Kathmandu: The Insurance Board has directed all the insurers not to demote any of the employees in the process of merger or acquisition. The Board has issued a new circular on Monday making some amendments and clarifications to the earlier circular on merger and acquisition.
As per the new circular, in case of merger or acquisition of two or more insurance companies, the existing designation of the employees of any company will not be demoted. Similarly, according to the Labor Act, the salary and allowances of the employees will not be decreased in case of merger or acquisition. In such case, if any one of the company has higher pay scale, the same will be provided to the employees of another company participating in the merger. There is a provision in the Labor Act that except in exceptional cases, the benefit received by the worker or employee cannot be deducted.
The Board has also mentioned in the circular that the employees can be provided voluntary retirement scheme for the managers and other level employees who are not willing to work in the company after the merger.
The regulatory authority has also revoked the provision that had restricted the Chairman of BODs of the Insurer or Coordinator of the Finance Committee to participate in the merger and acquisition committee of the same insurer.