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Setback for IT industry as hub Bengaluru gets first trade union after Karnataka government goes back on stand

At a time when the information technology (IT) sector is hiring fewer people, companies in Bengaluru will have to deal with a recognised trade union.

At a time when the information technology (IT) sector is hiring fewer people, companies in Bengaluru will have to deal with a recognised trade union. (Image: IE)

At a time when the information technology (IT) sector is hiring fewer people, companies in Bengaluru will have to deal with a recognised trade union. The Karnataka state IT/ITeS Employees Union (KITU) has received its registration from the State Labour Commission under the Trade Union Act, 1926, and the Karnataka Trade Unions Regulations, 1958. The state government had earlier indicated it was not in favour of trade unionism in the sector. Karnataka goes to the polls in 2018; the state is currently ruled by the Congress which came to power in mid-2013.  In 2014, the state government under Section 14 of the Industrial Employment (Standing Order) Act, 1946, had exempted the IT industry on certain requirements like formation of a union for a period of five years.  TV Mohandas Pai, former board member and HR head of Infosys, told FE the Karnataka government has broken its promise. “It had said union activities will not be allowed in the IT sector. Now Bengaluru’s image will be hurt and Karnataka will be affected as existing companies will think twice before expanding,” Pai said.

Earlier he had tweeted: “Big menace to jobs: sad for Karnataka.” While IT services players are clearly not happy with the presence of a union, they do not see too many employees becoming its members. “Not many employees are likely to join the union voluntarily,” a senior IT executive said.  Karnataka IT minister Priyank Kharge told FE that while currently the standing order does not allow union activity within the legal framework, it did not mean the government was not interested in protecting employee rights. “Many associations are in touch with the government and I have also asked them to come back to me on the charter of demands and what they expect from us,” Kharge said. The minister said the labour commission can give permission to form a union but there is an Act which has to be amended so that these unions can work. “The labour commission may have recognised that there is a problem and may have accepted the forum,” he added.

The pace of employee addition by the Indian IT industry has dropped to below 5% from double-digit growth a few years ago. Firms like Infosys and Cognizant have seen their headcount reduce since April while Wipro saw its employee headcount drop at the end of the September quarter. In 2016-17, the industry had taken on 170,000 people, taking the tally of employees to 3.8 million in March 2017. The National Association of Software and Services Companies has forecast that the sector will create about 20-38% fewer jobs in the current fiscal. The union has been formed to address the concerns of employees, specifically layoffs and employee harassment. KITU general secretary Vineeth Vakil said the union was registered as a general IT industry union body with 250 members.

Trade unions in the IT industry have been traditionally stymied in Karnataka due to a standing order of the state government.  Zahir Pasha, assistant labour commissioner, told FE that the union is formed to negotiate the legitimate demands of the employees. “It is a democratic right of any employee,” he said.

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