Infosys skips meeting with Labour Ministry, IT union again

Infosys, like other IT majors, is facing increased attrition at the back of increased demand. Infosys reported 27.7 percent attrition for the quarter ended March 31, 2022.

Software major Infosys skipped a discussion for the second time in two months with the Labour Ministry and IT Union, Nascent Information Technology Employees Senate (NITES), on its contentious non-compete clause agreement.

According to a statement by NITES, the union has submitted supporting evidence against Infosys to the authorities for further action. They added, “We have apprised Hon'ble Labour Ministry that the non-compete agreement is illegal and the Indian Contract law and Supreme court judgements are clear regarding the same."

The next date for further discussion is set for next week, on May 26, 2022.

Organised at Shram Shakti Bhawan, New Delhi, this was the second round of discussion held by the Labour Ministry with Infosys on the IT firm’s non-compete agreement, which bans ex-employees from working for the same customers in rival companies.

The discussion, which was earlier to be held on May 16, was postponed for a day on account of a public holiday due to Buddha Purnima.

The development took place on the backdrop of a complaint filed by  NITES with the Labour Ministry against Infosys, seeking removal of the non-compete clause, which bans employees from working for the same customer in firms such as TCS, Accenture, IBM, Cognizant, and Wipro.

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

Apart from Labour Ministry officials, complainant IT Union NITES was also present in the meeting.

Before today's meeting, the Labour Ministry had issued another notice to Infosys to hold a joint discussion on April 28, which the IT major also did not attend.

Harpreet Saluja, President of NITES, who was a part of this discussion, said that Infosys was absent from the hearing even after the ministry gave them the option to join the meeting virtually.

Earlier, as a response to the complaint, the IT major said that the ‘non-compete’ clause in the offer letters of employees would not refrain them from joining other companies or limit career growth. In the statement released on April 18, the company said, “It is a standard business practice in many parts of the world for employment contracts.”

Also Read: Non-compete clause standard, won’t limit career growth: Infosys

In addition, the company also indicated that the clauses are fully disclosed and are added to protect the confidentiality of information.

However, an executive of a mid-tier IT firm, who did not want to be identified, said that while non-compete clauses are standard, enforcing them and taking the litigation route does not make sense. “We are engineers – not lawyers – who want to focus on building products,” the executive said.

Also Read: Non-compete clauses in IT firms: Much ado about nothing?

The grievance letter filed by the IT employee union was based on multiple complaints from Infosys employees. NITES’ Saluja had earlier said the company is now enforcing the clause because of the high attrition rate.

Infosys, like other IT majors, is facing increased attrition at the back of increased demand. Infosys reported 27.7 percent attrition for the quarter ended March 31, 2022.

Saluja added that the company is threatening employees with legal repercussions if they breach this agreement.

Infosys did not comment on the issue.