'Standing Orders' and IT Industry

By Ramkumar

After a blanket exemption of around twelve years IT industry comes under the purview of Industrial Employment (Standing Orders) Act. The article tells how important the piece of law is as far as IT/ITeS employees are considered and counters the shallow arguments of a section of industry.

IT industry has remained a glamorous opportunity for Indian youth throughout the last decade or more. Compared to any other sector IT had a desirable working atmosphere which we had seen only in developed nations till a few years back.
Its workplace conditions were world class. Post 2008 recession we are seeing a normalisation in the software industry. Entry level package has remained almost constant during this period.1And it is doubtful that number of jobs generated in IT could satisfy the huge number of engineering plus other graduates who aspire to be part of the industry. This is the perspective with which we have to analyse the increasing number of employment fraud cases in IT where freshers pay a hefty sum for grabbing a job. These changes in industry nature force us to examine certain unhealthy practices in the industry which were seldom noticed, or in a more appropriate phrase, seldom cared for.

Package to compensate rights/dignity?

The fear of blacklisting and non-issue of Service certificate is often expressed by IT employees, so that they have to be good to the company. The inhuman way of termination, even though most of them are forced resignations are also rampant. It is conflictual that an industry boasting of never-before-imagined working conditions and far superior procedures did not have many times the courtesy of giving a notice to the employee before termination. In the name of cost cutting when some benefits were taken away did it ever have an actual dialog with its employees. How many companies provide procedures for resolution, settlement or prosecution of acts, of sexual harassment? Many of these situations would be impossible if the industry had not been enjoying the blanket exemption from Industrial Employment (Standing Orders) Act, 1946. Does the huge wage compared to Indian standards make it justifiable to have the employees at the mercy of HR and management? These questions are not new or IT sector specific.

As stated by Labour Investigation Committee, 1946 “An industrial worker has the right to know the terms and conditions under which he is employed and the rules of discipline which he is expected to follow.”2 Standing Orders is a set of rules which defines the relationship between the employer and the employees. Since the Standing Order is drafted in consultation with the employees and is certified by the Labour Authorities of the government these rules are binding on both the parties. Standing Orders include dismissal procedures and means of redress for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants. You also need to precisely specify what all amounts to misconduct and how the organization is going to react in these situations. You need to include about the probation period, notice period to be given at the time of resignation, any benefits, if given to the employees need to be specified, how do you expect your employees to behave in the office, etc.

Benefits of Standing Orders

Standing Orders bring transparency and mutually accepted procedures in work place. Absence of certified Standing Orders makes room for unscrupulous procedures - a company can have their own random firing procedures, employees do not have a say in the working conditions or even company can violate their own standard set of procedures at any time, the company can modify their conditions of work any time eg. transport, food-related, facilities etc. The fact that Standing Orders have to conform to Model Standing Order ensures certain basic privileges for the employees. By Model Standing Order every employee who leaves employment or retires shall be given service certificate and salary or income certificate on request. Withdrawal of currently provided facilities has to be discussed with employees. Increase of notice period cannot be done unilaterally. Companies are to define various shifts, allowance for various shifts other than normal shifts etc. Details of overtime work for an employee has to properly recorded. And overtime work of an employee has to be paid twice the normal.

The decision of Government to extent the exemption of Software industry from complying with the Industrial Employment (Standing Orders) Act is an unexpected shock to IT/ITeS employees’ community. After a too long period of exemption of 10 years and further extension of two more years which expired in August, 2011 industry’s request to extend it for another year doesn’t seems to be in a right spirit. Not providing any valid reason to support its claim may lead to loss of its good faith among the employees. As noted by Labour Department as well as Karnataka State Women’s Commission, large scale complaints from the employees like premature hire-and-fire system, harassment, long working hours with low salary, termination of women employees without proper enquiry, numerous cases of sexual harassment is a reality in the industry.

Shallow arguments

The reasoning behind the move to ask for extension are like high level of attrition, flexibility in terms working hours, style of working etc. which in no way seems to be serious claims. High level of attrition shows opportunity for higher pay elsewhere, which underlines the fact that software employees are not paid proportional to the profit made by the industry. Flexible working hours are possible even when complying with this law. And how the fear of “inspector raj, bribery, and a tool for harassment” could be a reason enough for non-enactment of a piece of law itself? No one hears of complaints on inspector raj when the industry receives huge incentives and tax holidays through the same inspector raj. It may be a fact that large MNCs provide better working conditions and benefits to the employees than what is entailed by the law, then why do they fear to implement the act. And the conditions in smaller or middle level companies leave much to be desired.

The act asks the firms to formulate rules and procedures to be followed, simple reasoning cannot comprehend the opposition to the act when the technologically advanced IT industry is the most equipped to implement the same. Claim for repeal of an act for the fear that it will lead to unionisation in the industry is in itself pure disregard for the basic freedom provided by our Constitution. And unionisation is in no way related to Standing Orders. When all the big names in the industry places its employees as one of the major reason for their success the move to make sure not the slightest of their voice is heard is pure contradiction. When their counterparts in US or Europe are ready to adhere to similar acts and have more employee participation in decision making what is it that makes Indian IT industry so special to get exempted from the act?

Sexual Harassment at workplace

Another important aspect is that procedures for the resolution, settlement or prosecution of acts of sexual harassment are to be added to the Standing Orders. Through its 1997 Vishaka verdict, the Supreme Court has directed all firms to set up a committee to deal with all cases of sexual harassment at the workplace. Court had framed guidelines to handle cases of sexual harassment at the workplace. Appropriate work conditions should be provided in respect of work, leisure, health and hygiene to further ensure that there is no hostile environment towards women at work places and no employee woman should have reasonable grounds to believe that she is disadvantaged in connection with her employment. Absence of Standing Order means pure absence of such statutory mechanisms.

After the expiry of exemption, the law states that companies should draft the Standing Order and get it approved within six months. Extending the exemption till next April will in effect provide two more years of exemption after the expiration in last August. Ever since the exemption was over in Aug 2011 ITEC has been campaigning asking the state government not to go for further exemption. ITEC took up these serious issues to create awareness among IT/ITeS Employees and submitted a Memorandum to Labour Minister and Labour Commissioner. ITEC's request has been corroborated by Labour department as well as Womens commission who were also not for the extension of exemption.


1.Number of tech graduates swells; salaries at IT firms stay stagnant

2.Main Report, Labour Investigation Committee, 1946 with Mr. D. V. Rege as the Chairman

Add new comment

Filtered HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <blockquote> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Enter the characters shown in the image.