Infosys Summoned by Karnataka Labour Office Over Non-Compete Clause; Details Here

The office of the assistant labour commissioner of Karnataka has sent a notice to IT major Infosys for a joint discussion on July 4 “to examine and verify the contents of the complaint filed by the employee of your organisation”, according to an ET report. The notice, related to a matter related to the non-compete clauses in the employment contracts, has been sent to the software company’s managing director and CEO.

Pune-based labour union Nascent Information Technology Employees Senate had urged the labour ministry in April to ask Infosys to remove the clause from its employment contracts.

The notice after the central labour ministry’s attempts to call for joint discussions since April had hit an impasse as Infosys abstained from the meeting. 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, according to the ET report.

As per the contract, Infosys bans employees from working for the same customer in rival firms – TCS, IBM, Cognizant, Accenture and Wipro – for six months after the termination of their employment.

“The purpose of the clause (non-competing clause) under discussion is to ensure business and client confidentiality. Moreover, the obligation is applicable for a very limited period only,” according to the report.

The ET report said Infosys did not respond to a request seeking comment on the latest development.

“The central government, after the intervention, had earlier forwarded the case to the state government labour departments of Haryana, Maharashtra, and Karnataka. In pursuance to this, the Karnataka state government’s labour ministry has issued a notice. We believe the company wouldn’t be able to escape the provisions of the Indian Contract Act on jurisdiction grounds and exploitation of the employees will be stopped now,” Harpreet Saluja, president of the union in a statement.

Infosys had skipped the three previous meetings with the central labour ministry on May 27, May 16, and April 28, following a written complaint by the Pune-based IT employees union seeking intervention from the Labour Ministry and the Corporate Affairs Ministry to remove the non-compete clause from the employment contracts.