Labour norms must apply to IT

Ganesh Chella | Updated on March 12, 2018 Published on October 10, 2012

IT layoffs are executed in copybook American style. — K. Murali Kumar

The industry has not been proactive in codifying best labour practices.

Having obtained an exemption for 10 years since 2000 from Industrial Employment (Standing Orders) Act, or SO Act, the IT industry leaders seem to have forgotten all about the larger implications of running an industry without a legal framework to govern its workforce. This is despite the size of the industry, the nature of the workforce and the stress levels involved. Given this backdrop, it is important to look at the larger context in which the sector is situated.

Given global economic cycles, the IT industry has seen a lot of layoffs over the years. Since these often involve white collared employees, these layoffs are executed in copybook American style. Given that they hire in thousands and as a consequence face quality problems in the hiring process, they do routinely terminate employees for falsification and poor performance in much the same way. Similarly, instances of fraud and corrupt practices in employment are not uncommon, and have been reported in the media.

In the face of mounting public opinion, industry has not taken any affirmative action. Unfortunately, having enjoyed exemption for over 10 years but not having taken any affirmative action to establish an alternate labour governance framework, the current plea of the industry to be exempt from labour standards applicable to others seems unconvincing.


It took the Supreme Court to come up with the Vishaka Guidelines on sexual harassment. It was not initiated by the industry, despite employing a large percentage of women employees.

It took several suicides for these firms to wake up and reach out to set up Employee Assistance Programmes. Even today, most of these programmes do not receive adequate attention from top management.

Over the years, at least a few employee representative bodies have begun to emerge, mostly to address issues raised by employees. These include UNITES, The ITEC (IT and ITeS Employees Centre), a support group for IT professionals, and ITHI, a forum of women employees in IT and ITeS and so on. Beyond these, several self-interest groups keep emerging from time to time, especially using social media to address specific issues.

Over the years studies have routinely pointed out that all is not well as far as employee well-being in the IT industry is concerned. For example, an Assocham report pointed out that 55 per cent of IT employees suffer from lifestyle diseases.

Unfortunately, for an industry of such a large size, there is no system of external audit of working conditions or support systems. Nor are there any good practices guidelines issued by Nasscom, the industry body. For example, the UK has guidelines and good practices recommended for the call centre industry through the Local Authority Circular based on the research undertaken by the Health and Safety Laboratory. Nor are there uniform guidelines to deal with such contentious issues as grievances, termination and dismissal for misconduct.


In the face of these larger contextual factors, matters like employee rights and responsibilities need to become more formally defined and cannot be left vague and open, the way you could leave it when each of these organisations employed 1,000 and not 100,000 people.

Yes, it is true that the Government got its diagnosis of the need right but its solution wrong. It is true that the current SO Act may not offer the most appropriate legal framework for the IT industry. The decision to come up with a customised Act is certainly a step in the right direction.

Having obtained exemption a decade ago when the context was so different, the IT Industry leaders must have recognised the larger implications of running an industry with such high mobility without a legal framework to govern its workforce. They should have proactively come up with a framework that they thought would work.

It is one of the most fundamental elements of corporate social responsibility to deal with your own employees in a socially responsible manner. At a time when citizens have the right to information, the least is to give employees a right to know the rules by which they will be governed. Your employees must know their rights and, of course, their obligations.

It should not be too difficult a task to come up with a world-class framework.


Such a framework should cover the obvious areas like working conditions. It should also cover the contentious issues relating to grievance redress, termination and disciplinary procedures. Most certainly, industry should be empowered to terminate employees with due notice, should there be a need.

Given the nature of special issues that knowledge workers face, the legislation should pay special attention to aspects that impact physical as well as mental health and psychological well being. It should also cover aspects relating to diversity and inclusion.

I believe that a sensible legislation will only further enhance the image and stature of the industry. Since the big firms are supposedly doing better than the law, complying with it should not be difficult for them, just as the hundreds of large and reputed manufacturing companies in our country seldom have trouble complying with the various stringent Acts that apply to them. It might make them more competitive and prevent the less credible sweat shops from setting up and running IT businesses.

Also, we must see this as a national issue and not as a problem in the state of Karnataka because a national IT organisation cannot do things in isolation for one single state.

If the current intent does become a reality, it will be a big step forward in the IT industry getting its own ‘Act’ together!

(The author is an HR consultant.)


Published on October 10, 2012
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