Trade Unionism has extended its tentacles to penetrate into the IT sector asthe Labour Department has now clarified that the IT industry is no longer exempt from the Industrial Employment (Standing Orders) Act, 1946. The definition of ‘Workman’ under the Industrial Disputes Actwouldnow cover call centre agents and programmmers. The Karnataka Government has steered the sector clear off the exemption granted to the IT sector by making the Industrial Employment (Standing Orders) Act, 1946 applicable to the sector. Further the Tamil Nadu Government has conferred legal status upon the Trade Unions formed in the state.

What it means for the IT industry?

The IT industry is quick paced and highly progressive. The recurring developments in the sector demands that its workforce is upgraded to meet the newer requirements. It would be apposite to take stock of the regulatory compliances and the ramifications of Unionism in the IT sector:

  1. Standing orders would have to be formulated andcertified under Section 5 of the Industrial Employment (Standing Orders) Act, 1946.
  2. The Employers would have to define with sufficient precision the conditions of employment under them and make the said conditions known to the workmen employed by them.
  3. The sector would now be confronted with Collective bargaining on varied matters such as salary revision, working hours etc.Trade Unionism may lead to detailed negotiations on issues such as rest hours, salary increments etc.
  4. Hiring and firing would be highly regulated.The employer may have to conduct proper enquiry proceedings prior to taking any disciplinary action including Termination.An industry which is highly performance driven will now be able to take action against its workmen only on grounds of Misconduct as prescribed in the Standing Orders.
  5. The employers will be subjected to the jurisdiction of Labour Courts and the Industrial Disputes Act would be applicable to the IT establishments.


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