Please correct me if I am wrong, what is Industrial Act? When was the Act enacted? For me two basic Acts are Factories Act, 1948 (Central Act) and Shops and Establishments Act (of respective state govt.) although there are Mines Act, Plantations Labour Acts etc particularly for the concerned industry.
Industry has a wider meaning to cover all activities which are not otherwise covered by Shops and Establishments Act. Under Industrial Disputes Act, 1947, industry means any systematic activity resulting in the production or distribution of goods and services. Even the capital investment and profit motive are irrelevant in deciding whether an activity shall be considered as industry or not.
IT/Software companies are also engaged in an activity of production and distribution of goods/ services. As such there is no ground to say that IT companies do not come under Industrial Disputes Act.
In fact, if a thorough interpretation of term 'factory' in the Factories Act is done, IT companies shall also come under the Factories Act. But since the definition is narrow and many provisions made in the Act are relevant only to manufacturing units, IT companies came under 'other establishments'.
Like Factories Act, Shops and Establishments Act also does not provide any thing for settlement of disputes. All these Acts, such as Factories Act, Shops and Establishments Act, Plantations Labour Act or Mines Act, are meant for providing for health, welfare and security of employees employed therein. These Acts speak about hours of work, overtime, weekly off, welfare steps to be taken by the employer, measures to ensure safety and security of employees etc. In case of disputes, whether in any manufacturing or factory unit or shop or establishment, the same is redressed by authorities under the Industrial Disputes Act. Since in IT companies also employee - employer relationship is present there is no meaning in saying that the IT sector is free from coverage of ID Act. If it is so where should the employees seek justice?
I think the amendment to the Factories Act permitting women employees to work during night shift was made with a view to benefiting the IT sector. Similarly a verdict in the closure issue of Cholamandalam Software Company which did not intimate the appropriate government of its intention to close down the company was in favour of the employees. Right now I don't have supporting details but I shall post it soon.
The above views substantiate that IT company will also come under the coverage of Industrial Disputes Act.
30th October 2008 From India, Kannur