Expressing grave concern over the working conditions and lack of social security for employees in the software industry, the Telangana High Court has urged the legislature to consider enacting appropriate laws to protect their welfare, health, and social security.
Justice Nagesh Bheemapaka observed that critical questions remain unanswered, including whether software employees are entitled to statutory social security benefits, healthcare protection, regulated working hours, and minimum safeguards against arbitrary termination. The court stressed the urgent need to assess the responsibilities of the software industry, one of India’s most advanced and globally acclaimed sectors, towards its workforce.
The observations were made while allowing a writ petition filed by a software professional against Algonox Technologies Pvt Ltd, wherein the employee alleged harassment and coercion. The petitioner was compelled to pay `5.90 lakh to secure his release from employment under a prolonged service bond. While granting relief in the individual case, the court also undertook a broader examination of employment practices prevalent in the software sector.
Criticising the Labour department, the high court held that its handling of the complaint was unsatisfactory and directed authorities to specifically determine whether the enforced “liquidated damages” amounted to an unconscionable bargain.
The petitioner, who joined the company in 2019, alleged that he was made to execute a 52-month surety bond in phases. Despite attempting to resign due to a hostile work environment and extended 12-15 hour workdays, the employer allegedly invoked the bond to prevent his exit, offering only marginal salary increases. When he resigned in August 2023, the company allegedly refused to relieve him unless he paid the bond amount, which he ultimately did.
Citing Supreme Court precedents, Justice Bheemapaka noted that while employment bonds and penalty clauses are generally enforceable, they become void if they are unreasonable, coercive, or contrary to public policy. The repeated renewal of bonds, effectively binding employees indefinitely, was held to be harsh and unconscionable.
Highlighting the occupational hazards faced by software professionals, the court observed that long night shifts driven by offshore outsourcing adversely affect physical and mental health. Referring to a study by AIG Hospitals, the judge pointed out that many employees face chronic stress, lifestyle disorders, and severe job insecurity, despite the perception of high remuneration.