The labor ministry has issued a notice to Infosys to hold a joint discussion on a non-compete clause in the IT services provider’s job offers.
A clause in the letter restricts employees from joining ‘named competitors’ or any of Infosys’ clients directly for six months after leaving their jobs.
The ministry will hold a joint discussion before the Chief Labour Commissioner in New Delhi on April 28
Infosys’ group heads for human resources, Krish Shankar, and Harpreet Singh Saluja, the president of Pune-based labor union Nascent Information Technology Employees Senate, which had filed the complaint, have received the communication from the ministry.
The Labour Ministry will hold a second round of discussion with Infosys on its non-compete agreement, which bans ex-employees from working for the same customers in rival firms, on May 16.
The company was absent from the first round of discussion that was scheduled on April 28.
Harpreet Saluja, President, Nascent Information Technology Employees Senate (NITES), which was a part of this discussion on the agreement with the ministry, said that Infosys was absent from the hearing even after the ministry gave them the option to join the meeting virtually.
“The next round of discussion will happen on May 16 in New Delhi,” he added. Apart from the representatives from the ministry and Infosys, NITES will be present in the meeting as well.
Non-compete agreement
As per the clause, employees who have quit the firm are banned from working with the clients, with who they were associated for 12 months before they quit. They are also not allowed to work for the same customers as their “named” competitors. This includes TCS, Wipro, Accenture, IBM, and Cognizant.
Infosys had 314,015 employees globally at the end of March.
It is not only Infosys that has non-compete clauses in its offer letters. Recruitment experts said these are standard agreements that employees are asked to sign before they join.
The only reason it is making news now is that it is being enforced, which was not the case earlier with attrition on the rise, said Supaul Chanda, vice president at Experis India, a part of staffing firm Manpower Group.
Infosys on its non-compete clause
The IT services provider, calling it a “standard business practice”, said that in many parts of the world employment contracts include controls of reasonable scope and duration to protect the confidentiality of information, customer connection, and other legitimate business interests.
The conditions are fully disclosed to all job aspirants before they decide to join Infosys, and do not prevent employees from joining other organizations, according to the company’s statement shared with Economic Times a few days back.
Meanwhile, Infosys’ attrition rate hit 27.7 percent for the quarter ended March 31.