India's Technology Sector In Bangalore - Exemption From Labour Law On Standing Orders

Author:Mr Srinivas Raman, S. Preetha and Vikram Shroff
Profession:Nishith Desai Associates
 
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The Karnataka State Government has renewed the Standing Orders Act exemption for IT and ITeS companies (along with certain other knowledge based sectors) for five years. The technology sector in Bangalore was exempted from this law since 1999. The previous exemption had expired on January 25, 2019. As a result of the new notification, IT and ITeS companies in the State of Karnataka (Bangalore) will not be required to comply with the Standing Orders Act until May 2024, provided that certain conditions are complied with by the employer. The HR Law team at Nishith Desai Associates supported NASSCOM from a legal perspective in its efforts in securing the Standing Orders Act exemption from the State Government of Karnataka.

Bangalore, India's technology capital once again stands exempted from the Industrial Employment (Standing Orders) Act, 1946 ("Standing Orders Act") - a labour law which requires employers to define and publish uniform conditions of employment in the form of 'standing orders'.

The exemption has been granted for five years as per the notification issued by the State Government of Karnataka on May 25, 2019 ("Notification"). The Notification reinforces the Karnataka State Government's objective to support and promote the growth of technology and related sectors in the State, which is likely to lead to continuing investments in the State.

Background

The Standing Orders Act is a pre-independence enactment, a 1946 law, which was originally drafted and intended to apply to industrial establishments such as factories, mines, plantations etc.in order to define the conditions of employment applicable to workmen in these sectors with sufficient precision and to make the said conditions known to them.

The Standing Orders Act requires employers to draft and publish Standing Orders in accordance with the format prescribed in the statute, have it approved by employee representatives and get it certified by the labour department. The Standing Orders contain terms and conditions of employment including hours of work, wage rates, shift working, attendance and late coming, leaves and holidays, termination of employment and suspension/dismissal of workmen for misconduct, etc. Until such time that a covered establishment gets its Standing Orders certified, the Model Standing Orders prescribed under the Standing Orders Act containing several of the above-mentioned provisions would automatically become applicable to such establishment.

The State...

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