IT major Infosys said that the ‘non-compete’ clause in the offer letters of employees would not refrain them from joining other companies or limit career growth. This came as a response to a complaint filed by an IT union against Infosys, due to a clause in its employment agreements.
The company released a statement that said, “It is a standard business practice in many parts of the world for employment contracts.” The complaint filed by the IT employee union was based on multiple complaints from Infosys employees.
According to Infosys, these clauses are fully disclosed to all job aspirants before they decide to join Infosys and are not made to limit their career growth and aspirations.
The company said such clauses are added “to include controls of reasonable scope and duration to protect the confidentiality of information, customer connection, and other legitimate business interests”.
The IT employee union, Nascent Information Technology Employees Senate (NITES), filed a complaint with the Labour Ministry against Infosys seeking removal of the non-compete clause. The clause bans employees from working for the same customer in rival firms such as TCS, Accenture, IBM, Cognizant, and Wipro.
According to the letter to Union Minister Bhupender Yadav, which Moneycontrol has reviewed, the IT major recently imposed a non-compete clause that bans the employees from working for the same customers, with whom they had worked within the company for the last 12 months, in rival firms for six months after they quit Infosys. It also prohibits them from being in the employ of the clients if they had worked with them in the twelve months before they quit Infosys.
The competitors named in the agreement include TCS, Accenture, IBM, Cognizant, and Wipro.
While these provisions are not new and are common among companies, they have gained prominence as it comes against the backdrop of increased attrition the companies are facing due to an increase in demand. Infosys reported 27.7 percent attrition for the quarter ended March 31, 2022.
To tackle attrition, the firm hired 85,000 freshers in FY22 and will hire 50,000 in the current fiscal. IT companies expect the situation to continue for the coming quarters, before attrition moderates.