Top 5 Myths about Labour Laws in India for IT Employees

After mass layoffs, furlough, and other unethical unemployment practices in the Indian corporate industry, myths about Labour Laws in India are overflowing. This story is to bust some of the most common myths about Labour Laws in India for IT Employees.

Labour law or employment law defines workers, union members, and employers’ rights and obligations in the workplace.

Here are the top five myths about labour laws and the truth behind each one.

Myth number 1:Labour Laws do not apply to Software and IT companies.

The Truth: Labour Laws are applicable for Software and IT companies as well.

It is one of the most popular myths and misconception among IT employees that Labor laws do not apply to IT companies and IT employees. The majority of the labour laws that apply to any other industry are also applicable to the IT Industry.

Below are some of the fundamental Labour Laws that apply to The Indian Information Technology Industry:

  • The Indian Employment Standard Orders Act, 1946: The Indian Employment Standard Orders Act, 1946 was established by the British Government to provide equal opportunities and no discrimination to workers and deal with the continuous fights between the Indian workers/labourers and the industrialists. The act applies to all industries, including the IT Industry; however, Section 14 of the Act gives the state government the power to eliminate or exempt a type of industry from the act.
  • The Payment of Wages Act – 1936: This act deals with the violation of labour rights regarding wages. Applies to the IT industry to ensure no discrimination regarding salaries based on caste, colour, sex, gender, etc.
  • The Minimum Wages Act – 1948 and The Payment of Gratuity Act 1972: These two acts aim to set a minimum amount of payment for workers and govern the Gratuity.
  • The Maternity Benefit Act, 1961: Act deals with Maternity benefits to ensure mothers’ well-being, including wage, leave of absence, and protection from any layoff/discrimination during maternity leave.

Myth number 2: IT Employees can not form or join the Trade unions

The Truth: IT Employees can form and join the Trade unions 

Even though the Trade union law is given and governed by the Trade Unions Act, 1926, the Indian Constitution also prescribed the fundamental right in section 19(1)(c). Therefore the right to form a union is a fundamental right that even the state government cannot take away from the citizens.

As a matter of fact, India has got many IT Trade unions in the last five years working towards IT employees’ well awareness.

Myth number 3: Labour laws protect layoffs, and IT Company Layoffs are punishable under the Industrial Disputes Act, 1947

The Truth: IT employees can file a complaint in Labor court against any corrupt practices by Information Technology Company. However, not every case is treated the same in the Industrial Disputes Act, 1947, and most of the time, IT companies are exempt from the Industrial Disputes Act 1947, also knows as the ID act.

It is happening because ID act 1947 Section 25-Q described Layoff or Retrenchment without prior permission from Govt. as an offense. However, Industrial Disputes Act, 1947 (Act) defines workman as employees who perform manual, unskilled, skilled, technical work but excludes those who are (a) employed in a managerial or an administrative capacity; and (b) used in capacity if their wages exceed Rs 10,000 per month

These laws were written way before the IT Industry evolution, and we have not heard in a while of an IT employee earning less than Rs 10,000 per month. The majority of the time, large corporations/IT companies’ legal teams twist the case by using these loopholes in customary laws and escape after unscrupulous layoffs. 

Myth number 4: IT Employees can not take legal actions against an IT company

The Truth: Though many of the labour laws are not applicable or currently exempt for IT Industry, Employees can take legal actions against the IT company in case of any corrupt practice.

Historically, multiple cases favored employees; therefore, Indian IT Blog strongly encouraged them to seek legal help or contact the IT Trade union in case of any current practices from the employer.

Myth number 5: State government plays no role in Labour Laws for IT company

The Truth: State government plays a crucial role in Labour laws, specially exemptions for IT Industry.

The Shops and Establishment Act is state legislation, and each state has framed its Act and Rules for the act. Since each state can modify or amend this, many states such as Karnataka have exempted IT Industry. This act lays down the rules for working hours per day and week; however, IT companies are exempt due to the work’s nature.

Question: Where can I download the industrial disputes act 1947 pdf format?

Answer: You can download the original version of the industrial disputes act 1947 pdf or visit the Ministery of Labour website.

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