Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Labour Ministry sends notice to Infosys on no-compete clause
BackBack

Labour Ministry sends notice to Infosys on no-compete clause

The aforesaid clause has been alleged to be unethical and illegal by the complainant. It has been decided to hold a joint discussion on the issue before the chief labour commissioner (central) on 28 April, the notice said

Infosys hired 85,000 freshers last fiscal, and plans to hire about 50,000 college graduates in FY23.Premium
Infosys hired 85,000 freshers last fiscal, and plans to hire about 50,000 college graduates in FY23.

The Ministry of Labour & Employment has issued a notice to Infosys to hold a “joint discussion" on the enforcement of the non-compete clause which prevents an employee from joining a rival tech firm within six months of exiting Infosys. 

“This is with reference to the complaint number ....from the President, Nascent Information Technology Employees Senate (NITES), against the management of Infosys limited in respect of non-compete agreement clause, whereby the employees terminated from employment from Infosys for any reason have been restricted in respect of their future employment," said the notice sent to Krish Shankar, group head- human resources at Infosys. 

Mint has seen a copy of the notice dated April 22. 

“The aforesaid clause has been alleged to be unethical and illegal by the complainant. It has been decided to hold a joint discussion on the issue before the Chief Labour Commissioner (Central) Ministry of Labour & Employment, Govt of India at 3pm on 28.04.2022...", the notice added. 

NITES‘ president Harpreet Singh Saluja was marked on it.

These comments come on the back of the Pune based labour union’s appeal to the central labour ministry seeking removal of Infosys‘ non-compete clause. According to senior executives in Infosys and the IT industry, these non-compete clauses are a standard procedure where a list of competing firms are named, joining whom may lead to breach of client confidentiality.

An HR head of a rival tech company said that when recruiting , tech firms take into account that the candidate hired does not have the same client and share similar projects and geographies like his previous employer.

As per Section 27 of the Indian Contract Act, 1872, any agreement which restrains anyone from practicing a lawful profession or trade is not enforceable in a court of law. 

These clauses come into focus at a time when the Bengaluru based tech firm is facing record attrition. On a last-twelve months (TTM) basis, Infosys’s attrition rate increased to 27.7% in Q4 from 15.2% a year ago and 25.5% in the October-December quarter.

According to specialist staffing company-Xpheno’s data shared exclusively with Mint, most people who left Infosys in FY22 joined Accenture followed by Cognizant, TCS and Deloitte.

The IT sector is plagued by high attrition and the swift churn rate is adding to the pressure on their margins. Infosys hired 85,000 freshers last fiscal, and plans to hire about 50,000 college graduates in FY23.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Devina Sengupta
Devina tracks and writes on workplaces, human resources and education for Mint. She also occaisionally writes an opinion column. She hosts a podcast on interesting HR trends in corporate India called The Working Life.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 27 Apr 2022, 08:27 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App