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IT companies to fall in line as the honeymoon ends

Companies will have to shun hire-and-fire policy; no longer exempt from act specifying work shifts, overtime pay.

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There may be tough days ahead for the information technology (IT) companies. Not only will they lose the hire-and-fire policy that they have enjoyed so far, they will also have to specify work shifts and pay employees for working overtime.

For the last 11 years, the IT companies were exempted from following the norms of the Industrial Employment (Standing Orders) Act 1946. But the exemption of these norms expired in August 2011.

“There is a demand for exempting IT companies from following these norms. We may exempt the IT companies on a case-to-case basis if any company approaches us. But companies that employ more than 50 people have to adopt the orders by the end of August 2012,” said SR Umashankar, labour commissioner.

He said the failure to adhere to these the norms specified in the act would invite penalty. “Our officers can inspect the IT companies and impose penalty for violation of norms of Industrial Employment (Standing Orders) Act 1946,” he said.

This is bad news for the IT companies as the hire-and-fire policy in the IT sector ensured that there would be no place for complacency among the employees, and constantly kept the employees on their toes. IT companies now fear that edge being lost if they have to adhere to the norms of the act after exemption is lifted.

PV Roy, managing director, Pixel Softech and chairman of expert committee on IT & IT Enabled Service, Bangalore Chamber of Industry & Commerce (BCIC), said the adherence to these norms would be good as long as they would not affect the performance of the employees since the IT companies survive on performance of their employees.

He said the norms would especially help the women employees to an extent because the work shifts would be specified.
“Withdrawal of exemption to IT companies from the Industrial Employment (Standing Orders) Act, 1946, definitely is happy news for IT/ITES employees. This has become possible due to the constant pressure from IT employees’ groups, IT Women Employees’ Forum, and the general IT employees,'' said Suresh Kodoor, a member of ITEC.

JR Bangera, president, Federation of Karnataka Chamber of Commerce and Industries, said firing of IT employees is not a good thing and instead will help the companies perform better. “I think these norms should not hinder the development of IT companies,’’ he said.

Welcoming the state government’s decision, Manjula C, chairperson, Women Rights Commission, said it were the efforts of the commission that made the government not to oblige to IT companies harassing women employees for over 10 years.

“I have received many complaints from women employees in IT companies on various types of harassment. Now, we have the power to take up cases on our own,” she said.

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