NEW DELHI: An IT employees’ union has filed a complaint with the labour ministry against Infosys seeking removal of the non-compete clause from offer letter, which bans employees from working for the same customer in rival firms such as TCS, Accenture, IBM, Cognizant, and Wipro for six months after termination of employment.
The pune-based Nascent Information Technology Employees Senate (NITES) claims to have received 65-70 complaints from employees of the company in the past one week. The company’s contract stated that for six months following the termination of employment, the employee won’t accept job offer from any customer with whom they had worked in a professional capacity.
They are also barred to take any offer from any named competitor of Infosys if it would involve them having to work with a customer, with whom they had worked in the 12 month preceding the termination of employment. The ‘Named Competitor’, according to the company contract, includes TCS, Accenture, IBM, Cognizant and Wipro.
“The restriction contained in the employment letter, which is mentioned above is clearly in restraint of trade and, therefore, illegal under section 27 of the Contract Act,” Harpreet Saluja, President of NITES, said in the complaint addressed to the Minister of State for Labour & Employment Bhupender Yadav. Sources in the industry said while the clause has been there for quite some time, it wasn’t enforced and is now being enforced as talent war has gripped the industry owing to soaring attrition rates.
Infosys’ voluntary attrition rate for the past 12 months stood at 27.7% at the end of March 31, 2022. It was 25.5% in the December quarter, and 10.9% for the quarter ended March 31, 2021. An Infosys statement said it is a ‘standard business practice’ in many parts of the world for employment contracts to include controls of reasonable scope and duration to protect confidentiality of information, customer connection and other legitimate business interests.