The State Government has extended the exemption for IT/ITES companies from the provision of the Industrial Employment (Standing Orders) Act for a further period of five years after briefly weighing on ending the concession.

The exemption, however, comes with certain conditions. The IT/ITES, startups, animation, gaming, computer graphics, telecom, BPO/KPO and other knowledge-based industrial establishments must set up an internal committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and a Grievance Redressal Committee (GRC) to address grievances of employees.

The companies must also report cases of disciplinary action like suspension, discharge, termination, demotion, dismissal etc. of their employees to the labour authorities concerned.

The Karnataka Employers Association President BC Prabhakar, while hailing the exemption, said the government action would go a long way in developing IT and ITES industries in Bengaluru and the rest of Karnataka. The Association, he added, had represented to the government to continue with the exemption till the Industrial Relation Code 2020 was implemented.

The government had been thinking of bringing the technology companies under the purview of labour regulations, but evidently has given up the idea after hearing out the stakeholders, who opposed the idea.

There are about 12 lakh men and 6 lakh women working in the 8785 IT/BT companies, according to the official data.

The Labour Department had cited instances of arbitrary termination, ID blocking, mass retrenchment, layoffs, and extended hours of work as well as sexual harassment at work workplace as a reason for revisiting the relaxation. But the latest notification has sought to address these concerns.

Karnataka had, by notification on January 25, 2014, exempted IT/ITES/BPO/KPO firms from The Industrial Employment (Standing Order) Act, 1946 and extended the same for a further period of five years on May 25, 2019, recognising them as a sunrise industry and to accelerate their growth in Bengaluru and rest of the state.

The standing order precisely defines the working and service conditions of employees and requires companies to comply with procedures before the service of an employee is terminated.

Chief Minister Siddaramaiah, speaking at the Bengaluru Tech Summit last year, had said Karnataka was home to about 5,500 IT/ITES companies and approximately 750 multinational corporations. “Our state has been a driving force behind the sector's success, contributing around USD 85 billion to the nation's exports.”

The development comes as Indian startups continue to reel under the impact of funding winter. As a result, multiple new-age tech companies have resorted to laying off employees in droves to conserve cash and extend their runway. In many instances, thousands of employees have been fired in a single retrenchment exercise while salary payout has been delayed for many others.

Article Source – PTI