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Chances for the IT sector to be exempted from Industrial Employment Act
For the next five years, the government of the Karnataka state is likely to be exempting the ITITeS companies from the Industrial Employment Standing Orders Act, by providing them with sector immunity from the statutory employment terms of the government
BENGALURU: For the next five years, the government of the Karnataka state is likely to be exempting the IT/ITeS companies from the Industrial Employment (Standing Orders) Act, by providing them with sector immunity from the statutory employment terms of the government.
On the 25th of January 2014, the last notification regarding the standing orders exemption was issued and was validated for five years. It will be expiring in the month of January.
The principal secretary for the IT, BT and science & technology, Gaurav Gupta had said that, “The government is looking at ways to proactively engage with IT/ITeS companies to accelerate their growth. We are consulting other stakeholders – Nasscom and the labour department – on the exemption from standing orders. We will ensure smooth functioning for the IT industry here.”
Nasscom which is the IT industry body, had made a formal representation to the government of Karnataka a few months ago for the continuation of the exemption. Nasscom said that by extending the application of the Standing Orders Act to the IT/ITeS sector would cause inflation in the costs of doing business and would ultimately make the technological hub of India less competitive on the basis of international markets. “The IT/ITeS industry in general has been diligently complying with the conditions specified in the exemption notification,” a Nasscom spokesperson told a source.
Nasscom said that the Act was primarily meant for the factories and other industrial establishments as they had no developed HR policies and practices.
KS Viswanathan, the vice-president of industry initiatives in Nasscom had said that, “Many of the statutory terms in the standing orders could become a burden on the IT industry.”
“Companies have devised robust internal employee feedback mechanisms which have been evolving over the years. Every employee has a right to be heard, and has access to open door policies, 360-degree feedback, escalation matrix, etc, for grievance redressal,” Nasscom said.
The sector has a belief that its 24x7 operating model, and the provision of services for the clients in two phases onsite and offsite will be making it a very different kind of business model from the one that had been sought to be regulated by the Act.
