Infosys employment contracts issue reaches Karnataka Labour Department
The tussle between information technology (IT) major Infosys and Pune-based labour union Nascent IT Employees Senate regarding the non-compete clauses in the employment contracts will now be fought on a different turf – the Karnataka Labour Department.
The office of the assistant labour commissioner of Karnataka has sent a notice to the managing director and CEO of India’s second-largest software exporter for a joint discussion on July 4 at 3 pm “to examine and verify the contents of the complaint filed by the employee of your organization,” read the notice,
In a letter to the deputy chief labour commissioner in New Delhi in May, Infosys had said the non-compete clause in its offer letters was to ensure business confidentiality and is a common practice among IT companies in India.
“The central government, after the intervention, had earlier forwarded the case to the state government labour departments of Haryana, Maharashtra, and Karnataka,”
According to Infosys’ contracts, an employee shall not accept for six months an employment offer from “named competitors” such as
- TCS
- NSE
- Wipro
- NSE
- HCL
among others, if the new job involves working with a customer with whom the employee has worked in the preceding 12 months during his/her preceding 12 months stint at Infosys. The letters also point out that an employee should not accept employment offers for six months from a customer with whom he/she has directly worked in the preceding 12 months.
The restrictions contained in the offer letters are “restraint of trade and therefore illegal” under Section 27 of the Indian Contract Act 1872, the complaint had noted.
“It is a standard business practice in many parts of the world for employment contracts to include controls of reasonable scope and duration to protect the confidentiality of information, customer connection, and other legitimate business interests,”