Insights
Karnataka Government exemption to IT and other sectors
May 1, 2019The Karnataka Government, by a notification dated 25 May 2019 , has exempted knowledge based industries including IT/ ITeS, start-ups, animation, gaming, computer graphics, telecom, BPO and KPO from the application of various provisions of the Industrial Employment (Standing Orders) Act, 1946 for a further period of five years, despite stiff opposition from trade unions. The exemption had run its course by the end of January 2019 under an earlier notification dated 25 January 2014. As per news report, the trade unions in Karnataka plan to approach the Courts to overturn the extension.
The exemption is however subject to the following conditions:
- Constitution of an Internal Committee in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal) Act 2013 and rules framed thereunder;
- Setting up of a grievance redressal committee, comprising of equal number of representatives of employers and employees, for the purpose of redressing all types of grievances/ complaints of employees within a reasonable timeframe;
- Informing the concerned Deputy Labour Commissioner and Commissioner of Labour about cases of disciplinary action against their respective employees such as suspension, discharge, termination, demotion or dismissal; and
- Promptly intimating any information concerning the service conditions of their employees to the concerned Deputy Labour Commissioner and Commissioner of Labour within a reasonable timeframe fixed by the authority.
SAM & Co comment
Upon the expiry of the 5 year period under the 2014 notification, there were several representations made by the industry organizations for further extension of the exemption granted under the Standing Orders Act. It is in furtherance to these representations that the Karnataka Government has issued the Notification.
While the extension notification is a welcome measure for the technology driven organizations in Karnataka, it has not been favourably taken by the employees and the employee representative bodies who have raised concerns before the Karnataka Government. Regardless, the IT / ITES companies in Karnataka will be able to continue with policies and processes that align with global standards and market norms.
