Sector will come under general provisions of legislation

IT and IT-enabled service (ITeS) companies in the State have been asked to submit drafts of their Industrial Employment Standing Orders by December 31, according to a government notification on Tuesday.

The notification, however, extends the exemption for IT and biotechnology companies from the general provisions of labour legislation that govern workplaces employing more than 50 workers, to March 31, 2013. These companies, which have been enjoying such exemption since 1999, had lobbied for a 10-year extension when it ended in August 2011.

Karnataka is the only State that had granted such an exemption to this sector. The Industrial Employment (Standing Orders) Act 1946 requires employers to define and inform workers the terms and conditions of employment on their premises. 

I.B.N. Prasad, Principal Secretary, Department of Information Technology, Biotechnology and Science and Technology, told The Hindu that the issue of a blanket exemption is a closed chapter. Instead, he said, IT companies will now, over the next three months, work with the Labour Department to come up with the “right kind of standing orders that are suitable to the requirements of this industry”. He added that this will be finalised by March.

The idea is to have exclusive standing orders for three kinds of industry verticals: business process outsourcing (BPO) companies, software firms and hardware companies.

“We explained to the industry that the department is not against them, but there is a need to follow benchmarks and rules. This will help define employee-employer relations better,” Mr. Prasad said.

The IT Vision Group, led by Infosys Executive Co-Chairman S. Gopalakrishnan, and other industry bodies such as NASSCOM, ISA (Indian Semiconductor Association) and MAIT (Manufacturers’ Association of IT) will be on board. He pointed out that the same companies were working without any exemptions in other cities such as Gurgaon and Hyderabad.

J.T. Jinkalappa, Joint Labour Commissioner, described the recent order as a “conditional extension” of the deadline to submit a model draft of the standing orders for approval by the Labour Department.

Though the standing orders have nothing to do with the “right to unionise”, industry representatives are worried about the clause that requires an employee, or his representative, to sign the standing orders. “This provision has nothing to do with unions. The idea is to ensure that employees know about this document,” an official said.

When contacted, a NASSCOM spokesperson said that it has held talks with the State government to seek an extension of the exemption from the Industrial Employment (Standing Orders) Act.

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