PROTECTING LABOUR IN CORPORATE RESTRUCTURING: EMPLOYEE RIGHTS IN MERGERS AND ACQUISITIONS

AUTHOR – SMRITHI ANILKUMAR, STUDENT AT SCHOOL OF EXCELLENCE IN LAW THE TAMILNADU DR AMBEDKAR LAW UNIVERSIY, CHENNAI

BEST CITATION – SMRITHI ANILKUMAR, PROTECTING LABOUR IN CORPORATE RESTRUCTURING: EMPLOYEE RIGHTS IN MERGERS AND ACQUISITIONS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (5) OF 2026, PG. 337-349, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT:

While corporate restructuring through mergers and acquisitions (M&A) has become a defining characteristic of contemporary economic growth, it also poses important questions about labour rights protection. As important stakeholders in business organisations, employees are frequently the most impacted throughout these changes, dealing with concerns about wages, social security benefits, job security, and continuity of service. With an emphasis on the revolutionary effects of the recently enacted Four Labour Codes, 2025, this study explores the changing legal environment governing employee rights in M&A transactions in India.

The paper examines how the regulatory environment has changed as a result of the consolidation of 29 disparate labor laws into four comprehensive codes, which have improved formalization, increased social security coverage, and standardized compliance procedures. In contrast to countries like the UK, it critically assesses the ongoing lack of a specific statutory framework controlling the transfer of undertakings, leaving employee protection reliant on court interpretation and contractual agreements. The essay delves deeper into important legal topics such as employment continuity, compensation for layoffs, employee classification, labor due diligence, and the interaction between labor and corporate laws.

This study illustrates the conflict between promoting ease of doing business and guaranteeing social justice for employees by looking at statutory requirements, judicial tendencies, and real-world difficulties in M&A transactions. It contends that there are still large gaps in protecting employee rights during corporate restructuring, even though the new labor rules reflect a paradigm change in bringing labor regulation into line with modern economic realities. In order to improve employee involvement, guarantee fair treatment, and establish a thorough framework for labor protection in business transfers, the report ends with reform recommendations.

All things considered, the study adds to the conversation about striking a balance between worker wellbeing and economic efficiency in a business climate that is becoming more and more dynamic.