IT employees union files complaint against Infosys, seeks removal of non-compete clause

Infosys has already closed its Moscow centre.

An IT employee union has filed a complaint with the Labour Ministry against IT major Infosys seeking removal of the non-compete clause, which bans employees from working for the same customer in rival firms such as TCS, Accenture, IBM, Cognizant, and Wipro.

The complaint filed by the IT employee union Nascent Information Technology Employees Senate (NITES) was based on multiple complaints from Infosys employees.

Also Read | We have given very strong guidance, will continue to gain market share: Infosys CEO Salil Parekh

According to the letter to the 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, who they had worked with in 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.

Harpreet Saluja, President, NITES, said in the letter that this clause violates the Section 27 of the Contract Act and is illegal.

This comes at the back of increased attrition the companies are facing at the back of increased 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.

The non-compete in contention reads thus, going by the complaint.

For the period of six months after leaving Infosys, employees will not

• Accept any offer of employment from any customer, (with whom I worked) in the twelve months immediately preceding my termination.

• Accept any offer of employment from a Named Competitor of Infosys, if the 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.

The letter said that these clauses are unduly harsh and oppressive. They are likely to affect the employee’s means of procuring a livelihood for himself and his family. "Hence the company should be stopped from enforcing it," the letter added.