IT cos fear licence raj in K’taka with industrial Act

The $100-billion Indian IT industry, which is already plagued by myriad economic concerns, will soon have to take on another challenge in Karnataka, the country's software hub. The Industrial Establishment (Standing Order) Act, 1946, which the software industry fears will bring back some kind of 'inspector raj', is slated to kick off from April 2013.

The decision to implement the Act was taken last week. According to a senior state labour department official, the government decided to bring back this Act following a number of complaints from IT-sector employees concerning harassment, non-payment of compensation and stressful working conditions.

The objective of the Act is to minimise industrial unrest and fix responsibilities and accountability of employees. This is something that the industry is not able to fathom. Similarly, the Act also defines service conditions such as punctuality, leave facilities, working hours and medical benefits among others. Industry captains speaking to FE on condition of anonymity said that these factors should be left to the discretion of the employers. The Act will apply to all establishments employing 50 or more people.

The IT firms are finding it amusing that the Act calls for details on shifts, late coming and classification of employees to be displayed at various points in the campus. A top official with an IT firm told FE that these are indicative of an earlier style of working and do not belong to today's globalised work environment.

The IT industry was exempted from the Act for over a decade but it expired on August 26, 2011. The state, which contributes over 30% of the country's total software exports, has been examining the possibility of reviving the Act for some time now. It is likely to be notified again within the next three weeks. However, the state government will provide six months' time before implementing the law by April 2013. The labour department has made a very detailed presentation to the government on the merits of introducing the Act.

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