Infosys replies to Centre on non-compete clause

The matter has been further transferred to the state labour department of Haryana


The Ministry of Labour and Employment had called Infosys for a joint meeting on three occasions, but no representative of the company appeared for the same. However, now, Infosys has replied to the Centre on the matter of non-compete clause for which it has been grabbing headlines. In a letter dated 24 May, Santosh Nair, AVP, HRD, Infosys, has replied to the summons of the Centre in written. HRKatha has access to a copy of the same.

In the letter, Nair states that the non-compete clause is meant for maintaining confidentiality of their clients. “As you may know, as part of the lT industry, our employees, who are core to our business and reputation, handle critical and sensitive customer projects as a part of their regular services. The purpose of the clause under discussion is to ensure business and client confidentiality,” writes Nair in the letter.

The letter further states that the non-compete clause is a common practice amongst the IT industry and the employees agree to the terms and conditions of the agreement before they join the Company. “Moreover, the obligation is applicable for a very limited period only. Further, the clause under discussion is fairly common and standard business practice in employment contracts in the lT services sector in lndia. Candidates voluntarily agree to be bound by the obligations specified in the clause prior to joining the company, recognising the relevance and importance of such a clause,” Nair expresses in the letter.

The Chief Labour Commissioner tried to intervene in the matter when Nascent Information Technology Employees Senate (NITES) filed a grievance against Infosys on inclusion of the non-compete clause in the employment contract. The Centre had called for a joint meeting sending notices to Infosys for 28 April, 17 May and 26 May, but Infosys remained absent on all three occasions.

Now the matter has been transferred to the state labour department of Haryana by the Centre. “Further, as the appropriate government under the extant Labour Laws in the matter is the state government, the matter is therefore being forwarded for further necessary action,” writes Remis Tiru, chief labour commissioner, in his letter.

In April, NITES and its president, Harpreet Saluja, took a stand against the non-compete clause at Infosys and filed a grievance against the same to the Ministry of Labour and Employment. The claim by NITES is that the clause is unlawful and restricts employees from joining any other company if they wish to and violates the fundamental right of a human being.

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