Infosys Fails To Attend Meeting For Non-Compete Clause As Directed By Labour Ministry

As we had shared earlier, Labour Ministry had asked Infosys to attend a meeting with NITES for discussing the future of non-compete clause.

But unfortunately, Infosys failed to attend this critical meeting.

What’s happening here?

Infosys Couldn’t Turn Up For This Critical Meeting

The meeting between Infosys and prominent IT employee union: NITES was scheduled for April 28th, 2022, as directed by the Labour Ministry.

But only NITES was present for the meeting, as Infosys didn’t turn up.

Reacting on this development, Harpreet Saluja, President , Nascent Information Technology Employees Senate NITES said, “In pursuance to our complaint against Infosys regarding illegal non compete agreement NITES President Harpreet Singh Saluja attended & represented the employees. We have apprised 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 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.

Infosys remained absent from the hearing. Next hearing date given is 16th May 2022. “

As per the available information, the next date for this meeting is May 16th, 2022.

Why Infosys Was Asked To Meet NITES?

The issue erupted after some ex-Infosys employees complained about the non-compete clause imposed by Infosys, wherein the resigned employees are banned from working with their top 5 competitors, in case they have the same clients. 

This non-compete clause is applicable for 6-months.

Based on these complaints, NITES shot a letter to the Labour Ministry, asking them to intervene, since imposing this non-compete clause is illegal, as per the Labour Laws.

Infosys justified this non-compete clause, stating that almost every IT company does have a non-compete clause, to protect the interests of their clients. Besides, due to heavy attrition, most of the IT firms are deploying strategies to stop the employees from resigning. 

Based on the letter sent to the Labour Ministry, Infosys and NITES were asked to hold a joint meeting on April 28th, which Infosys failed to attend.

Ever since the Labour Ministry letter was sent, there has been a state of silence from Infosys’ end.

We will keep you updated, as more details come in