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Indian IT Sector Soon to Come under Archaic Labor law

After remaining exempted from the Industrial Employment (Standing Orders) Act, 1946 for more than a decade, the Indian IT sector is now feeling the heat as the law returns to cause major inconvenience for the young industry. Major software companies in the technology capital of India, Bangalore are in distraught as the new law with its rules and regulations may put several restrictions on its working environment.

The 19th century law was exempted to get rid of the harassment poised by labor departments and inspector raj. Further bringing this law into action will not favor the IT companies in the globalised world. It’s the IT industries, which are free of labor groupings and inspector raj from other major industries in the country. If the archaic law is made applicable to this sector also, it may create many complicated and unnecessary procedures difficult to deal with.

The law envisages for an approval of a ‘standing order’ by labor unions or staff representatives which will be defined by the respective companies regarding the conditions of employment. The conditions will be posted on special boards and maintained at the entrance through which major workforce of the companies enter.

The conditions are feared to be favorable to the non-performing employees with a proper scope to create an unionized approach. The IT industry is based on its own guidelines, practices and working norms which are more than what the law prescribes.

Earlier the Karnataka government lured many of the Indian and multinational software companies with a clear exemption from this labor law to attract investments, which resulted a huge contribution of multibillion dollars to the state GDP. In the year 2011-12, Rs 1.3 lakh crore worth of software services were exported from Karnataka, which is about a third of total exports made from India.

It’s the smaller and mid-sized IT companies which are getting affected by the new law as labor department trying to contact them for certification of standing orders. While much of the young companies still unaware about the whole new thing, India’s two biggest software exporters, Infosys and Wipro, have refused to comment on this.

The companies are directed to come up with all the details which include the working hours, shifts, wages, job cuts, leave and attendance, grounds for termination and definition of misconduct to the authorities to comply with the standing orders.

The IT industry which has a ‘self-certification process’ will be able to comply with labor laws, feels many. Further the working scenario of IT industries is totally different from labor- intensive manufacturing industries with different staffing system and job hours.

But at the same time the law will prove beneficial for many to curb the so-called unfair practices made by the top employers, said Karthik Sekhar, general secretary at the UNITES Professionals association of software employees.

There have been complaints of overtime, unreasonable termination and sexual harassments from the IT employers over the years. The archaic law will help counter the problem to a large extent, opined SR Umashankar, Karnataka’s labor commissioner.

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Mona Madaan

MM Enterprises is an Indian government authorized professional international recruitment agency located in Delhi, India.
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