Historic changes in the IT industry

by Ramkumar

Employees in IT industry had pleasant news last year when it was declared to not extend the exemption from the implementation of the Industrial Employment (Standing Orders) Act in the IT industry. The companies were ordered to submit the draft Standing Orders by December 31st, 2012 and implement the act by March 31st, 2013. The industry where ‘deadline’ and ‘target’ are terms that reverberate often did not have the slightest shame in not sticking to the dates.
Only a very few of the companies prepared the draft and submitted it to the Labour Department. Now the date for implementation is also over and vast majority of the IT companies are yet to do something in this regard and it has to been seen when the act will be implemented in its proper essence. The government has not officially postponed the dates nor has shown the guts to force the IT companies to abide by the law.

It is in this scenario where the Act has already become applicable to the IT industry and the companies have not certified their Standing Orders, that Section 12-A takes its relevance. In section 12-A ‘for the period commencing on the date on which this Act becomes applicable to an industrial establishment and ending with the date on which the standing orders as finally certified under this Act come into operation, the prescribed model standing orders shall be deemed to be adopted in that establishment’. Model Standing Orders are specified in Schedule 1 of The Karnataka Industrial Employment (Standing Orders) Rules, 1961. This means that till the companies certify their Standing Order, the Model Standing Orders will be the Standing Orders for the firm. Also, even though the industry body NASSCOM had made some noises about drafting a Model Standing Orders for the whole industry, nothing has materialized so far.

Standing Orders bring transparency and mutually accepted procedures in the work place. Absence of certified Standing Orders makes room for unscrupulous procedures. For further details read ‘Research Brief - Standing Orders Act, IT Industry’. The fact that Standing Orders have to conform to Model Standing Orders ensures certain basic privileges for the employees. By this Act every employee who leaves employment or retires shall be given service certificate and salary or income certificate on request i.e. no one can threaten you with non-issue of experience certificate. An employee cannot be terminated without valid reasons and the company has to follow the procedure for termination published in Standing Orders. Withdrawal of currently provided facilities has to be discussed with employees. Increases in the notice period cannot be done unilaterally. Companies have to define various shifts, allowances for various shifts other than normal shifts etc. Details of overtime work for an employee has to be properly recorded. And overtime work by an employee has to be paid at twice the normal rate.

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. For further details, also read 'Standing Orders' and IT Industry’. The 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 woman employee should have reasonable grounds to believe that she is disadvantaged in connection with her employment. Absence of Standing Order means the pure absence of such statutory mechanisms.

All the rights and protections conferred by the act are effective in the industry. Now, employees in the IT industry have the right to raise concerns on any discriminatory procedures, agreements, the unfair termination, non-issue of experience/service certificate etc. The onus is now on the companies to file draft and get it certified. Non-abidance of the law will definitely invite legal action. Even though the penalties for non-certification or acts in contravention of the certified standing orders may be too petty for the software firms, proceedings are criminal in nature and convictions will have serious consequences esp. for her/his business. For avoiding confusions and future predicaments and for the larger interest of industry IT firms should draft the Standing Orders and get it certified at the earliest.

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