concerned;

  • Not be made frequently and not for the sake of transfer only.