Infosys was summoned along with the Nascent Information Technology Employees Senate (NITES) for a joint meeting on July 4 over the non-compete clause.

Infosys
Atom Infosys Tuesday, July 05, 2022 - 09:15

Infosys has sought time till July 13 from the Karnataka Labour Department after it was summoned on Monday, July 4, regarding complaints over a non-compete clause in its offer letters. A complaint was filed against the company by the Nascent Information Technology Employees’ Senate (NITES) in this regard. The summons was issued to officials of Infosys to examine and verify the complaints made by NITES. 

The union had sought the intervention of Union Labour Minister Bhupender Yadav to remove the non-compete clause, calling it arbitrary, unethical and illegal. A non-compete clause prohibits employees of one company from joining rival companies for a specified period of time. For IT employees, the non-compete clause states that for six months after leaving the company, the employee will not work with a customer they engaged within 12 months preceding them leaving the company. Named companies include TCS, Accenture, Cognizant, IBM, Wipro and others.

In its first letter to the Union Labour Ministry, Harpreet Saluja, president of NITES, said that the clause is “clearly in restraint of trade and therefore illegal under section 27 of the Contract Act”. Article 27 of the Contract Act states that any agreement that restricts a person from exercising a lawful profession, trade or business is void. He also added that it was important to look into the contracts, keeping in mind the inequality in bargaining powers of the employer and employees. 

At the time, Infosys had responded to the NITES complaint, saying that the non-compete clause is a standard business practice. "It is standard business practice in many parts of the world for employment contracts to include controls of reasonable scope and duration to protect confidentiality of information, customer connection and other legitimate business interests. These are fully disclosed to all job aspirants before they decide to join Infosys, and do not have the effect of preventing employees from joining other organisations for career growth and aspirations," the statement said.

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.