Karnataka mulls revoking labour law exemption granted to IT firms

Having received hundreds of complaints from employees of IT and ITes industries about unfair work practices in their respective companies, the government is thinking of revoking an exemption given to these industries from the Industrial Employment (Standing Order Act, 1946), in a
bid to impose strict regulations on them. 

The government is examining the possibility of revoking the exemption from the Standing Order Act, which will help the government closely monitor regulations followed by these companies, a release from the department said. 

Ranging from unfair termination, mass retrenchment, ID blocking to long work hours and other unfair work practices, the labour department’s inboxes are full of complaints from employees, department officials told DH. 

Since the industries are exempted from the Act, the government cannot directly intervene and it acts as a protective shield for them, Mohammed Mohsin, principal secretary of labour department, said. 

Karnataka is the only state to have exempted IT/ITes industries from the provisions of the Act and this exemption is in force since 2014. It was introduced in an effort to encourage the growth of the IT sector in the state. 

At present, there are 8,785 IT/BT companies in the state, which employ close to 19 lakh people, according to data available with the labour department. 

The department is in the process of examining the complaints and will call a stakeholders’ meeting soon to decide on revoking the exemption, Mohsin said.

Independent director and former CEO of Nasscom Foundation Ashok Pamidi opined that the government would be boosting the IT sector growth by continuing the exemption.

“A majority of the IT industries in Karnataka are export-oriented and hence they already follow globally accepted procedures, for instance the Global Reporting Initiative (GRI) standards. Adding further local procedures would limit their functioning,” he said.