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Karnataka government exempts IT/ITeS from labour law for another 5 yrs

In a circular dated June 10, the state government said that the exemption was applicable to IT, ITeS, startups, animation, gaming, computer graphics, telecom, and BPO industries.
Last Updated : 11 June 2024, 13:59 IST
Last Updated : 11 June 2024, 13:59 IST

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Bengaluru: The Karnataka government has extended the exemption granted to IT and IT enabled services (ITeS) industries from the provisions of the Industrial Employment (Standing Orders) Act for a another five years till 2029. This will come as a welcome move for the sector, but may mean lesser overall protection for employees than what they would have had under the Act.

In a circular dated June 10, the state government said that the exemption was applicable to IT, ITeS, startups, animation, gaming, computer graphics, telecom, and BPO industries.

“The Karnataka Employers Association (KEA) welcomes the orders of the Government which would go a long way in further developing IT and ITES Industries in Karnataka and Bengaluru in particular,” said KEA President BC Prabhakar, in a statement on Tuesday.

The sectors have been exempt from the Industrial Employment (Standing Orders) Act since 2014, and the last exemption was given in 2019.

In December, the Karnataka labour department stated that it was contemplating discontinuation of the exemption enjoyed by the IT/ITeS sector and cited instances of unfair trade practices such as ID blocking, mass retrenchment, layoffs, extended work hours and sexual harassment at workplace, as reasons behind the decision.

The government held discussions with stakeholders, including KEA, before deciding on extending the benefits of the exemption by another five years.

The exemption is subject to a number of conditions, including constitution of an internal committee in accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, Redressal) Act 2013, setting up of a grievance redressal committee consisting of an equal number of members representing employer and employees, informing the concerned labour authorities about cases of disciplinary action against employees, such as suspension, discharge, termination, demotion or dismissal, and readiness to furnish details on service conditions of employees, when sought by the government.

According to government estimates, nearly 18 lakh professionals are employed across 8,785 IT/BT firms in Karnataka. Following Covid-19, the state labour department witnessed a surge in complaints from tech professionals alleging unfair trade practices at play> That is why the authorities had mulled taking away the exemptions. The move would have strengthened job security and help ensure a safer and more equitable work environment for employees.

However, it would have also reduced ease of business, constraints tied to determining and deploying policies, processes, frameworks and facilities, and higher cost of operations for companies.

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Published 11 June 2024, 13:59 IST

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