Infosys Skips Hearing By Labour Ministry Over Non-Compete Clause, IT Employees Union Demands Proper Offer Letter Mechanism

Sumit Singh

Pune/Bengaluru, 28th April 2022: Today IT giant Infosys remained absent from a meeting called by the Union Labour Ministry to discuss non-compete clauses for employees. Now the next date of hearing is 16th May 2022.

Meanwhile, Nascent Information Technology Employees Senate (NITES), which has complained on the issue, has demanded proper mechanism regarding offer letters to prevent exploitation of IT employees.

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NITES president Harpreet Saluja told PunekarNews.in, “In pursuance to our complaint against Infosys regarding illegal non compete agreement I attended the meeting and represented the employees. We have apprised the Labour Ministry that the non compete agreement being enforced by Infosys is illegal as per Section 27 of Indian Contract Act, 1872 which states that every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

The courts in India have already held that the right to livelihood of the employee must prevail over the interests of the employer, despite the existing agreement between the employer and employee. A negative covenant in the employment contract, prohibiting carrying on a competing business beyond the tenure of the contract, is void and unenforceable. Article 21 of the Indian Constitution includes the right to life and right to livelihood. Also Article 39(a) suggests that citizens (men and women) shall have the right to an adequate means of livelihood.

The employee’s covenants should be carefully scrutinized because there is inequality of bargaining power between the employer & employee, indeed no bargaining power may occur because the employee is presented with a standard form of employment contract to accept or reject.

There should be a legitimate mechanism from the Labour Ministry to have a check on offer letters being time and again modified by the IT Sector companies as per their will, to mitigate exploitation of IT employees. The restraint being put on employees is greater than necessary to protect the employer, is unduly harsh and oppressive to the employee. Hence NITES has strongly demanded that the illegal non compete agreement should be removed from the offer letters of employees.”

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