A Sigh of Relief from Standing Orders!

Existing Framework: The Industrial Employment (Standing Orders) Act, 1946 (the “Standing Orders Act”) is a labour legislation which regulates uniform conditions of employment in the form of ‘standing orders’. In Karnataka, till the recent past, only the IT sector was exempted from implementing these standing orders.

Legal Update: The Government of Karnataka, vide Notification dated May 25, 2019 (the “Notification”), has also exempted certain knowledge based industries under Section 14 of the Standing Orders Act, for a period of five years.

The Notification exempts the following:

IT
ITeS
Startups
Animation
Gaming
Computer Graphics
Telecom
Business Process Outsourcing (BPO)
Knowledge Process Outsourcing (KPO)
Other knowledge based industries.

This exemption is subject to certain conditions such as:

Constitution of an Internal Committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereof;
Formation of a Grievance Redressal Committee (GRC) to address the grievances faced by employees;
Intimation of information to the Jurisdictional Deputy Labour Commissioner and Commissioner of Labour in Karnataka, on cases of disciplinary actions such as suspension, discharge, termination, demotion, dismissal etc.; and
Prompt and complete disclosure of information regarding service conditions of employees, as and when sought by the Labour Department, within a reasonable time period.

Key Inference: While some are of the view that this decision is completely unilateral, arbitrary and anti labour welfare in nature, others feel that it is a relief for the said establishments as they are no longer subject to an unnecessary burden. However, due to it’s around the clock operating model, and provision of both onsite and offsite services to clients, these establishments have a very different model from the one the standing orders seek to regulate.

May 26th, 2019