The Union Ministry of Labour has sent a second notice to Infosys for a joint discussion regarding the non-compete clause in the employment agreements. This came after the IT employees union Nascent Information Technology Employees Senate (NITES) last month wrote to Union Labour Minister Bhupender Yadav and sought his intervention to remove the clause. The office of the Chief Labour Commissioner has issued the notice.
Infosys had originally been called for a joint discussion on April 28. However, the company told the Ministry that it had not received a copy of the notice, and asked for a copy of the same and for a new date for the meeting. The Ministry provided a copy of the grievance and rescheduled it to May 17.
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 with within the year before leaving the company. An additional clause is that for a period of six months after leaving Infosys, employees will not “Accept any offer of employment from a Named Competitor of Infosys, if my employment with such Named Competitor would involve me having to work with a Customer with whom I had worked in the twelve (12) months immediately preceding the termination of my employment with Infosys.” Named competitors are TCS, Accenture, Cognizant, IBM and Wipro.
The Pune-based IT employees union had said that the clause in the contracts of both IT and BPO employees was “illegal and arbitrary”. The letter written by NITES founder Harpreet Saluja to the Ministry had said that the restriction “is clearly in restraint of trade and therefore illegal under section 27 of the Contract Act”.
He added that such a clause was “unduly harsh and oppressive” and that the restraint on employees is greater than necessary.
In response to news reports, Infosys had earlier said that the clause was standard business practice in many parts of the world. It is standard practice “for employment contracts to include controls of reasonable scope and duration to protect confidentiality of information, customer connection and other legitimate business interests,” it said, and added that they do not have the effect of preventing employees from joining other organisations.